Stagnant Magic Quadrant for 2014 E-Discovery
David Horrigan, Law Technology News
Gartner’s Magic Quadrant is a closely watched barometer of the EDD market. The company is one of many research organizations that track EDD trends, including my employer, 451 Research, Forrester Research, International Data Corp., and others. Gartner launched its Magic Quadrant for E-Discovery Software in 2011, and has developed Magic Quadrants for other IT markets.
The Magic Quadrant’s four categories are based on what Gartner calls a vendor’s ability to execute and its completeness of vision.
For inclusion in the Magic Quadrant, vendors must license EDD software, software appliances or software-as-a-service for which they own the intellectual property, have at least $20M in annual revenue, cover at least two functions of the Electronic Discovery Reference Model and meet other requirements.
At first glance, a stagnant Magic Quadrant might make one think the EDD market itself was stagnant, but many industry observers don’t see it that way.
“A lack of movement in the Magic Quadrant doesn’t necessarily indicate a downturn in the e-discovery market,” said Barry Murphy, senior vice president at Seattle-based X1 and a former EDD industry analyst at both Forrester and the eDJ Group. “We’ve had some significant new technologies in the market in recent years, and the last 18 months may represent a period where corporate customers are sticking with their current technology and evaluating their options before changing to a new technology—and a new vendor.”
Murphy predicts there may be greater movement among EDD providers in the near future. “Given the cyclical nature of any industry, including the tech sector, you’re always going to have periods where there’s not much change among providers, but I think we will see change in coming years,” Murphy said, adding that, although the EDD industry is entering another period of new EDD technologies, with the legal market’s conservative approach to embracing new technology, change comes more slowly in legal than in other business verticals.
Bobby Balachandran, president and CEO of Beaverton. Ore.-based Exterro (a vendor named a Leader in the Magic Quadrant), agrees a lack of movement in the report doesn’t equal a dormant market. “There has been a considerable consolidation in the e-discovery market, but I expect to see a more movement,” he said.
Although some have predicted the move to corporate information governance will supplant the e-discovery market, Balachandran disagrees. “The demand for e-discovery is growing. Information governance is something that’s in support of e-discovery, not in lieu of e-discovery,” he said.
Some EDD experts have gone a step further, noting the limitations of the Magic Quadrant.
Chris Dale of the U.K.-based eDisclosure Information Project, is skeptical. “I am no great enthusiast for lists, which purport to rank e-discovery software providers, feeling that even Gartner’s sophisticated model does not do justice to the range of factors which contribute—or which ought to contribute—to the decision-making,” said said Dale, a former London-based law firm litigation partner, who is now a consultant to many of the companies in the Magic Quadrant.
Dale says there’s at least one important takeaway. “The fact that the rankings have hardly altered this year does at least confirm one thing: the e-discovery world is holding its breath as predictions of impending cataclysm for some—and a leaping ahead for others—seem to have been deferred for another year.”
David Horrigan is analyst and counsel at 451 Research and a former reporter for LTN and The National Law Journal.