Earlier this month Air Canada introduced e-mail as evidence in a $220-million lawsuit against a competitor, alleging WestJet Airlines CEO Clive Beddoe received confidential information stolen from the airline.
This is one of the latest examples of how e-mail has evolved from a means of communication
to a strategic asset. Along with recent U.S. and Canadian regulations, this shift has forced many businesses to find new ways to store, manage and access e-mail in as cost-effective, simple and risk-free a manner as possible.
$140 M worldwide market
The Yankee Group expects significant market growth in e-mail archiving services over the next several years. In a report released earlier this year, the research firm found that archival software alone generated US$140 million in revenue worldwide, or two-thirds of the overall archiving revenue in 2003. It expects that to double in 2004 and grow to US$420 million in 2008.
Factors contributing to this growth are the burgeoning market for end-to-end e-mail security services, cheaper and faster network accessible storage and combined backup and archiving solutions for e-mail and other business-critical data.
The report listed ease of access, information retrieval features, storage management and hardware costs as key criteria for evaluating e-mail archiving solutions.
Kevin Merritt, vice-president of FrontBridge Technologies Inc., a messaging and security company, pegs the market closer to US$300 million, adding many of the companies in this space are private.
E-mail services top growth
While the Yankee Group predicts continued growth for e-mail archiving software vendors like Legato (now a division of EMC) as well as storage system vendors, e-mail archiving services will surpass this growth in 2004. Services growth is driven by providers as they get closer to bringing end-to-end e-mail processing services to market — bridging the gap between security and storage markets, the report said.
“”The storage itself doesn’t provide any management or intelligence, so they have to partner together,”” said Stephanie Balaouras, who co-authored the report. “”The more robust services they can offer in a package, the more competitive they’ll be.””
Vendors unite
Balaouras, senior analyst at the Yankee Group, said she’s seeing consolidation across vendor lines.
“”People don’t want seperate point solutions anymore or different types of data management services. Whether you’re a standalone software provider selling in-house or you’re an outsourcer that’s looking at e-mail, it’s got to be a robust set of services.””
For example, Marina del Rey, Calif.-based FrontBridge acquired e-mail archiving company MessageRite Inc. in August. The deal expands FrontBridge’s offerings to include e-mail and instant message archiving for regulatory compliance, legal discovery and business continuity.
“”The areas where (MessageRite) was strong, FrontBridge was missing. The archiving piece and areas where we were weak and namely the anti-spam and anti-virus, FrontBridge was strong,”” said Merritt, former president and CEO of MessageRite. At press time, Merritt said the companies will have completed the merging of their technologies behind the scenes so that all messages go through one Front-Bridge infrastructure.
MessageRite’s technology blocks all internal and external messages and stores a fully indexed copy of each message in an offsite message archive centre. FrontBridge, on the other hand, offers inbox management services, including spam filtering, virus scanning, secure e-mail, policy enforcement and disaster recovery.
FrontBridge’s Canadian partners include Telus, which primarily focuses on its anti-spam and anti-virus services, and Burnaby, B.C.-based Tillica Technology Solutions.
E-mail archiving and storage provider Zantaz Inc. recently acquired Steelpoint Technologies, which provides hosted and onsite solutions for electronic discovery and litigation support.
“”(Steelpoint) provides us with a complete end-to-end solution to allow us to deal with e-mail archiving and management compliance-related issues and now litigation support and electronic discovery to help our customers deal with information risk management,”” said Craig Olson, vice-president of marketing at Zantaz, which is headquartered in Pleasanton, Calif. and has an office in Ottawa.
In March, Zantaz acquired an Ottawa-based Educom TS Inc., which gave it an on-site e-mail managing solution called Exchange Archive Solution.
PIPEDA driving convergence
Throughout 2004 and 2005 the market will see convergence in storage, content filtering and archiving markets being driven by regulatory requirements for end-to-end security solutions, the Yankee Group said.
U.S. regulations cited include SEC 17a-4, NASD 3010, HIPPA and Sarbanes-Oxley. Similarly, PIPEDA is forcing some businesses to review security and data retention policies.
“”There are usually two components to regulation,”” said Balaouras. “”One is security in terms of keeping the information secure. The other is data retention.””
Asked if regulatory requirements are driving growth in his business, Merritt replied, “”Yes and no.
“”The companies that have a real strong sense of urgency to get something done today are primarily motivated by regulation, whether it’s the SEC rules or HIPPA rules,”” he said. “”They are fearing some sort of retribution or punishment for not being in compliance.””
Mike Gaines, e-mail and file management product planning manager at Zantaz Canada, said there is general awareness among his company’s customer base but not every business is deploying a compliance solution.
