Migrated from eDJGroupInc.com. Author: Barry Murphy. Published: 2011-06-27 07:14:47Format, images and links may no longer function correctly. I had a chance to sit down last week with Johannes Scholtes, Chief Strategy Officer at ZyLAB.  I’ve followed ZyLAB for years now and was pleased to see the company so focused on the eDiscovery market.  Too often, vendors in the information management world try to offer too much and solve too many problems.  That leads to confusion on the part of prospects as to exactly what they need to buy.  Now, ZyLAB is not abandoning the broader information management market, but the company is focusing its efforts around what it can sell today – eDiscovery applications.

ZyLAB has actually been around a long time, since 1983 in fact.  I first encountered the company in the early 2000s, when the major differentiation of the product was the XML format in which it could store all available meta-information in addition to the native files of the documents.  The thinking was that the flexibility of such a back-end would be attractive to customers because they would not be locked into a proprietary format, e.g. IBM DB2, SQL Server. ZyLab can also store the meta information in any of the databases or platforms previously mentioned and the company has technical relationships with MS, Oracle, IBM and EMC.  Therefore, customers have a choice of either file based XML for the meta info or store it in a database of their choice

Frankly, I was always somewhat skeptical of this differentiator, not because it isn’t unique or valuable, but because the way corporate IT departments actually operate.  Most IT departments have strategic relationships with companies like IBM, Microsoft, EMC or the like.  Those vendors can then bundle information management software into larger deals that fit in nicely to the corporate IT budgeting process.  From my perspective, ZyLAB had the difficult job of competing against those giant vendors with big hooks into the corporate infrastructure.

Despite the challenges, ZyLAB continued to grow and show happy, high profile customers like Samsung, ING, and the FBI.  According to Scholtes, the company has experienced rapid growth in the past few years (last year was 24% growth).  Much of that growth is coming from eDiscovery and related businesses.  ZyLAB offers a suite of eDiscovery applications from legal hold to ECA and review, each modular in nature.  For example, the company feels it is uniquely positioned to help customers that need to deal with the UK Bribery Act, which has more stringent demands than even the Federal Rules of Civil Procedure (FRCP).  Zylab now instructs its salespeople to focus on selling eDiscovery applications rather than broader information software.  The vendor realizes that if it gets the eDiscovery app sold now, the information management deals will follow.  That will be the key to competing with the software giants.

To that end, the company has hired subject matter experts like Mary Mack to assist the sales force in working with legal departments.  The challenges are two-fold: ZyLAB must compete with not only the software giants, but also the point solution vendors that typically have interesting relationships with service providers, law firms, or corporate legal departments.  The fact that ZyLAB offers products across the EDRM spectrum will help, as will references like Samsung and the FBI.  And, the company is positioned well internationally with very good language support (they’ve won deals specifically due to Korean language support).  In addition, ZyLAB offers flexible deployments – on-premise, on-demand (for rent), or completely outsourced with services.

The focus now for ZyLAB is increasing its eDiscovery presence.  The vendor is hoping to differentiate on being an integrated platform that offers a less complex but flexible, solution, and on defensibility of the process via packaged methodologies that give organizations a template for getting started on solving problems.  I believe ZyLAB is in a good position to succeed, but also must more clearly define its differentiators.  While the XML back-end is one of those things that sets ZyLAB apart, we’ve still not seen the corporate world express that as a requirement.  The company sees its other differentiators in this market as: search, automation, accuracy, formats, languages, and flexibility.  It will be interesting to see if customers and prospects agree.  I’ll also be looking for more customer wins and more detail on how the product set fits together and anticipate we’ll be seeing that soon.


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