E-discovery is a relatively new concept that describes the process by which information is recovered from corporate networks, usually to answer the demands of regulators or the law. It is a subject close to the hearts of CEOs everywhere, given the stringent penalties and resulting brand damage that have been applied to companies unable to provide information on demand.

Like several other technology sectors that touch on governance, e-discovery has risen sharply in importance in the post-Enron business world and is quickly becoming a standard defence against the machinations of legal agencies, regulators and other information-hungry forces.

The e-discovery process is also fast becoming very familiar to many organisations. First, an external (or internal) demand for information comes in. It may be a serious matter such as information regarding stock-trading behaviour or something relatively trivial such as employees who have been fired asking for emails or performance evaluation reports relating to them to be disclosed. This demand triggers a chase to track down relevant information within an allotted period. Those who can provide timely information avoid penalties while those who can't incur the risk of punishment and, potentially, bad press too.

Critical software for e-discovery includes: early-case assessment tools that help answer the initial question of whether there is a case to answer by providing a high-level overview of the situation; legal-hold tools that help firms meet their obligation to preserve all relevant information once a probe is instigated; archiving tools that preserve documents and email messages (and even video and audio); records and content management packages that offer searchable archives of information; and tools for creating policy-based approaches to the problem.

How big is the e-discovery issue? "Large and growing fast" would appear to be the short answer. Gartner predicts that the e-discovery software sector will be worth over US$760m this year, up from US$524m in 2007. In its July 2007 report The Emerging E-Discovery Market, Gartner analysts Debra Logan and John Bace wrote: "Changes to the Federal Rules of Civil Procedure, along with the ever-increasing reliance on electronic documentation in business, will have wide-ranging effects on the IT profession and IT vendors in 2007 and 2008. IT will be called on to account for elements of their infrastructure and the location of live and backup data as never before."

Another clue as to how seriously the matter is being taken comes from the rapid consolidation of suppliers in the sector. In December 2007, Seagate agreed to buy e-discovery software platform firm MetaLincs for an undisclosed sum, supplementing earlier deals to acquire online backup firm EVault and data recovery services company Action Front. In October 2007, data protection firm Iron Mountain signed a deal to buy e-discovery software firm Stratify for US$158m. Finally, July 2007 saw the biggest deal so far in the sector at US$375m when UK-based enterprise search giant Autonomy agreed to buy e-discovery firm Zantaz.

New Horizons

As well as the companies already mentioned, several others are attempting to stake a claim in the e-discovery sector. They include HP, which recently augmented storage and archive tools with the acquisition of e-discovery firm Tower Software, and Symantec, based in part on tools acquired with the huge Veritas merger agreement of 2004. But many other companies at least touch on the sector, including EMC and CommVault. Leaning on its dominant position on the business desktop, Microsoft is also muscling in. Early this year the software giant ran a US roadshow specifically aimed at educating customers and prospects on the e-discovery landscape.