Corporations’ reliance on e-mail systems to circulate information has grown exponentially, but their ability to sort, retain, and locate e-mail messages has not evolved as quickly. “In many organizations, few procedures are in place that outline how to manage e-mail correspondences, and often companies can not quickly locate important messages,” noted Dan Blum, group research director at market research firm Burton Group.
Yet regulations, such as the Health Insurance Portability and Accountability Act, National Association of Security Dealers 3010, Sarbanes-Oxley, Securities and Exchange Commission 17a-4, are forcing corporations to put checks in place so they can locate messages quickly. A raft of vendors, including Aftermail, AmeriVault, EMC, Hewlett Packard, IBM, ILumin Software Services, Iron Mountain, Mobius Management Technologies, OpenText , Sun Microsystems, Symantec and Zantaz, have built products that deliver those functions.
“Right now, a handful of companies are perched at the top of the market, but no definitive leader has emerged,” noted Masha Khmartseva, a senior analyst at market research firm The Radicati Group.
Competing for Share
Vendors are frantically vying to grab that top spot because sales of these products, dubbed messaging archiving systems, are rapidly rising. The Radicati Group expects revenue to reach US$465 million in 2005 and increase to over $4.4 billion in 2009.
Firms need these tools because managing e-mail messages is more difficult than tracking information generated by other applications. Whereas most data tends to have a set shelf life, the value of e-mail messages ranges dramatically. One may delete a note about a lunch meeting on a given day, but he or she might need a note a customer sent about a product’s warranty months or even years later. Many companies have handed the responsibility of determining when to delete e-mail messages over to employees.
This can create problems because employees may not understand the impact of their decisions. In 1999, the U.S. District Court ordered PhilipMorrisUSA to preserve “all documents and other records” that might contain information about a government case pending against the company. Three years later, a few employees deleted messages that were a few months old. Once the deletions were discovered, the company notified the court, which fined the firm $2.7 million for the mistake.
Similar problems arose in the financial market. “When regulators first began to subpoena e-mails from large broker/dealers, there was little response as these banks had not thought about archiving e-mail to meet compliance regulations,” explained Brian Babineau, an industry analyst with Enterprise Strategy Group. “In late 2001, five banks were fined $8.25 million, which forced all financial institutions to pay more attention to e-mail archiving.”
Backup Creates New Problems
To avoid having to pay such fines, companies have been developing corporate e-mail backup policies. One option is to simply copy all of the messages sitting on their e-mail servers. “Backing up e-mail messages every day is not very efficient because a company will generate multiple copies of messages that sit on their servers seemingly forever,” Burton Group’s Blum told TechNewsWorld. Messaging archiving systems intelligently back up messages and thereby eliminate duplication.
Retrieval has been another problem. A large company could generate millions of messages. Finding a needed document represents a laborious manual task that could take a number of employees days, weeks, or even months. Among the new e-mail archiving products available is a catalog, which enables companies to organize their messages by name, date, and content so users can quickly retrieve important information.
Currently, users find a wide range of features now in these products. “Pricing for messaging archiving systems is as little as $20 per user and as high as $100 per user,” the Radicati Group’s Khmartseva told TechNewsWorld.
Price Drops to Come
How long vendors will be able to maintain the high-end pricing is unclear. To date, suppliers have been in a high growth market segment, one where corporations and financial institutions are willing to make investments without requiring an immediate return. Eventually suppliers will need to turn a profit in order to stay in business, and as this pressure builds, some will cut pricing in order to grow their business, and such movements could force their competitors to follow suit.
Another change has already taken place: An ever-widening array of vendors is delivering these systems. Because messaging archiving represents a high growth opportunity, firms, such as iLumin Software Services and Zantaz, were specifically formed to take advantage of it. Document management vendors such as Iron Mountain; enterprise content management firms such as OpenText; security vendors like Symantec; and storage vendors such as EMC and IBM, have also sauntered into this product niche.
Long term, the storage suppliers may be in the best position to emerge as the market leaders. “Messaging archiving is backing up a specific type of data and the storage suppliers have the most experience with backup technology,” noted Burton Group’s Blum.
As messaging archiving products have been evolving, yet another new challenge has arisen to invite future applications: keeping tabs of instant messaging notes. “Both e-mail and instant messages are viewed as official business records and must be monitored and archived appropriately,” Enterprise Storage Group’s Babineau told TechNewsWorld.
A few of the messaging archiving offer that capability now, and the others are busily working to add it, understanding that offering such a feature might be one way to bring them closer to grabbing a share of this fast-moving market.
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