Gartner’s e-Discovery Leaders
If that sounds dramatic, then a quick look at how the Leader’s Quadrant has evolved over the past 12 months will confirm this. While we will take a deeper look at the Leaders tomorrow, suffice it to say for now that there are nine Leaders, including four new entrants.
Ifit is difficult to get into any of the Gartner Magic Quadrants (MQ),this is even more difficult again by virtue of the fact that it is one of the oldest and, as a result, most mature of the MQs. The competition, as a result, is very, very stiff.
In all there are 23 companies across the entire Quadrant, many of whom will be familiar to those working in the information management space as e-discovery is becoming an increasingly important element of enterprise data management.
The Leaders are as follows (in alphabetical order): AccessData, Exterro, FTI Technology, Guidance Software, HP-Autonomy, kCura, Kroll Ontrack, Recommind and Symantec.
In other Quadrants the move from one quadrant into the Leaders’ Quadrant can sometime take years,but over the past 12 months alone, in this space, four vendors have made it as Leaders.
Three vendors have moved from the Challengers quadrant to the Leaders quadrant, including FTI Technology, kCura and Kroll Ontrack, whileExterro has made it from the Visionaries’ Quadrant.
Gartner’s usual note of caution is worth keeping in mind here, particularly given that that some vendors cover one, or one set of functions very well. Gartner advises those looking to invest in e-discovery tools to take a look at all the vendors before deciding where to invest. This includes a list of vendors that Gartner is tracking, but which didn’t make it into the Quadrant at all.
Electronic Discovery Reference Model Criteria
At a very basic level, to be included a vendor needs to sell enterprise software licenses, a software application or e-discovery SaaS, and while some of them also provide e-discovery services, the provision of services on their own is not enough to make the grade.
Vendors also have to cover at least two out of three broad functional areas relating to the Electronic Discovery Reference Model (EDRM).
The Electronic Discovery Reference Model (EDRM) was developed in 2005 and consists of a highly detailed reference model that is used as a standard for the discovery and recovery of digital data.The three broad areas for the sake of the MQ consist of:
- Left-hand side of the EDRM: Identification, collection, preservation and processing vendors that have either a workflow-based system or a search and information access system for IT and legal departments to use.
- Right-hand side of the EDRM: Vendors focused on processing, reviewing, analyzing and producing documents, either in early case management or at a later stage of review, whose products include features such as document categorization and redaction.
- Information management: Vendors offering information management or repository functionality plus e-discovery functions.
Of course vendors that cover the entire end-to-end process are also included as, according to Gartner, more and more enterprises are looking for products that provide end-to-end functionality. They also must demonstrate the following:
- That they generate at least US$ 20 million in revenue per year from the sale of e-discovery software
- Own the intellectual property and copyright to the software
- Have at least 50 customers in production
E-Discovery Market Context
The e-discovery market at this stage is one of the more developed markets in the information management space. Enterprises and legal firms now depend on digital information management for accuracy and efficiencies,and increasingly require software that can deal with the growing amount of information that needs to be processed in legal and compliance-based actions.
The legal system is also following changes in the kinds of technology available with procedural legal rules in both the US and the UK changing to incorporate these developments.
This has caused massive disruption in the legal solution vendors’ market, which was once characterized by many small providers and some large ones. However, this has shifted to a growing emphasis on software and managed services providers with manual processes giving way to off-the-shelf commercial, legal solutions.
Mature as the market may be, it is still growing at a phenomenal rate with consolidation now one of the principal driving forces in the market with the overall value of the market to grow to US$ 2.9 billion from US$ 1.7 billion between 2013 and 2017.
If you ever got the impression that business world is increasingly mired in legal actions and litigation, then this Quadrant would confirm that impression.
Currently increasing volumes of litigation has ensured that the amount of legal actions been taken every year is growing at a compound rate of 15%, which has a direct, knock-on effect on the amount of data that enterprises must keep, store and discover every year.
If the market in the US still dominates with vendor revenues generated in this space concentrated largely in America, then Europe and Asia are catching up so that the US share of revenues from this market is set to drop from 81% in 2012 to 70% in 2017.
There are a number of adjacent software markets, including EIA, enterprise content management, enterprise search and content analytics that will force many vendors to extend their offerings in these areas, or force them to buy the functionality that they don’t have already.
Gartner expects to see vendors in these areas extend their offerings to include e-discovery functions, and vendors already in the e-discovery market to acquire additional capabilities from the content analytics or workflow sectors.
As a result of this, Gartner has identified 4 different types of buyers that fit into the EDRM framework:
- In-house Buyers: These are buyer that are looking to take the initial phase of the e-discovery process either for the first time, or to replace existing tools. In this use case, IT managers are the decision makers with strong input from the legal department.
- Process Control: These are buyers that want to take control of the e-discovery process. Legal teams are the decision makers here and may develop a list of vendors that they are interested in, which will then be brought to the IT department. The IT department will be asked to make an evaluation here.
- Consolidate functionality: These are vendors that are looking to pull all the functionality together and make the process as cost-effective as possible. They tend to be looking for platform solutions with the decision driven by the legal department.
- Information governance: These are enterprises that are focused on information governance or management, who already own archiving or content management systems and want to use them as the basis of their e-discovery strategy. These are IT buyers for legal departments.
The Future of the E-Discovery Market
To accommodate all these different kinds of buyers, consolidation in the service provider market is underway and likely to continue for the foreseeable future. This is being driven by the need to develop economies of scale in the market and will mean that the number of firms claiming to have e-discovery products and services will shrink by 25% over the next two years, with most of the attrition among service providers.
Those legal-services firms that remain will either become large firms that are one-stop shops but not technology developers, or large firms that provide proprietary technologies for all aspects of the technology.
The larger players will need international presence in the form of data centers and local legal personnel to be competitive as the market opens up geographically.
There is also a growing interest in e-disclosure and e-discovery technologies from clients outside the US as regulatory systems outside of the US becoming increasingly difficult to navigate. Tomorrow we will look at the Leaders’ Quadrant and how they are responding to this changing market.
Title image courtesy of Johan Swanepoel (Shutterstock)