(Updated with analyst comment September 22 - 9 a.m. CT)
September 21, 2011 – A new study of the e-discovery industry’s growth during the five years to 2011 shows that e-discovery service provider revenue has grown at an average annual rate of 5.6 percent to an estimated $786.5 million in 2011 according to industry research provider IBISWorld. Additionally, the research shows the e-discovery industry is showing signs of continued strong growth through the next five years.
The recent market expansion is notable in the face of the economic recession of the past few years. Ever growing quantities of data account for the industry’s fortitude, according to IBISWorld. The expanding types and sources of data will also help the market. In the study, corporations cite social networks as a significant source of information spurring demand for new e-discovery products.
As the economy recovers, corporate profit rebound has allowed businesses to reinvest e-discovery software. Based on the time period’s rate of profit rebound, IBISWorld projects an overall economic recovery of 7.3 percent annually over the next five years. IBISWorld anticipates this will drive e-discovery revenue to reach $1.1 billion by year end 2016.
Along with growing corporate profit, the affordability of these products will make them more pervasive in in-house e-discovery procedures. In addition, law firms’ demand and outsourced e-discovery services are expected to increase during 2011.
Senior analyst Nikoleta Panteva suggests that IT departments get proper training to ensure software is meeting potential as well as manager needs. "IT managers will also need to be aware of potential privacy laws and regulations," Panteva says. "Corporations will need to invest in, not only the software, but in training and consulting services as well."
The number of vendors in the industry has declined over the five-year period. In 2011, Symantec purchased Clearwell, and Hewlett-Packard will complete its acquisition of Autonomy in the next few months. An industry-wide trend toward consolidation has pushed the number of e-discovery service-providing firms down at an average annual rate of 2.0 percent over five years to 2011, to 612 businesses.
The complete E-Discovery Service Providers report is available from IBISWorld.
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