eDiscovery Daily Blog

Microsoft Acquires Equivio (Reportedly) and Everyone Speculates what that Means for eDiscovery – eDiscovery Trends

The acquisitions just keep coming.  The Wall Street Journal reported on October 7 that Microsoft has signed a letter of intent to acquire Israeli text-analysis vendor, Equivio.  The Journal said Microsoft may pay $200 million for the startup, though Bloomberg’s report on the same day stated “Microsoft will pay materially less than that, the person with knowledge of the matter said”.  So, what does it mean for the eDiscovery industry?

Leave it to Ralph Losey to get some thought leader input on the subject.  In his most recent blog post from his excellent e-Discovery Team® blog (e-Discovery Industry Reaction to Microsoft’s Offer to Purchase Equivio for $200 Million – Part One), Ralph takes an in-depth look at the acquisition and clearly, based on the “Part One” in the title, he still has more to say.

Ralph starts with a business press view of the deal, noting that “as the WSJ article that broke the news exemplifies, they do not even seem to know that a e-discovery industry exists, nor that Equivio is part of it” and that “the WSJ just describes Equivio as a startup company that has created… text analysis software that can group together relevant texts from large amounts of documents”.  Ralph notes (or perhaps bemoans) the lack of understanding of the industry and of predictive coding by the average business journalist and states “Whatever the final price may be, the Two Hundred Million number sounds about right to me. No one else I talked to seemed shocked by the price either, which was certainly not true about Hewlett Packard’s ill-fated purchase of Autonomy for $10 Billion.” (here is a link to our previous coverage of that deal, which included an $8.8 billion write-down the following year).

Ralph then goes on to include comments from several industry insiders – most of which are on the record – from notables such as Jason R. Baron, Craig Ball, Kenneth J. Withers, Bill Hamilton, Rob Robinson and others.  Three of the comments are off-the-record (perhaps by competitors?), but the collection of comments provides an interesting perspective not only of the deal, but also of the industry overall.  Speculation runs the gamut, with a lot of comments directed toward impact on the Information Governance space and/or Microsoft’s simple desire to acquire Equivio’s artificial intelligence technology.  You can review all of the comments in Ralph’s blog here.

Having attended several of the twice yearly EDRM meetings over the years, I have noticed that Microsoft has been sending representatives to recent meetings, so there is certainly interest in eDiscovery and Information Governance at some level within the organization.  It will be interesting to see to what extent.

As we have noted a couple of times in the past, Rob Robinson’s Complex Discovery site keeps a running list of mergers, acquisitions and investments in the eDiscovery industry and goes all the way back to 2001.  And, another great resource for details about some of these transactions is Litigation Support Industry: eDiscovery Business News and Information Blog, published by Brad Jenkins, the President and CEO of CloudNine Discovery (shameless plug warning!), who just happens to be my boss (here is his coverage of the deal).

As always, leave it to Craig Ball for the best analogy of the deal: “it’s a windfall for Equivio; but for Microsoft, the price is as impactful as it would be for you or I to purchase a good steak.”

So, what do you think?  Does the acquisition signal Microsoft’s entry into eDiscovery?  Was the price fair?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.