Last week, Oracle acquired Stellent. BigLaw CIOs should keep their eye on this longer term.
Stellent is a content management company, though in legal, it may be better known for its Outside In viewing technology, which is integrated into several e-discovery platforms. The merger (press release here) could have two distinct impacts. Oracle might go after the document management market, competing with OpenText (formerly Hummingbird) and Interwoven (formerly iManage). But DM is small potatoes relative to compliance.
EDD is exploding in more ways than one. Continued EDD vendor growth does not seem sustainable, at least from the corporate side, which pays the bills. The eventual solution is in the maturing of tools for corporations to manage their documents and content. With better enterprise content management (including retention, destruction, categorization, and search), many of today’s e-discovery challenges go away.
As noted EDD market observer Michael Clark of EDDix observed in an e-mail exchange:
“Not to minimize the complexity but, at the enterprise level, litigation support (including electronic discovery) is essentially a workflow problem that cuts across records policy, storage topology and content (document) management tools … as is compliance and reporting. Today, large organizations in highly litigious and highly regulated categories are beginning to look for holistic workflow solutions that can address both the prescriptive needs of compliance as well as the reactive needs of litigation.
I fully expect to see enterprise players like Oracle developing and marketing converged solutions … which will have a non-trivial impact on the EDD marketplace over the next several years. I think the large enterprise players will be strategic buyers of EDD vendors (to gain the legal domain knowledge, specific e-discovery tools and workflow patterns) and I see them as ultimately dominating the large organization marketplace. Although I don’t think that EDD was a major driver of the Oracle-Stellent deal, by virtue of the document viewing tools Oracle has acquired, Oracle is well-positioned to enter the market for converged solutions”
EDD companies currently sell at high multiples. With the dollars chasing deals and the entry of new players, competition may take a toll on pricing. If so, then I suspect that valuations will drop. That would would make it cheaper and easier for the Oracles of the world to acquire the legal domain know-how. And that could have a major impact on EDD.