Migrated from eDJGroupInc.com. Author: Barry Murphy. Published: 2011-05-20 07:16:52  Slowly, but surely, for a source here and a source there, the seeds of a rumor were planted into my brain over the past few weeks.  People kept asking whether it was true that Symantec was about to buy Clearwell Systems.  I know better than to answer those questions; sure, I could ask my contacts at either company, but they wouldn’t be able to comment.  And, having been an analyst over a decade now, I know better than to believe every acquisition rumor I hear.  In the past year, I’ve had folks practically confirm that Autonomy is buying Open Text and that Oracle is buying Autonomy.  I don’t believe the rumors until I see the announcement.  And so it is – Symantec buys Clearwell Systems for $390 million.Symantec has been an archiving market leader with its Enterprise Vault (EV) product line for over 15 years.  The company added the Discovery Accelerator product to give customers the ability to conduct eDiscovery searches and quick reviews of information stored in EV.  That was sufficient when most discovery centered on email, but the world has moved beyond just email and eDiscovery solutions must address all content sources.  Solutions must also address more of the eDiscovery process than collection and preservation; there must be functionality for processing, review, and analysis and applications for early case assessment (ECA).  This is where Clearwell will fit with Symantec.On the surface, this acquisition makes sense.  Digging deeper, though, there are some challenges and questions that arise.  First, Clearwell’s collection and legal hold modules are new and untested – will these offerings be enough to extend Symantec out from just eDiscovery on what’s stored in Enterprise Vault?  Second, what will this mean for the Symantec Discovery Collector offering?  The product is the provided through an OEM relationship – will that relationship be impacted by this acquisition?  Third, will the acquisition of Clearwell – more of a specialist in ECA – be enough to compete with Autonomy, who has a broader enterprise content management (ECM) platform and a well-respected search engine foundation?  Or, is Clearwell the first of several acquisitions aimed at competing better with Autonomy and then eventually challenging EMC, IBM, Microsoft, and Oracle in the information management space?The $390 million price tag feels high.  Sources tell me this is an 8x multiple – putting Clearwell revenues in the $50 million range.  That feels about right.  We haven’t seen that kind of multiple in our industry in quite some time.  One has to wonder how the price is justified.  In fairness, I haven’t had a chance to talk to the venture community about it or to either of the principal companies involved.  We’ll be looking into this further when we get into a deeper analysis.  Look for a broader post next week with some recommendations for current customers and prospects from both companies. 

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