As the need to satisfy compliance, legal discovery and storage management increases, a growing number of companies have added email archiving software to their networking infrastructure, a new IDC study shows.
And channel companies are part of that trend, with value-added resellers (VARs) adding hosted email archiving services, and picking up more contracts as email archiving requests ramp up.
One beneficiary of that trend is Francis Poeta, president of Cliffside Park, N.J.-based P&M Computer Inc., who said since the beginning of the year his company has picked up four email archiving contracts worth $400,000 in total.
The IDC study found that last year 53% of respondents have deployed an email archiving application, up from 40% in 2005. IDC's checks with customers and vendors indicate that there were more small businesses adopting software to manage their emails as they recognize the importance of capturing documents for potential evidence in court cases.
Additionally, the worldwide email archiving applications market grew 45% in 2006 and IDC expects the market to approach $1.4 billion in 2011, with a five-year compound annual growth rate (CAGR) of 23.4%.
According to Vivian Tero, senior research analyst for compliance infrastructure at IDC, there has been a shift in the use of email archiving applications since 2005. Previously, applications were used for mailbox management, and many of the companies using the software were financial firms that used it for regulatory SEC and NASD compliant archiving management. Today, these applications are used for document management.
"It's changed a lot in the sense that now there is a broader number of companies that are looking at an email archiving application for managing business records, not just because of SEC requirements but also because they're trying to understand their legal email discovery exposures," Tero said.
That shift has been compounded by the introduction in December 2006 of the Federal Rules of Civil Procedure (FRCP), which acknowledges the significance of electronic evidence.
Email archiving software presents potential dangers and challenges for resellers
P&M's Poeta believes the legal implications are huge for VARs who advise and implement email archiving software for documents that may be used in legal cases.
"There is a liability issue. VARs should constantly ask themselves the question: Have you misled the customer? Do you know enough about document management and the law to be able to talk intelligently and advise companies accurately about what emails to archive? This could result in legal troubles for VARs further down the road," Poeta said.
Malcolm Bliss, director of software products at Dayton, Ohio-based Crown Partners, a document management firm, said IT executives are much more interested today than they have ever been in implementing email management software because of litigation risks, the greater sophistication of email applications and the ease to adopt. In fact, 12 months ago Crown Partners added to its company's revenues by offering hosting services for clients that want to outsource their email archiving tasks.
Bliss also observed that the increasing volume of electronic documentation is changing the email archiving landscape.
"Ediscovery used to be less sweeping, but now with so much information to give out electronically, legal discovery tends to encompass more information than it used to, and that's putting a bigger burden on those who need to go through the ediscovery processes," Bliss said.
In addition to choosing the right software, and understanding a company's retention policies, Bliss explained that VARs implementing email archiving software have the challenging task of helping companies keep up with the amount of email traffic.
"It's very common for an individual not to keep up personally with reading and responding to all the emails let alone categorizing it," Bliss said. "It's an incredible challenge to understand what to keep and how long to keep it," Bliss said.
IDC's Tero said one pressing need for VARs is to be able to translate legal requirements into technology architecture that effectively stores and efficiently handles ediscovery requests.
"VARs really need to be conversant on what's the distinction between backup and archival tasks, for example, from a compliance and from a legal discovery perspective. What is the potential discovery burden based on those architectures?" Tero said. "They need to understand what happens when you have a legal hold from a technology standpoint and not from the business owners' or the legal officers' standpoint," Tero added.
Let us know what you think about this story; email: Nicole Lewis, Senior News Writer