IBM Steps Up eDiscovery Offensive With PSS Systems Acquisition

IBM is stepping up its channel march into the burgeoning eDiscovery market with its acquisition of PSS Systems.

IBM Tuesday acquired the small Mountain View, Calif. headquartered maker of enterprise software that assists Fortune 100 companies in archiving, managing and disposing of massive amounts of data that could be the subject of potential lawsuits. Terms of the deal were not disclosed.

Integro CEO Scott Burt, a premier IBM partner specializing in e-mail management, records management and eDiscovery, said the PSS acquisition provides him with the software muscle and relationships to shorten the sales cycle and win more deals. He said PSS has the trusted relationships with Fortune 100 General Counsels that are making eDiscovery decisions.

In the last several weeks alone, Burt said the Engelwood, Colo.-headquartered Integro has pitched several Fortune 100 customers who already have PSS software. "We used to say that IBM integrates well with PSS," he said. "Now we can say that you already own IBM (software) in the general counsel's office. "

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Next: A Big Boost To The IBM eDiscovery Portfolio

Burt said the PSS acquisition is a huge boost to the IBM eDiscovery solutions portfolio. "The (eDiscovery) marketplace is hopping right now," he said. "Customers have the budgets and it is a C- (CEO, CIO) level decision. We are seeing great activity and reception in the marketplace. I budgeted for 2010 to be an up year. And I think 2011 will be gang-busters. PSS makes it that much stronger!"

IBM said PSS Systems' client base includes seven of the top 10 Fortune 500 companies.

Ken Bisconti, vice president of Enterprise Content Management (ECM) products and strategy at IBM, said the deal provides IBM's 400 ECM partners worldwide with a powerful new, high value software solution.

IBM intends to start working immediately on getting its 100-plus partners in the U.S. who specialize in governance and data compliance trained on the PSS solution. What's more, he said, IBM will also roll the product out to its several hundred-strong ECM direct sales force.

Next: IBM's eDiscovery Software Advantage

"For the channel focused on life-cycle governance and records management this is a huge win," he said. "This makes IBM the only company that has a comprehensive (eDiscovery) suite from middleware that lets you collect, manage and discover content all the way to the high-value policy governance and retention management services that PSS is providing. IBM is the only vendor that has that kind of comprehensive solution in the market."

The PSS software gives IBM another weapon in providing the largest corporations in the world with on-premise eDiscovery solutions. PSS solutions start at about $200,000 and can easily amount to several millions dollars for a Fortune 100 account.

Bisconti said IBM has no immediate plans for a cloud-based solution in the eDiscovery market. He said most customers are asking for on-premise solutions.

Next: IBM's Content Management Revenue Ranking

IBM finished 2009 as the number one vendor in worldwide content management software revenue followed by Open Text, EMC, Microsoft and Oracle, according to International Data Corp., a Framingham, Mass market research firm.

Burt said PSS is a particularly strong offering given the widespread trend among customers to break away from the costly practice of archiving any and all e-mail content. Given the relatively cheap cost of storage, that was accepted practice several years ago, said Burt.

"That has come home to roost," he said. "Managing that Niagara falls of information is incredibly costly and risky. In 2010, very few people are saying they want to archive all e-mail. The ones that did take that approach are sitting on dozens of terabytes of content being stored. It is untenable. It is incredibly expensive to store and manage that much information."