eDiscovery could be next target for ECM vendors

At the end of last year, I tried to predict some trends for this year, and right there at number three was "eDiscovery continues to grow." As it turns out, I think that prediction has held true. It's no secret that this has been a good year for eDiscovery, and that could mean that some of the stand-alone eDiscovery companies have caught the eye of ECM vendors looking to expand their portfolios and get in on some of the action.

As courts demand faster and more comprehensive compliance with requests for electronic records discovery, law firms and companies buried in electronic records have turned to eDiscovery software vendors like Recommind and Kazeon to help. Perhaps that's why I wasn't surprised when I came across this post on BNET, reporting that EMC was rumored to be interested in Kazeon. While the rest of the industry struggles, eDiscovery grows and it makes a lot of sense that the major vendors would start cherry picking the eDiscovery vendors out there.

It's a jungle out there

While the BNET article points out that Kazeon is not the only EMC partner--it also has a relationship with Clearwell and StoredIQ--writer Michael Hickins, believes that Kazeon is a better target because it offers a more complete solution and he could be right. He also suggests it could be a defensive move as much as an offensive one because EMC wants to prevent its rivals from getting Kazeon first.

It could also be because EMC simply sees a huge market opportunity that is only likely to grow. With litigation likely to expand as a result of the banking and financial crisis last Fall and increased regulation probably on the way as a result of legislation in progress (also directly related to that same crisis), it is highly probable that companies will be under even more intense scrutiny and will need the tools that search and eDiscovery products like Kazeon provide.

Who's next?

Beyond Kazeon, I wouldn't be surprised to see Open Text scoop its own eDiscovery partner, Recommind. The two companies have worked together successfully in the past and Open Text has never been shy about purchasing companies to fill its portfolio. Recommind announced this week its Axcelerate™ eDiscovery On-Demand™ SaaS product experienced substantial growth in the third quarter. This comes on the heels of last week's announcement of a new automated content categorizer. Open Text could certainly do worse.

It's easier for larger companies like EMC and Open Text to find an existing vendor, one with which they already have a successful relationship than it is to try and build a product from the ground up. While all of this is just a rumor and speculation at this time, it makes a lot of sense, on a lot of levels and I would not be surprised to see these and other vendors get scooped up in the latest round of ECM "Let's make a deal." By this time next year, it's entirely possible that there may not be many stand-alone eDiscovery vendors left standing. - Ron