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Symantec buys Clearwell tech that makes lawyers poorer

eDiscovery: Will probably turn out to be illegal

Internet Security Threat Report 2014

Days after Iron Mountain sells its way out of the eDIscovery market Symantec is buying its way in, with a $390 million purchase of Clearwell.

Symantec, which sells backup, archiving, security, file and volume management software and is in a hardware-selling joint venture with Huawei, thinks the addition of eDIscovery products will complement its existing backup and archiving products, such as Enterprise Vault archiver, enabling it to sell a broader set of capabilities to customers.

Enterprise Vault provides, Symantec says: "E-Discovery and Search roles-based access for legal users to search, preserve, review and export electronically-stored information efficiently." The idea is that when companies are engaged in legal disputes, lawyers for the opposing parties are entitled to discover relevant documents in the company's files and put a legal hold on them, preserving their state. The lawyers can then make detailed inspections of these documents for relevance to the case and, ultimately, use their contents as part of the legal process.

Electronic discovery (eDiscovery) is technology to enable to a digital document store, holding things like emails, word processing documents and spreadsheets, to be searched on settable parameters with qualifying documents sequestered in a separate logical place. There they are held in an unalterable state - legal hold - ready for detailed inspection. The costs of eDiscovery are said to be markedly lower than paying for lawyers to trawl through a document store, and eDiscovery is also said to be a lot quicker, again saving on lawyers' per-hour billing fees.

Privately-held Clearwell was founded in 2004 and has received $33 million venture capital funding. An IPO was mooted in 2007 but never came to pass. The acquisition price represents a nice, if somewhat delayed, crystallisation for its backers. Its eDiscovery platform, "provides a single, integrated product for identification, preservation, collection, processing, analysis, review, and production." Users include Aegon UK, Johnson & Johnson, Learjet, Microsoft, NBC Universal, Time Warner and Toyota; a blue chip bunch. It's a more highly-regarded product than the eDiscovery part of Enterprise Vault, and there is, in fact, an existing integration of it with Enterprise Vault.

Enterprise Vault produces the content archive repository and Clearwell becomes Symantec's preferred eDiscovery engine to process that archive.

Deepak Mohan, Symantec's Information Management Group SVP, reflected this in his canned quote: "The acquisition of Clearwell's market-leading electronic discovery solution will further increase Symantec's ability to get the right information, to the right people, at the right time, while reducing overall legal review costs and limiting risk." When the acquisition is completed Clearwell will become part of Mohan's product set.

Symantec quotes Gartner, saying that eDiscovery is growing at a compounded annual growth rate of 14 per cent and is estimated to reach $1.7 billion by 2014. That wasn't good enough for Iron Mountain to capitalise on but it's set Symantec's juices flowing, not least because of perceived cross-selling and product integration synergies across other Symantec products in the backup, data loss prevention and data insight areas.

Clearwell CEO and president Aaref Hilaly talked of delivering "a seamless, integrated information governance workflow" through the acquisition. One difficulty with eDiscovery selling is that it is not a purchase that increases a company's agility, business competitiveness or any other positive, wealth-generating aspect of business life; instead it's a purely defensive, cost-reduction measure in the face of lawsuits, like a medicine to fight disease; necessary but not business life (wealth) enhancing.

The Symantec release again uses Gartner to make this point: "According to Gartner, through 2012, companies without an information governance strategy and technology for content archiving solutions, will spend a third more on eDiscovery than those with content archiving solutions." It's a spend-less product, not an earn-more one.

Symantec expects its earnings to increase because of the acquisition in its fiscal 2013, and the purchase is expected to be completed in Symantec's September quarter. The $390 million price is net of $20 million cash held by Clearwell. ®

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