Welcome to the Leaders’ Quadrant, Symantec

Victor Limongelli Last week, Gartner released its first-ever Magic Quadrant for the E-Discovery Software market. On top of that validation of the market, yesterday Symantec announced that it is acquiring Clearwell for $390 million, which serves as an additional endorsement of the importance of the eDiscovery market and, not coincidentally, drastically improves Symantec’s position in the Gartner report. And at 7x trailing revenues, undoubtedly Clearwell’s investors are extremely happy with the price paid.

However, any time a small technology company is acquired by a company 110 times its size (in terms of revenue), it raises a number of questions, too. First, one of Clearwell’s strengths was its focus on the eDiscovery market, particularly for law firms and service providers (which may have been half or more of Clearwell’s customers) – will the “Information Management Group” of Symantec bring that same commitment to that market? Second, will Symantec change Clearwell’s pricing approach, in which Clearwell charges for a set amount of capacity (and then requires customer to pay for more capacity) or business model, in which the Clearwell product is delivered on an appliance? Third, what technology integration issues will arise? Finally, will other archiving vendors, such as IBM, EMC, and others, attempt to block and undermine Clearwell at every turn, making it impossible for companies that do not use Symantec archiving products to effectively use Clearwell?

The real question is how this affects current Symantec and Clearwell customers and prospects. There are almost always product casualties and roadmap ambiguities in an acquisition with overlapping technologies. In my view the likely outcome is that Symantec will ditch its Discovery Accelerator product altogether, ditch Clearwell’s nascent collection capabilities, and attempt to graft Clearwell’s ECA and review product directly on top of Symantec’s EnterpriseVault email and document repository. And that Symantec will try to feed as much data as possible into that repository. In a world where data volumes are growing quickly and business data is ending up everywhere – on laptops and desktops, on file servers, on email servers, in the cloud, on tablets and smartphones – it remains to be seen whether the centralization of massive amounts of data into a repository will be able to stem that data tide, or deliver value to the eDiscovery market.

Victor Limongelli is president and chief executive officer at Guidance Software.

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