KVS Puts Compliance on Appliances

While most of the focus surrounding the flood of new and reinterpreted laws regulating corporate emails has been on large companies and institutions, small and medium-sized enterprises are under as much, if not more pressure, according to email archiving software firm KVS Inc.

The Berkshire, U.K.-based company will announce next week that it is partnering with Network Engines Inc. to produce email compliance appliances [ed. note: say that three times fast!] aimed at enterprises with fewer than 1,000 employees.

We feel this is a really good approach for smaller companies,” says Mary Kay Roberto, VP and general manager of KVS's North America division. “They have the same requirements as the larger companies, [but] they generally have very limited resources.”

In addition to smaller budgets, small and medium-sized enterprises also tend to have smaller, and not always very sophisticated, technical staffs. While KVS has more than 500 customers for its standalone Enterprise Vault software products -- some with tens of thousands of employees -- Roberto says many smaller companies have been frustrated at the complexity of configuring their environments themselves.

"They’ve been asking, ‘If I buy the software, what kind of server do I need? How much storage, et cetera?’ " she says. "For the smaller customers, having to address each of the individual elements made the process more difficult."While it’s understandable that the cost and complexity of making email compliant could force many smaller enterprises to put off dealing with the problem, Jeffrey Plotkin, a partner with the law firm of Eiseman Levine Lehrhaupt & Kakoyiannis, says regulators don’t see it that way (see our report on SAN Security).

“Regulators will not be more lenient with smaller companies,” he says. “There are no gray areas for compliance. Either you’re compliant with [SEC rule] 17a-4, or you’re not.”

That’s where KVS's new appliances come in. Network Engines is helping KVS bundle its different software versions with off-the-shelf Intel hardware configurations, storage, and operating systems.

"Our definition of an appliance goes far beyond preloading software on a box," says Jeff Brandes, Network Engines’ VP and general manager of distributed operations. “When you build an appliance you plug it in and it should work.”

Initially, the two companies will cobrand three appliances based on KVS’ three existing software products: KVS Mailbox Archive Appliance for Microsoft Exchange; KVS Compliance Appliance for Financial Services, designed to allow companies to monitor and review broker/dealer email to ensure compliance; and KVS Compliance Appliance for Sarbanes Oxley, which offers email archiving along with customizable ways to automate retrieval in the event a company is served with a lawsuit or subpoena.The appliances, which will start shipping early next year, will cost approximately $20,000 each, Roberto says. Each appliance will be configured with between 500 Gbytes and 3 Tbytes of storage and set up for 100, 250, 500, or 1,000 users. Customers wanting several of the software functions can upgrade their appliance of choice with the appropriate software module. They can also upgrade the amount of storage on the appliance, as well as the number of users the box can handle, Roberto says.

Masha Khmartseva, an analyst with the The Radicati Group Inc., says that targeting smaller companies with inexpensive and easy email compliance solutions is a good idea. “Most other vendors are targeting larger companies,” she says.

And while companies like Legato Systems Inc. (Nasdaq: LGTO), Educom TS Inc., and iLumin Software Services Inc. do offer compliance products aimed at smaller companies, Khmartseva says larger companies still account for the majority of their sales.

“This is a very new market,” she says. “Being successful will depend on how good the vendor is at educating their customers. Saying that you’re specifically targeting smaller companies is a plus.”

— Eugénie Larson, Senior Editor, Byte and Switch