Those of us who have been attending LegalTech New York for more than the last decade (this will be our 14th year), or even the past five years or so, have seen a major shift in LegalTech's exhibit hall - namely the drastic vendor landscape shift from a broad collection of technology and service providers to what these days is a eDiscovery/litigation support dominated world. In fact, we published a breakdown of the number of eDiscovery vendors for LegalTech NY 2012 and 2011. Although the need for applications and services required to manage the litigation lifecycle and accommodate the various phases of the Electronic Discovery Reference Model (EDRM) is undeniable, we wondered what role electronic data discovery (EDD) vendor consolidation would play when looking at the 2013 figures.
Here are some stats to back-up continued EDD acceleration: According to a recent Gartner report, EDD software sales reached $1.4 billion worldwide in 2012 and will reach $2.9 billion by 2017. A related article in by Evan Koblentz of Law Technology News cites these findings including that EDD software will increase by more than 15 percent annually over the next five years — with a growth rate double the rate of overall business software. So while this all bodes well for EDD vendors, our question is how long and why? Well, Gartner predicts at least another five years, and since complexities related to litigation/eDiscovery don’t seem to be decreasing, this is probably a very conservative estimate. What role will continued vendor consolidation play? On paper, M&As are designed to streamline operations, provide clients with a broader service/product offering and create more competitive pricing options. The reality is much grimmer. Plus, what ripple effects will a “less than perfect” merger like HP/Autonomy have on future activity? A related statistic: According to a December “Venture Beat” post, HP’s value has dropped from $61 billion at the time it announced the Autonomy acquisition to $25 billion today, a drop of almost 60 percent. What effect will this have on other blue chip tech companies that look to enter the EDD fray? Symantec, EMC and IBM are all in New York touting their wares.
How does international growth of EDD vendors based on an increased need for global litigation support measure up? Gartner's 2011 data found that 82 percent of EDD software revenue stemmed from North America, 12 percent from the EMEA region, and 1 percent from Latin America. Finally, how will the Big Data buzz (or it even a scare?) affect corporate legal and law firm use of EDD software?
We'll be looking more during eDiscovery at LegalTech this week, as well as the entrance of Big Data and other trends, but for now here are some stats based on a six year show review (these numbers were pulled from LegalTech show guides):
- LegalTech NY 2013 = 41% eDiscovery (224 vendors; 92 eDiscovery)
- LegalTech NY 2012 = 45% eDiscovery (223 vendors; 100 eDiscovery)
- LegalTech NY 2011 = 43% eDiscovery (237 vendors; 103 eDiscovery)
- LegalTech NY 2010 = 42% eDiscovery (229 vendors; 96 eDiscovery)
- LegalTech NY 2009 = 35% eDiscovery (263 vendors; 91 eDiscovery)
- LegalTech NY 2008 = 29% eDiscovery (262 vendors; 76 eDiscovery)