No longer rumored in the halls of the ILTA conference, the intent of Enterprise CMS and storage vendor EMC to acquire Kazeon is now official. The unconfirmed deal size is at about US$ 75 million.
What does that mean for the two companies? How did the eDiscovery industry take the news? Let’s take a look at some first reactions and thoughts.
Kazeon’s software is said to be able to perform early case assessments and eDiscovery activities across multiple ESI sources — in addition to analytics, concept-based search and collaborative review. Exactly what EMC needs to round up its SourceOne software suite and to make it all in-house without having to OEM any of its parts.
EMC positions the outcome of the deal as an “end-to-end eDiscovery solution” that will extend capabilities of the existing SourceOne family of products from eDiscovery, archiving and compliance perspectives.
But can Kazeon really support that claim? The competition doesn’t think so. According to Recommind’s Craig Carpenter, Kazeon can do collection and legal hold, but doesn’t have sophisticated review capabilities, which will need to be either built or acquired.
Coincidentally, EMC has been reselling eDiscovery software from Kazeon, StoredIQ and Clearwell Systems in the past. But it was Kazeon that was welcomed to the family. Carpenter told us that the acquisition plans were “not a very well-kept secret.” But the “heavy-betting money was on StoredIQ. Clearwell was also an option ahead of Kazeon.”
What helped Kazeon to differentiate from other candidates, says Carpenter, is its enterprise search capabilities, which are considered a critical component in today’s eDiscovery.
This acquisition is a long-awaited chance to pop that champagne for Kazeon’s “long-suffering shareholders,” as Clearwell’s CEO, Aaref Hilaly refers to them. Kazeon raised a whopping more than US$ 60 million in funding in the past several years only to report less than optimistic revenues of around US$ 8 million.
The jury is still out on whether this acquisition will be successful and have any impact on the business of the biggies like IBM, Microsoft and Open Text.
More on CMSWire: Why EMC Wants to Buy eDiscovery Vendor Kazeon?