A Chicago-based e-discovery company just acquired a text analytics company — a move that potentially sets the stage for market dominance.

The deal involves kCura, the maker of Relativity, and Reston, Va.-based Content Analyst Company (CAC), developer of the CAAT analytics engine.

CAAT, which provides insights about unstructured data, is widely used to power the most highly regarded e-discovery products. A machine learning system that uses semantic indexing, it provides several text analytics capabilities using both supervised and unsupervised learning methods including concept search, categorization and conceptual clustering.

KCura has been using it as part of its Relativity platform the past eight years. But now, according to a company statement, it will have the ability to pull the two technologies and their teams together with a single roadmap. The deal will  “meet the evolving needs of their customers and the entire e-discovery industry," the statement noted.

Market Play

Forrester Principal analyst Cheryl McKinnon said the deal is about market dominance, noting that there is global momentum around technology-assisted review (TAR) in e-discovery. It's likely to grow even more following a landmark case in the UK last month, Pyrrho Investments Limited versus MWB Property Limited.

The case gave a green light to predictive coding software in the UK, citing its acceptance in the US and other jurisdictions. That's likely to spur more interest and higher adoption of analytics for e-discovery, she said. And other investigative use cases will only likely grow.

“I fully expect the case to drive interest, demand and increasing acceptance of analytics to automate the review process when large amounts of electronic evidence needs to be sifted through,” she told CMSWire. TAR has generated "dramatic cost savings" in the US for several years, and the UK market is now an emerging opportunity for review platform vendors like kCura.

She also believes that where one legal firm goes, more will follow. The Pyrrho case will trigger other legal firms to take the plunge, she said.

“The legal profession is a tight knit group, and historically have been fast followers for tool adoption — no one likes to be first but once the courts give a green light, interest will spike,” she said.

E-Discovery Muscle

Already, kCura is an industry behemoth. Since Legaltech in February, several smaller vendors have taken aim to displace it, she said. She added that some of these companies explicitly told her they view kCura as the leader to be disrupted..

“The competition is heating up. New cloud-native providers are putting cost pressures on the market by offering clients simpler subscription or project based pricing,” she said. They are also using the scalability and computing power of cloud behind the scenes with amazing compute power available to anyone now, and not just those big enterprises with the internal data center computing muscle to run these sophisticated analytics on large volumes of content,” she said.

The final point worth noting here in terms of market dominance is that the CAAT analytics engine has a large Original Equipment Manufacturer (OEM) reach across the e-discovery market.

An OEM is a company that makes a part or subsystem that is used in another company's end product.

“This gives kCura the power to determine not only its own destiny in respect of its analytics roadmap, but may also end up disrupting some of its key competitors' plans.”

Financial terms of the acquisition were not disclosed.