Planet Data parlays software and services into e-discovery's new legal model

Transcription

1 Planet Data parlays software and services into e-discovery's new legal model Analyst: David Horrigan 19 Jun, 2012 Not that long ago, the components of e-discovery came in separate silos. E-discovery service providers and software vendors operated together but usually as separate businesses with law firms running the show. However, times are changing, and in 21st century e-discovery, the line between e-discovery service providers and software vendors is blurring as both rush to provide one-stop shopping. Planet Data, a company that got its start as a service provider, is making moves to capitalize on that change. The Planet Data of today is the result of the service provider's acquisition in 2008 of Cerulean, a litigation technology developer. The combined company used Cerulean's technology in the development of Planet Data's Exego e-discovery platform. Initially a processing engine, Exego has expanded to cover more of the Electronic Discovery Reference Model (EDRM), and early next year, the software will expand to the review stage with the new ExegoReview application becoming part of the release of ExegoV4. The 451 Take We think Planet Data made a smart move in buying Cerulean, and it seems as though that bet may be about to pay off. With the rise of 'big data' and information governance, the left side of the EDRM becomes more important, and the processing strength of the technology Planet Data acquired in the deal helps the company meet that need. At the same time, most money in e-discovery is spent on review, so Planet Data's upcoming ExegoReview product, coupled with the company's traditional strength as an e-discovery services provider, gives it Copyright The 451 Group 1

2 the ability to cover all of the bases. Although the e-discovery business is shifting from law firms to corporate legal departments, those corporate legal departments are also staffed by lawyers, and when trying to decide where to obtain e-discovery software, some of those lawyers may just feel more comfortable going to a company such as Planet Data that has years of document review experience under its belt. Context Founded in 2001 by lawyer Howard Reissner and document management executive Zoltan Horvath, Elmsford, New York-based Planet Data spent the first several years of its existence as a litigation services provider, managing document productions of both paper and electronically stored information. In what would be a fortuitous move given the current industry appetite for litigation vendors with their own proprietary software wares, the company made a strategic decision in 2008 to expand its business beyond services and acquire its own e-discovery software. The acquisition of Cerulean was a turning point for Planet Data not only because it obtained the Cerulean Engine processing technology, but also because it picked up and unlike in many M&A situations retained members of Cerulean's senior staff, including cofounders David Cochran, a discovery management executive and former US Department of the Treasury staffer, and Michael Wade, a former manager of the Spatial Data Analysis Laboratory at Virginia Tech University. In the combined company, Reissner serves as CEO, Horvath is president, Cochran is executive VP (EVP) and COO and Wade serves as EVP and CTO. Rounding out the executive suite are VP for Consulting Services Brad Berkshire, a former law firm litigation technology director, and VP for Marketing and Communications Laura Marques, a former music industry executive. Planet Data's project management and consulting operations are headed by VP for Project Management Kevin Leser and VP for Operations Dan Roose, and the company has a headcount of 40 employees plus a contract development team that works in tandem with the technical employees who moved over from Cerulean. After joining Planet Data, Wade and the technical team began the transformation of the Cerulean Engine into Planet Data's new e-discovery processing and early case assessment (ECA) platform, Exego. Released in 2010, Exego is now in its third version. Not surprisingly, the strategy behind the acquisition and the focus of the combined company is to capture more of the e-discovery market by being able to offer both services and software. Copyright The 451 Group 2

3 In addition to its headquarters just north of New York City, Planet Data has a hosted support center in Woburn, Massachusetts, outside of Boston, additional branch offices in New Jersey and Colorado, and satellite offices in North Carolina, Ohio, Pennsylvania, Texas and Virginia. Although the privately held firm does not release revenue numbers, it is currently profitable and has no debt. It has approximately 80 current customers and 155 active matters, and has worked on more than 1,200 litigation projects over the years. At one time, Planet Data's customer base was approximately 80% law firms and 20% corporate clients. Like other e-discovery vendors, the company has seen corporate clients become a greater part of its business, and now the split is about 60% corporate and 40% law firms. Technology When Exego was first released at LegalTech New York 2010, it was marketed as a Web-based ECA and workflow platform built on the Cerulean Engine. Last year, the company released version 2 of Exego, which added concept search capabilities licensed from Content Analyst and more robust reporting features. Then, last December, Planet Data announced the current version of the platform, ExegoV3. With this latest version, the Cerulean Engine has completed its metamorphosis into Exego. ExegoV3 added asynchronous searching allowing review attorneys to continue their work and recall previous search queries while multiple search searches continue to run as well as random sampling and enhanced metadata searching. Exego now takes the technology's original strength as a patent-pending processing engine to process data on a server farm of just over one hundred servers at Planet Data's New York and Colorado datacenters. The search workflow continues through Exego, augmented by Latent Semantic Indexing-based Planet Data Analytics with concept search technology licensed from Content Analyst, and ExegoReview will be accessed from a Web-based interface developed with Microsoft Silverlight 5. Of course, ECA remains an important focus for the company, and Planet Data takes a clever approach to avoiding the early case assessment vs. early data assessment nomenclature debate by keeping it ECA, but referring to its platform as Early Cost Assessment. Early next year not coincidentally, just in time for LegalTech New York 2013 Planet Data will release ExegoV4 with its most significant enhancement being the addition of ExegoReview, the company's new review platform. With the addition of ExegoReview, ExegoV4 will have the capacity to process, search, cull, review and produce data, all on the Exego platform. Competition Copyright The 451 Group 3

4 With each addition to the Exego platform, Planet Data's roster of competitors also expands. Like other e-discovery vendors with a focus on the left and middle of the EDRM, Planet Data partners with kcura for the use of the company's popular review platform, Relativity. Planet Data became an early kcura partner in 2007, and it now has a full Relativity hosting team with five Planet Data employees having attained Relativity Certified Administrator status. Despite Planet Data's introduction on ExegoReview, it plans to support Relativity through its continued relationship with kcura, and doesn't expect to be a direct rival. Nevertheless, when ExegoReview is launched formally, the list of competitors will grow substantially but so will Planet Data's offerings. In Planet Data's pre-exegoreview world, ExegoV3's rivals are a mix of software vendors, service providers and consulting firms, including AccessData, Applied Discovery, Daegis, Deloitte, Epiq Systems, Exterro, FTI Consulting, Guidance Software, KPMG, Kroll Ontrack, Nuix, Orange Legal Technologies, OrcaTec, Recommind, RenewData, RVM, Symantec and ZyLAB. SWOT Analysis Strengths Weaknesses Having both software and services is an important advantage for Planet Data. It's not an original idea service providers have been adding software, and pure-play software vendors have added services. Nevertheless, Planet Data's services side gives it experience in the legal trenches that many software firms simply don't possess. Although Planet Data occupies a sweet spot in the middle of the EDRM with ExegoReview about to extend the reach of the company's platform, it still will be slightly short of complete coverage of the EDRM, something many corporate clients are now demanding. Opportunities Threats The addition of ExegoReview will give the company an opportunity to equip its managed review projects with its own review software. Although it doesn't cover the entire EDRM, that ability combined with Exego's processing and ECA capabilities enables Planet Data to offer close to one-stop shopping for e-discovery and will give it a foothold in the very lucrative review market. Lawyers both in law firms and in corporate legal departments tend to be a tradition-bound, conservative bunch. Many will not want to leave a review platform they know and trust for something new and untested, especially if they still view Planet Data as primarily a service provider. Copyright The 451 Group 4

5 Reproduced by permission of The 451 Group; This report was originally published within 451 Research s Market Insight Service. For additional information on 451 Research or to apply for trial access, go to: Copyright The 451 Group 5