Gartner Report: eDiscovery Software Revenue at $1.8b

The eDiscovery marketplace grew in 2014 with total software revenue reaching $1.8 billion worldwide, according to a Gartner report.

It estimated 10.6 percent growth in the enterprise eDiscovery software marketplace in 2014, and a five-year compound annual growth rate of around 12 percent.

The e-discovery scope and need for technology is increasing as organizations consider how to preserve social, Web and other new forms of data, the report said.

“That’s more of a long term growth factor,” said Tom Barnett, special counsel in eDiscovery and data science at Paul Hastings. “It’s not that every case now involves text, IM and social media, but more and more it’s starting to show up and have an impact on the overall growth.”

Barnett said storing data is “cheaper and cheaper” and not cost-prohibitive. He added, “It’s figuring out how to access [data] and manage [data] that’s the real challenge.”

Management costs are non-trivial, Barnett explained, because there are costs associated with records management obligations, regulatory compliance, litigation and regulatory enforcement.

TheGartner reportalso surveys the landscape of all eDiscovery vendors that have at least $20 million in revenue, 50 or more clients, and that meet a number of other criteria including ownership of the intellectual property behind their software. It analyses 20 vendors that meet these conditions, from Microsoft and KCura to Epiq Systems, and uses a matrix to rank them based on their ability to execute, their vision, as well as an analysis of the strengths and weaknesses.

For instance, kCura — which owns and operates Relativity, a collection, legal hold, processing, review, analysis and production platform— was given high marks for its vision and execution. kCura “fosters a large and growing user community,” the report’s authors, Jie Zhang and Garth Landers, noted, pointing to its large base of users among Managed Service Providers who already know how to use it as a key strength.

It criticized Microsoft for lacking the width and depth of pure-play eDiscovery vendors, for not supporting non-Microsoft content and for not giving any clear signs of how it plans to develop and package its eDiscovery features. Still, it notes the company’s “dominating footprint across all company sizes and verticals [means] there is a good supply of expertise on Microsoft’s compliance and e-discovery administration tools.”

A Microsoft spokesperson did not immediately respond to a request for comment.

The other vendors identified include FTI Technology, Recommind, Nuix, ZyLAB, HP, Exterro, Epiq Systems, Kroll Ontrack, AccessData, Symantec, Guidance Software, IBM, Catalyst, LexisNexis, Xerox, Ubic, Driven and CommVault.

The analysts also identified four smaller vendors — Cicayda, Everlaw, Logickull and Zapproved — that did not meet all the criteria for its matrix ranking but are nonetheless important players or upstarts.

The report makes note of a few other trends, such as the idea that many organizations are migrating email and documents into Office 365 and thus reviewing their e-discovery process and technology used for this. It also reported that eDiscovery in the cloud is becoming an appealing option, but the legal guidance and requirements on how to treat cloud data, whether it be social, email or internet of things data is being handled on “an ad hoc basis” because there is no broader framework.