Clearwell Systems Survey Finds Cloud and Social Media Applications will be Twice as Relevant in E-Discovery by End of 2011

MOUNTAIN VIEW, Calif. — June 24, 2011 — Clearwell Systems, Inc., a leader in intelligent e–discovery, today announced findings from a survey conducted in conjunction with analyst firm Enterprise Strategy Group (ESG). The survey, titled “Trends in E-Discovery: Cloud and Collection,” highlights the rise of litigation, the enterprise trend toward bringing e-discovery in-house, and, in particular, the growing impact of cloud computing and social media on electronic discovery. These mediums will double in importance and scope for e-discovery this year, according to respondents. The survey results were based upon responses gathered from more than a hundred Fortune 2000 enterprises and government agencies.

According to the results, 30 percent of respondents reported cloud-based applications as in-scope for e-discovery in 2010. In 2011, that number is expected to jump to 60 percent, illustrating the pervasiveness of cloud computing as part of corporate IT infrastructure and the need for companies to be in control of their data both inside and outside of their firewalls. Yet despite the rising importance of cloud-based applications in e-discovery, only one quarter of respondents deemed their organization truly prepared to handle e-discovery requests involving the cloud. When asked why they were unprepared to respond to the necessary cloud-related requests, 39 percent stated they had no prior need, while an alarming 37 percent reported their organization had simply no defined policy for discovery of cloud-based applications.

Key survey findings include:

• 60 percent of respondents anticipate discovery of cloud-based applications in 2011, double the number who reported cloud applications in-scope in 2010.
• 58 percent of respondents expect to manage social media applications as part of e-discovery in 2011, more than double the 27 percent who did so in 2010.
• With 61 percent of responses, collaboration suites such as SharePoint were cited as the most pervasive cloud computing technology impacting enterprises, followed by cloud-based email at 54 percent.
• When asked what types of social media applications would be the most relevant for e-discovery, 79 percent named Facebook, followed by Twitter (64 percent) and LinkedIn (55 percent).
• Over 70 percent of the respondents saw the number of lawsuits and regulatory inquiries increase from 2009 to 2010. Nearly half of those surveyed stated that the number of lawsuits increased by up to 20 percent and approximately 8 percent reported a dramatic increase of 50 percent or more.
• The expected rise in litigation in 2011 is nearly identical to the rise seen in 2010, with 7 out of 10 companies believing that investigations will continue to increase.
• Nearly all respondents (93 percent) intend to bring some portion of e-discovery in-house over the next year, illustrating the continued emergence of e-discovery as an integrated business process within the enterprise.

“The recent Texas court ruling allowing Facebook accounts to be screened as part of the jury selection process is just one example of the increasing importance of social media in the legal industry,” said Brian Babineau, vice president, Research and Analyst Service, Enterprise Strategy Group. “In addition, our research indicates that 34 percent of companies are currently using cloud-based applications and another 21 percent plan to, which means that e-discovery activities will have to incorporate these new enterprise data sources. –These two market trends exacerbate the urgency for enterprises to take the necessary precautions and implement the proper processes to meet the ever-changing demands of rising litigation requests. Organizations must proactively address cloud computing and social media as part of their overall e-discovery strategies, or otherwise expose themselves to magnified risk and added expense.”

“The explosion of electronic data coupled with the continuous rise in litigation has pushed e-discovery to become a core business process for organizations in every industry,” said Kamal Shah, vice president of products and marketing at Clearwell Systems. “The results of this survey illustrate how important it is for companies to adapt their e-discovery strategies to address new technologies and data sources, like cloud computing and social media, or be at risk of non-compliance. Solutions such as the Clearwell E-Discovery Platform, which provides Microsoft BPOS and full SharePoint support, help corporations manage these ever-evolving mediums, take greater control of the e-discovery process, and mitigate risk.”

ESG’s full report and analysis of the survey findings can be downloaded from Clearwell’s web site at http://info.clearwellsystems.com/wp-esg-research-survey.html.

About Clearwell Systems
Clearwell Systems is transforming the way enterprises, government agencies, and law firms perform electronic discovery (e–discovery) in response to litigation, regulatory inquiries, and internal investigations. The Clearwell E–Discovery Platform streamlines end–to–end e–discovery, providing a single product for identification, collection, preservation, processing, analysis, review, and production. Leading global organizations such as AEGON, Bombardier Learjet, Clear Channel Communications, Constellation Energy, the Department of Health and Human Services, Immigration and Customs Enforcement, GameFly, Microsoft, NBC Universal, OfficeMax, Saint Barnabas Health Care System, Time Warner, Toyota and Volvo are using Clearwell to streamline legal hold notifications, automate collections, accelerate early case assessments, intelligently cull–down data, increase reviewer productivity, and ensure the defensibility of their e–discovery process. Consistently ranked as a leader in independent e–discovery industry surveys and reports, Clearwell Systems is an active participant in the Electronic Discovery Reference Model (EDRM) Project, The Sedona Conference, and the Text REtrieval Conference (TREC). For more information, visit www.clearwellsystems.com, follow us on Twitter at http://twitter.com/clearwell, or subscribe to the E–Discovery 2.0 blog at http://www.clearwellsystems.com/e–discovery–blog/.

About Enterprise Strategy Group
Enterprise Strategy Group (ESG) is an integrated, full-service IT analyst and business strategy firm, world-renowned for forward-looking market intelligence, analysis, and consulting services that deliver proven, measurable results. Recognized as one of the world’s top 10 analyst firms by offering a unique blend of capabilities—including world-class market research, hands-on technical product testing, and expert consulting methodologies such as the ESG Strategy Lifecycle—ESG is relied upon by IT professionals, technology vendors, institutional investors, and the media for actionable IT and business intelligence.