Nuix continues rapid growth, expands e-discovery into information governance
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- Madeline Melinda Dennis
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1 Nuix continues rapid growth, expands e-discovery into information governance Analyst: David Horrigan 8 Mar, 2012 Australian e-discovery vendor Nuix has embarked on a busy 2012, releasing three new components to its platform: Nuix Defensible Deletion, Nuix Visual Analytics and Nuix Contract Discovery. These new offerings come on the heels of an equally busy 2011, which saw the growing e-discovery company issue three new product releases, acquire a forensics firm and introduce a cloud offering. Nuix says the three new offerings will be only the beginning of its activity in 2012 as it plans a major release later this year and expands beyond e-discovery into comprehensive information governance. The 451 Take A small but rapidly growing company, Nuix is making bold moves as it becomes an industry leader in e-discovery and information governance. Its customer growth has been impressive, and CEO Eddie Sheehy notes proudly that the company has never lost a customer. Nuix's roots are on the left side of the Electronic Discovery Reference Model (EDRM), but it like other e-discovery providers wants to offer full services across the EDRM and provide complete information governance to its clients. Nuix faces the challenges any relatively new company faces in competing with larger, more established players, but with its products now being used in many of the world's largest legal matters and with its growing client base, the firm is now being seen as more of a leader than a challenger. In addition, we think Nuix is smart to stress its information governance strengths. We believe the company is ahead of the curve as e-discovery morphs into information governance. Copyright Research 1
2 Ultimo, Australia-based Nuix is riding a wave of rapid growth. Since we talked with the company last year, it has grown from approximately 50 employees to almost 100, after having grown from 30 to 50 employees from 2010 to Last year, Nuix had about 220 active customers, with another 100 inactive. Today, the company boasts 490 customers. Its geographic growth is strongest in the US, which accounts for roughly half of Nuix's business, with Europe down to about 35% and Australia and Asia providing about 15%. The growth in the US business is led by growth in Nuix's sales inside the Beltway, with the company having contracts with multiple federal agencies. As Nuix expanded quickly in 2011, it also made technological advancements to its platform with three new releases. In January, at LegalTech New York 2011, Nuix released Nuix 3.2, which simplified and integrated parts of the platform and added native processing and review capabilities for Microsoft SharePoint. Nuix 3.4, released in July, added advanced early case assessment capabilities, and the November release of Nuix 3.6 added functionality and simplicity based on customer feedback, improved search functions, enhanced language identification and entity extraction. At LegalTech New York 2012 last month, Nuix announced three new features: Nuix Defensible Deletion, Nuix Visual Analytics and Nuix Contract Discovery. Defensible Deletion provides a documentable procedure for deleting documents, Visual Analytics provides graphical displays of large volumes of data, and Contract Discovery features the ability to locate and analyze contracts. The software recognizes the key elements of a legal contract, finds contracts in a data set and facilitates analysis of them. If implemented successfully, these tools could be very useful, especially Nuix Visual Analytics. Nuix has been seen by some as a technically outstanding platform used easily by IT professionals and tech-savvy lawyers more than non-tech lawyers. Just as the graphical user interfaces made Apple and Microsoft Windows-based computers easier to use, Nuix Visual Analytics and the latest interface enhancements have gone a long way to make the company a tool for non-techies, as well. In addition, in December 2011 Nuix released Proof Finder, a philanthropic project in which Nuix sells a license for up to 15GB for $100 per year, giving the company a new product for smaller customers with smaller cases. Nuix got its start on the left side of the EDRM, and the firm is known for its strength in the identification, collection and processing of data for e-discovery. Nuix considers the left side of the EDRM its strength and the focus of its future growth. The company did acquire its partner of two Copyright Research 2
3 years, MicroForensics, giving it the ability to collect data from remote devices such as hard drives, file shares and Microsoft SharePoint. However, M&A is not Nuix's growth strategy. Instead, the company's plan is to grow through partnerships integrating Nuix's technology with tools from other vendors to cover most of the EDRM. Perhaps Nuix's most notable partnership is its 2010 agreement with kcura to supply kcura's Relativity review platform with Nuix. Under the agreement, Nuix became an ISV partner of kcura to integrate Nuix and Relativity with processing by Nuix and review by Relativity. Rather than reinvent the wheel by attempting to develop its own extensive review platform, the partnership with kcura allows Nuix to offer e-discovery services spanning virtually the entire EDRM without an extensive investment in R&D. Nuix faces the challenge of taking its expertise in making unstructured data searchable and scalable and continuing its development so that customers can leave their data in Nuix longer before exporting it to third-party applications. The company also faces the challenge of developing new marketing channels for its information governance suite, but Nuix is already used by major e-discovery providers, including Huron Consulting and FTI Consulting. Competition With Nuix expanding into comprehensive information governance, its list of competitors increases. As with other e-discovery firms, the company sees different players depending on the Nuix functions clients seek. Nuix reports vying often with LexisNexis' LAW PreDiscovery and IPRO Tech, and it encounters HP's Autonomy Corp on the left side of the EDRM and Symantec's Clearwell across the EDRM. Nuix feels it has an advantage over Clearwell for processing business because it believes its product is far more scalable than Clearwell. With its left-side heritage, Nuix encounters industry leaders AccessData Group and Guidance Software for forensics business. Nuix also faces EMC, IBM, Recommind, StoredIQ and ZyLAB, as well as e-discover providers such as Daticon EED, Epiq Systems, H5, Fios, FTI Consulting, Huron Consulting, Integreon, LexisNexis' Litigation Services, RenewData and Thomson Reuters. We look forward to seeing how Nuix's new features will alter the competitive landscape. For instance, FTI Consulting may feel some heat, with Nuix Visual Analytics making a run at FTI's well-established Attenex tool with visual analytics. With its entry-level Proof Finder offering, Nuix will now compete with other providers offering low-cost e-discovery, including GGO, Orange Legal Technologies and more. As for where it will go, and where it will compete, Nuix makes a strong argument for its partnership Copyright Research 3
4 approach in saying it doesn't want to recreate software such as kcura's Relativity. Nuix's partnership with kcura to provide Relativity to its clients makes sense, the company argues, because kcura spent a lot of time and money developing Relativity, and reinventing the wheel is a bad idea. Thus, we expect Nuix to focus on its information governance and forensics strengths rather than develop a new attorney review platform. Copyright Research 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 Research 5
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