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Gartner Predicts Growth, Consolidation in E-Discovery Market

Jul 24, 2013
Double-digit growth and continued consolidation awaits the global e-discovery market over the next few years, according to Gartner’s Magic Quadrant for E-Discovery, published in June.

Double-digit growth and continued consolidation awaits the global e-discovery market over the next few years, according to Gartner’s Magic Quadrant for E-Discovery, published in June.

Gartner expects the market will grow by about 15% annually, from $1.7 billion in 2013 to $2.9 billion by 2017. This growth will be largely attributable to two factors: increasing volumes of litigation and regulatory investigation; and the growing volume of content and data that must be searched in support of these activities.

The majority of this market growth will reside with U.S. vendors, but the growing awareness of e-discovery issues in Europe and Asia will drive growth in those regions, gradually eroding the U.S. share of the total market from 81% in 2012 to less than 70% in 2017.

In addition, software vendors in adjacent markets, such as enterprise content management, will likely extend their offerings to include e-discovery functions, and vendors already in the e-discovery market will acquire additional capabilities from the content analytics or workflow sectors, for example.

While revenues grow, Gartner expects the number of firms claiming to have e-discovery products and services to shrink by 25% during the next two years. Most of that attrition is expected among service providers, not software vendors. Consolidation is already underway and is expected to continue, driven primarily “by the disintermediation of law firms, pricing pressure, and the need to develop economies of scale in data management.”

Predicts Gartner: “The remaining legal-services firms will take one of two routes by becoming either large firms that are ‘one-stop shops’ but not technology developers, or large firms that are one-stop shops with proprietary technology for all aspects of the EDRM, not just the traditional hosting and review capabilities that have long sustained the industry. Although there is room for regional and specialist players, this is the part of the market that is consolidating and shrinking fastest. The larger players will need international presence in the form of data centers and local legal personnel to be competitive as the market opens up geographically.”

The growth that Gartner points to can be good news for information governance (IG) professionals. As e-discovery needs increase, there is an increased need for the skills and knowledge IG professionals can bring to the identification, collection, and protection of records and information during litigation. The IG professional understands how information and records flow throughout the organization, how it is used, where it is stored, and how it is protected. This knowledge is critical to the organization's ability to meet its legal obligations in litigation.

A related area is the need to place legal holds on records and information that may be relevant to specific litigation in order to prevent its destruction. ARMA's 7 Steps for Legal Holds of ESI and Other Documents is an easy-to-use resource for effectively and quickly implementing legal holds when that is needed. This and other relevant resources are available in the ARMA online bookstore at www.arma.org/bookstore

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