2012 eDiscovery, Info Governance & Data Analytics Forecast from Analyst Firm eDJ Group

24
Jan
2012

Barry Murphy

2012 is a critical year for the eDiscovery market.  Companies have matured and now demand that eDiscovery processes be more predictable, efficient, and less costly. It is not uncommon to see companies connecting eDiscovery with broader information governance (IG) initiatives. Meanwhile, available solutions have evolved. No longer will a simple EDD processing application suffice; companies expect more full-service ECA applications and eDiscovery platforms.

For proof that eDiscovery and IG have hit the mainstream, look at what HP paid to acquire IG vendor Autonomy in Fall 2011: $11 Billion.

There is now a spotlight on the eDiscovery market.  What will show up under that spotlight? eDJ expects the following in 2012:

• Continued growth of The Cloud for Information Governance and eDiscovery, but at a slow burn. There is no stopping the freight train that is the Cloud, but legal, privacy, security, and control issues will force some to apply the breaks a bit. While many applications like a CRM can move quickly to the Cloud without impediment, legal and discovery concerns are enough to force companies to think twice before completely moving information management to the Cloud. In eDJ’s eDiscovery and The Cloud survey earlier this Fall, half of all respondents were either somewhat or very concerned about eDiscovery of information stored in the cloud.  In addition, The Cloud will continue to change cost dynamics of the industry, lowering the costs of data processing as well as proactive information storage, e.g. email archiving.
• Continued evolution from processing applications to ECA to eDiscovery platform. In 2012, more vendors than ever will be able to offer compelling, integrated platforms.  Gone are the days that any organization will buy just a simple processing engine.  Rather, processing applications must evolve to add collection & preservation, analysis, review, and even some level of production in order to provide compelling ECA.



• The emergence of Information Management platforms. Large enterprises face huge challenges dealing with Big Data.  Big Data covers both structured data (e.g. that in ERP systems) and unstructured content (e.g. files stored in SharePoint).  Companies need to leverage all information for strategic advantage while ensuring they know what they have, where it is, how to get it, and how to quickly discern what it means for eDiscovery purposes.  How can the information management platform impact eDiscovery?  Well, in the minds of corporate practitioners, preservation “in-place” would be the panacea for many of their preservation headaches.  An information management platform could potentially deliver such preservation benefits. We already see many large software vendors positioning to be the huge information management platform (e.g. HP/Autonomy, IBM, Microsoft, Oracle, and HP).  IG and eDiscovery capabilities will be critical components of the information management platform.  Currently, there is no vendor capable of delivering a full platform, nor are any companies ready to deploy such a platform across the enterprise.  Rather, 2012 will be the year we begin seeing the vendors jockey for position.
• Social media collection and preservation heats up. The usage of social media tools such as Twitter, FaceBook, and LinkedIn create collection and preservation challenges that are brand new.  Just as companies kind of figured out how to handle email for eDiscovery, these new collaboration mechanisms come into play with diverse native formats and new types of metadata.  This creates an opportunity for solution providers to bring innovative collection and preservation tools to the market.  Watch for most vendors to message social media collection and preservation capabilities, but for best-of-breed vendors like Actiance, NextPage, SocialLogix, SocialWare, and X1 Discovery to have the most advanced, defensible, and cost-effective solutions.  Point solutions are often the most innovative ones because the vendors can concentrate all development efforts on specific types of content.



• Predictive Coding goes mainstream. Many organizations experimented with predictive coding in 2011.  Look for some interesting case studies to emerge that allow the legal community to feel more comfortable with the defensibility and accuracy of predictive coding. Predictive coding will have its biggest impact in the ECA realm, as corporations and law firms use it for first-pass review.  In eDJ’s recent Predictive Coding survey, approximately one-third of respondents reported using Predictive Coding.  What is interesting, however, is that 28% of those not yet using predictive coding plan to begin doing so within the next 12 months.  Thus, by the end of 2012, market penetration for predictive coding should be over 50%.
• More Consolidation in the eDiscovery market. HP made its big move to bring IG into the fold with its 2011 acquisition of Autonomy.  There are other large vendors like EMC and IBM that have eDiscovery products in the portfolio, but others like Microsoft, Oracle, SAP, and even Symantec will need to make further acquisitions to become or stay competitive in the eDiscovery software market.  eDJ does not see an acquisition of the scale of HP/Autonomy occurring in 2012, but does believe there will be several roll-ups of regional service providers to become more competitive with the likes of Kroll Ontrack.  The way for a service provider to achieve scale is through a more national network.  The venture capital community will be heavily involved in these roll-ups.
• Corporations continue to get smarter about eDiscovery. True eDiscovery best practices have been few and far between because of the pace of change and information volume challenges that companies face.  eDJ believes that 2012 will see corporations – if not creating innovative best practices – getting better at managing eDiscovery as a process.  One way companies will do this is by being able to quantify eDiscovery spending.  Metrics will emerge, such as average spend per document; these metrics will feed ECA and intelligent legal decision-making.



• More action on industry certifications. In 2011, eDiscovery certification and education was supposed to be big. That was something of a letdown.  While many professionals take classes and gain certifications, no “industry standard” certification has arisen and there are several options for eDiscovery education.  Professionals are not quite sure where to turn.  There are a lot of interesting opportunities here – in an emerging industry like eDiscovery, it is very helpful to one’s career to have certifications to put on a resume.

For all the evolution the eDiscovery market goes through in 2012, it will continue to be a viable standalone market. eDiscovery will not vanish into the IG ether just yet.  Companies may experiment with applying eDiscovery solutions to other areas – for example, using analytics for more proactive information classification and retention programs – but eDiscovery will continue to demand a focused skill set.  2012 should be a watershed year for eDiscovery.