Planet Data crosses the pond of a post-snowden planet to partner with UK-based Exigent

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1 Planet Data crosses the pond of a post-snowden planet to partner with UK-based Exigent Analyst: David Horrigan 14 Aug, 2014 US-based e-discovery vendor Planet Data wanted to increase its international business, but it knew it had some challenges to overcome in its international aspirations. It wasn't a multi-billion-dollar, multinational conglomerate that could go out and build datacenters across the globe, and its home country the home of 80% of its business and all its datacenters was the US, the current international boogeyman of data privacy. Although US vendors can make reasonable arguments that the US is far from the only nation with legal data privacy issues, perception is often reality, and our research indicates US-based IT vendors are suffering internationally because of concerns about US data privacy. Planet Data now has an international partner, and it is marketing fully the newest element to its Exego e-discovery platform, Exego Review. Planet Data's Exego platform is now the sole attorney review offering at an Exigent colocation datacenter in Dublin. (Of course, a Dublin datacenter hasn't done much good for Microsoft in protecting client data from the US government in recent legal proceedings, but the ISP/SaaS distinction is a topic for another day.) The new review capabilities give the company the ability to be a relatively full-service e-discovery software provider with processing, early case assessment/early data assessment (ECA/EDA) and attorney review capabilities, and it allows Planet Data to combine software and services at home, get its software platform in front of more international clients and some would argue, most importantly get some of its operations off US soil to assuage the fears of potential international customers. Copyright The 451 Group 1

2 The 451 Take In complex commercial litigation, data often crosses international borders, but in the post-snowden world, many international clients don't want their data in the US. It's a problem for US-based vendors handling client data, but it's a problem that large US-based consulting and IT firms with vast international footprints are often equipped to handle. So what are all the other vendors without an international footprint supposed to do? Opening datacenters across the planet is a non-starter. For Planet Data, the answer is to partner with UK-based Exigent, which, in turn, becomes an international promoter and service provider for Planet Data's offerings, while Planet Data continues its domestic e-discovery software and services business. The Planet Data-Exigent partnership still faces significant challenges competing against the Big Four and e-discovery specialist consulting firms. Nevertheless, with the Exigent partnership, Planet Data has taken an important step toward becoming a planetary company instead of a US vendor with some international business. Context Founded in 2001 as a litigation services provider, Elmsford, New York-based Planet Data has been a part of the dramatic change in the litigation pretrial process, having started with both paper document productions and digital evidence as discovery became e-discovery. Although Planet Data didn't start with the technical expertise and software portfolio of many of its competitors, it was founded and continues to be run by people who served in the trenches of litigation discovery rather than technologists who designed software for an industry in which they had never practiced. The company transformed itself in 2008 with its purchase of Cerulean LLC, through which it acquired that company's Cerulean Engine processing technology. In addition to Cerulean's technology, the deal also gave Planet Data the technical expertise of Cerulean's staff, and the senior management of both companies still compose the combined company's management team today. On the software side, Cerulean Engine became the underlying technology Planet Data used in developing its Exego platform discussed below. The company has a staff of 68, including 40 in the US, 10 development staffers in Mexico and another 18 on the development side in Bangalore, India. The Bangalore staff consists of independent contractors, but they work exclusively on Planet Data work. In addition to the company's headquarters in Elmsford, outside of New York City, Planet Data has branch offices in Woburn, Massachusetts outside of Boston, and in Englewood, Colorado, outside of Denver. It also has sales offices in various US cities. The privately held company does not release revenue data, but it states that it is profitable, and we estimate annual revenue to be in excess of $10m over the past three years. Partners In 2007, the company became one of the first partners of kcura for its Relativity e-discovery platform, and Planet Data remains a Relativity hosting partner today. The company was also an early adopter of Content Analyst Company's Content Analyst Analytic Technology (CAAT). A Content Analyst partner since 2006, Planet Data uses CAAT as an OEM component for technology-assisted review in its Exego platform. In addition to these technology partnerships, Planet Data has launched a services partnership this year with UK-based e-discovery/e-disclosure provider Exigent Group Limited. Known primarily as a legal process outsourcing (LPO) specialist, the company's primary operations are based in Cape Town and Perth, Australia, locations Exigent says it chose because of the English language, common law legal system and common culture. Exigent also has locations in Bangalore, Toronto, Los Angeles and New York. Copyright The 451 Group 2

3 The Exigent partnership gives Planet Data global reach for its Exego software, as well as the ability to take on business requiring international e-discovery services. Since the passage of the Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism (USA PATRIOT) Act in the wake of the attacks of September 11, 2001, there have been concerns about US data privacy protection, and those concerns became heightened after last year's NSA-Snowden controversy. This controversy over US data privacy has made life difficult for US vendors handling private data for international matters or vendors wanting to expand their businesses to include cases involving international data. With all of its datacenters in the US, Planet Data found itself in an unenviable position for expanding its business internationally. The partnership between Planet Data and Exigent gives Planet Data the ability to get its software into Exigent's international markets, and the company is also opening a datacenter in Dublin. On the other hand, Exigent has been looking to expand its business into the US market, so this partnership along with Exigent's acquisition last year of the legal services provider mlegal provides a route for expansion. Planet Data is planning a tight partnership with Exigent, and there will be single points of contact for clients where customers can call one number for offerings by both companies. But like any partnership, only time will tell how effectively it will work for both sides of the deal. Products As noted above, Planet Data made the Cerulean Engine the technological backbone of its Exego e-discovery platform, a SaaS offering, and the company has continued to invest in R&D for the platform. The platform's three major components are: Exego Processing, Exego ECA and now, Exego Review. Exego's search engine includes dtsearch, Content Analyst, Lucene and SQL Server. As the name implies, ECA/EDA is performed by Exego ECA, and the newest component of the Exego platform, Exego Review, gives the company an internal technology tool for attorney review. One of the more significant features is the platform's use of predictive technology in both the Exego ECA and Exego Review modules. Competition With each new offering, Planet Data adds to its list of potential competitors. The company's traditional competitors have included its dozens of fellow Relativity Premium Hosting Partners. Planet Data emphasizes that it is continuing its relationship with kcura and that it doesn't see its partner as any kind of corporate 'frenemy.' Nevertheless, the relationship is bound to change somewhat with Planet Data now firmly in the e-discovery attorney review business with its own technology. Having said that, there are certainly other Relativity hosting partners that have their own technologies. Through its partnership with Exigent, Planet Data is now a de facto member of the LPO community, putting the Planet Data-Exigent partnership in competition with LPO providers such as Integreon, Thomson Reuters' Pangea3, QuisLex and UnitedLex. As it moves into the international market for e-discovery software and services, Planet Data will face much larger competitors than even the combined size of the Planet Data-Exigent partnership. Among these may be the Big Four consulting firms Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC) and e-discovery specialists such as Epiq Systems, FTI Consulting's FTI Technology unit and Kroll Ontrack. SWOT Analysis Strengths Weaknesses Planet Data has well-developed e-discovery technology, and unlike some other vendors that have invested in R&D for acquired e-discovery, the company has managed to keep on board the people who developed its acquired technology, making its Exego platform less of a 'Frankenstack' and more of a classic example of integrated people, processes and technologies. Although we find Exego Review to be a good, well-integrated tool, with this attorney-analyst having had multiple demos of it during its years of development, it is still a relatively new, and thus, relatively untested tool in the broader market. Copyright The 451 Group 3

4 Opportunities Threats The Exigent partnership opens new doors for Planet Data. Instead of the slow, costly and risky process of expanding itself internationally, the partnership gives the company an immediate presence around the globe. Partnerships are usually great during the honeymoon, and Exigent has formidable capabilities. However, corporate history is littered with partnerships that soured. Although we like Planet Data's strategy, no matter how close the partnership is, the success of Planet Data's international initiative is largely in the hands of another company as it faces much larger competitors with their own resources in control of their own destinies. 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

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