As IDC looks back on ediscovery corporate technology priorities among the highly litigated industries in 2009, the following takeaways emerge:

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1 C U S T O M E R N E E D S A N D S T R A T E G I E S e D i s c o v e r y P r i o r i t i e s A m o n g C o r p o r a t i o n s f r o m H i g h l y R e g u l a t e d a n d L i t i g a t e d I n d u s t r i e s : W h a t H a p p e n e d i n ? Vivian Tero I D C O P I N I O N Global Headquarters: 5 Speen Street Framingham, MA USA P F As IDC looks back on ediscovery corporate technology priorities among the highly litigated industries in 2009, the following takeaways emerge: Companies continue to feel the pressure to do more with less. The average number of litigation events experienced by corporations per year is rising. During this period, the panel indicated that the average volumes of data collected per litigation matter were much larger compared with those from prior year. In 2009, 37% of panelist indicated that the average collection per matter was greater than 2.5TB, up 12 points from the 2008 results. While ESI volumes grew, ediscovery budgets were either flat (36%) or declining (42%). Corporations are starting to adopt best practices and automate key ediscovery activities and reevaluate their current approach in consuming these applications and services. Corporations are also taking a more strategic approach to the acquisition of the enabling technologies. The decision to take ediscovery activities in-house is a function of a corporation's process and IT maturity, its resources and capital structure, the appetite of its legal counsel and IT organization to employ third-party service providers, the complexity of the organization's IT environment, and its litigation profile. To date, the activities that corporations are most likely to take in-house primarily address repeatable manual processes in the left-hand side of the EDRM. The investment priorities highlighted in 2009 point to opportunities in records management, archiving, search and text analytics, and legal hold workflow automation and management. Early case assessment (ECA) software applications are an emerging product category. Corporations investing in ediscovery technologies are advised to benchmark their policies and protocols against their peers. Filing Information: January 2010, IDC #221802, Volume: 1, Tab: Users Compliance Infrastructure: Customer Needs and Strategies

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3 I N T H I S S T U D Y This document reviews the 2009 corporate ediscovery technology priorities among corporations from the most highly regulated and frequently litigated industries. Enduser corporations should view this document as a starting point for developing a framework for benchmarking their information management and ediscovery practices. The upcoming study, Corporate ediscovery 2010: Technology Maturity, Best Practices, and Investment Priorities (forthcoming), examines the priorities and ediscovery process and technology maturity of litigant corporations from a broader range of industries. The findings of the 2010 multiclient study will be available in March. S I T U A T I O N O V E R V I E W IDC conducted a Web survey on corporate technology spending and priorities for ediscovery in June A total of 115 panelists participated in the Web survey, a statistically significant sample. Their inclusion is based on the business organizations to which they belong and their organization's intentions and priorities around technology-enabled ediscovery initiatives. Panelists were recruited from United States based global corporations from the most litigious industries financial services, manufacturing, energy, life sciences, telecommunications, utilities, and construction that had at least $500 million in revenue in In terms of the panelists' qualifications in influencing their organization's IT purchase decision, qualified panelists had to be responsible for making, influencing, architecting, or implementing technology solutions associated with their firm's litigation readiness and ediscovery programs. The key takeaways are discussed in the sections that follow. T h e P r e s s u r e t o D o M o r e w i t h L e s s I n c r e a s e s The confluence of the following developments underscores why corporations need to do more with less: The average number of litigation events experienced by corporations per year increased. In 2009, the proportion of panelists that had more than 100 litigation events in the past 12 months rose from 27% in 2008 to 46% in 2009, a 19-point increase. The average volumes of data collected per litigation matter were much larger compared with those of the prior year. The proportion of panelists whose average ESI collection per matter was larger than 2.5TB increased 12 points from 19% of panelists in the 2008 study to 37% of panelists in the 2009 study. While ESI volumes grew, ediscovery budgets were either flat (36%) or declining (42%). In 2009, 45% of the panelists said their total ediscovery budget is less than $100 million, while 46% indicated their budget is greater than $100 million IDC #

4 These pressures are compelling organizations to adopt best practices, develop technical protocols to automate key processes, and take a more strategic approach to the acquisition of the enabling technologies. C o r p o r a t i o n s C o n t i n u e t o B u i l d T h e i r I n - H o u s e e D i s c o v e r y C a p a b i l i t i e s The increasing pressure to do more with less is impacting the ediscovery capabilities that corporations are bringing internally. The 2009 study suggests that outside of review and analysis activities, most corporations for now are focusing on activities during the earliest phases of the EDRM. The panel considers the restoration of data from legacy media (f = 58%) and preservation of ESI (f = 52%) as their top 2 priorities. The ability to conduct review and analysis is the third most frequently cited priority (f = 51%). Although early case assessment packaged software applications have only been around for less than two years, 42% of the panel indicated that they are currently using these tools. Close to one-third of the panel are investing in building out their capabilities to conduct forensic collections. F U T U R E O U T L O O K T e c h n o l o g y I n v e s t m e n t P r i o r i t i e s : I n f o r m a t i o n R e t e n t i o n a n d I n - H o u s e e D i s c o v e r y Investment priorities are focused on core technologies that automate the management of ESI for retention, disposition, and legal hold. The data show that erecords management and collaborative applications (such as SharePoint/Team Rooms) (f = 30%), document management (f = 27%), legal hold notification and lifecycle management applications (f = 25%), and message and IM archiving solutions (f = 24%) are the top 4 investment priorities in the next 12 months. The 2009 data also suggests relatively growing demand for enterprise search. Despite the relatively healthy adoption of early case assessment among the panel, less than 18% of the panel had plans to invest in these technologies in the next 12 months. IDC also notes some notable shifts among the panel in their preferred service delivery models for the planned investments in ediscovery technologies. The 2009 study suggests that more corporations are open to third-party hosted and hybrid delivery models for file archiving, document management, and early case assessment applications. IDC believes that the quick time to deployment and lower initial capital outlays are underpinning this shift. 2 # IDC

5 H e a l t h y D e m a n d f o r S p e c i f i c T h i r d - P a r t y S e r v i c e s In 2009, 43% of the panelists indicated that they process 51% to 100% of the collection in-house before it is sent to their third-party litigation support service providers and outside counsel. Although corporations are investing in building up their internal ediscovery capabilities around retention and ESI preservation and collection, they continue to employ third-party ediscovery service providers. Close to 60% of the panelists indicated that they use third-party services during ediscovery. The most frequently mentioned services were computer forensics; litigation support; hosted content archiving; tape extraction, restoration, and migration; and legal technology consulting. E S S E N T I A L G U I D A N C E Corporations continue to adopt best practices in an effort to manage risks, realize operational efficiencies in core repetitive tasks and activities, and deliver better returns on their ediscovery technology investments. Rationalizing specific activities for handling data retention, preservation, and collection appears to be a near-term priority for many of these litigant companies. Corporations also increasingly realize that there is no one-size-fits-all approach for developing the appropriate information infrastructure for retention management and ediscovery. The decision on which ediscovery activities to conduct internally is a function of a corporation's process and IT maturity, its resources and capital structure, the appetite of its legal counsel and IT organization to employ third-party service providers, the complexity of the organization's IT environment, and its litigation profile. The activities that corporations are most likely to take internally primarily address repeatable manual processes. These activities allow corporations to: Ensure consistency in their legal response and strategy to specific classes of litigation matters Ensure consistency in their preservation and collection protocols to specific classes of litigation matters (These protocols must be legally defensible and mitigate potential spoliation issues.) Demonstrate consistent enforcement of corporate information retention and disposition protocols to manage risks, demonstrate compliance, and support IT operational service level and cost efficiency objectives Realize both process and IT operational efficiencies through the automation of manual repeatable processes The 2009 IDC digital universe study concludes that preservation-intense data will grow from 22% of the digital universe in 2008 to 38% of the total in Regulatory reform and the expected rise in regulatory oversight combined with the deployment of new media content, new devices, and emerging technologies will underpin this growth. Corporate ediscovery response teams must be prepared to handle the 2010 IDC #

6 retention and disposition, search and retrieval, preservation, collection, processing, and review of multiple content types. To do this, corporations should consider regularly benchmarking their information management and ediscovery protocols against their peers. L E A R N M O R E R e l a t e d R e s e a r c h IDC's Worldwide Legal Discovery Infrastructure Taxonomy, 2009 (IDC #218532, June 2009) Worldwide Legal Discovery Infrastructure Forecast (IDC #218259, May 2009) S y n o p s i s This IDC study reviews the 2009 corporate ediscovery technology priorities among corporations from the most highly regulated and frequently litigated industries. "Regulatory reform and the expected rise in regulatory oversight combined with the deployment of new media content, new devices, and emerging technologies will underpin the robust growth in preservation- and compliance-intense data," says Vivian Tero, program manager for GRC Infrastructure, IDC. "Corporate ediscovery response teams must be prepared to handle the retention and disposition, preservation, collection, and review of multiple content types. To do this, corporations should consider regularly benchmarking their information management and ediscovery protocols against their peers." C o p y r i g h t N o t i c e This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2010 IDC. Reproduction is forbidden unless authorized. All rights reserved. 4 # IDC

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