Posted by Brian Hill on May 20, 2011
Symantec announced today that it plans to acquire privately-held Clearwell Systems. The $390 million deal significantly strengthens Symantec’s eDiscovery portfolio. With annual sales of $56 million and more than 400 enterprise and law firm customers, Clearwell has traditionally focused on processing, search, and review to support eDiscovery and has more recently offered collection and preservation capabilities. Symantec and Clearwell have a long-standing partnership with several joint customers across their archiving and eDiscovery offerings.
My preliminary perspective is that this acquisition will ultimately be a positive move for current and prospective enterprise customers. The three main reasons:
- The intersection of archiving and eDiscovery is critical. Beyond IT and compliance objectives, easing eDiscovery burdens is a top driver for message archiving adoption. In addition to aiming to cut surging messaging volumes, enabling faster and more cost-effective response to litigation and investigations, message archiving decision-makers seek better integration with eDiscovery applications. In our Q1 2011 Global Message Archiving Online Survey, we found that 82% of survey respondents perceive that provider support for collection, review, and other steps in the eDiscovery process is an important buying consideration. Clearwell's eDiscovery offerings augment Symantec’s Enterprise Vault eDiscovery capabilities.
- Vendor viability and long-term application support matter. As the eDiscovery market matures, we’re seeing steady vendor consolidation. Overall, given the fragmented provider landscape, this is a positive development for enterprise buyers. Forrester estimates that there are more than 600 vendors that address different components of the broader eDiscovery market. Against this backdrop, navigating vendor offerings isn't trivial, and it's important to understand the actual eDiscovery functionality that vendors provide and what resources they have. Enterprises report challenges with shifting across different applications provided by different eDiscovery providers and voice concerns about the long-term prospects of some of their providers. Given how long litigation and investigations often take, buyers want to make sure that their provider will be there when it counts. With about 200 employees, Clearwell is bigger than many of its counterparts, but Symantec will clearly be around for the long haul.
- It’s not just about the technology – vendor eDiscovery talent is key. eDiscovery cuts across a range of functional roles within enterprises. IT and legal roles, however, typically are the dominant stakeholders for most organizations. Symantec has deep IT expertise. While compliance and legal risk mitigation have been a big part of its success with Enterprise Vault, Symantec simply doesn’t have comparable bench strength from a legal perspective. With the acquisition of Clearwell, Symantec gains considerable legal talent that will not only help win sales but, with a successful transition, will be able to influence Symantec product and service strategy with an appropriate IT and legal balance.
As with other technology vendor mergers and acquisitions, I’m sure we’ll see a few bumps in the integration process. For example, today Symantec sells natively-developed and partner-provided offerings for legal hold, collection, and other eDiscovery applications. Clearwell offerings have some overlap so I anticipate a period of assessment and rationalization. The two vendors, however, have joint partners and some existing product integration and Symantec certainly recognizes the importance of the intersection of archiving and eDiscovery. Close proximity may also help with the integration. (Symantec and Clearwell offices are only a few blocks from each other in Mountain View, Calif.) A successful integration is by no means assured, but signs so far are encouraging. I’ll be tracking the progress of the integration and will be interested to see how the Symantec roadmap shapes up and to see what level of support that Symantec and Clearwell customers receive during this transition phase.