Autonomy Acquires Zantaz for $375M

U.K. software vendor Autonomy has bought email archiving service provider Zantaz for $375 million in cash in an attempt to boost its presence in e-discovery and data storage. (See Autonomy Acquires Zantaz and Zantaz Offers On Demand.)

Autonomy, up until now, has focused on digital content management. The vendor's core product is its Intelligent Data Operating Layer (IDOL) software, which acts as a form of central repository for data from file servers and document management systems. IDOL is OEM'd by a slew of storage vendors, including EMC, Symantec, and HP.

Eventually, the IDOL software engine will be built into the offerings of Zantaz, which provides managed email archiving services. The combination will be aimed at users who want to outsource their archiving tasks and who've been clamoring for better integration of email and records management. (See Outsourcing Email Not an Easy Choice, Email Gets More Outsourced Options, Outsourcers Beef Up Email Archives, and Packaged Approach to E-Discovery.)

There's no specific timelime for integration of the IDOL and Zantaz software, however. "It's a little tough to say, because we're still engaging the technical teams," and Bob Little, Zantaz's vice president of product marketing, adding that a six- to nine-month timeframe would be "a safe bet."

Moving forward, Zantaz will continue to operate as a standalone business unit within Autonomy, according to Little. "At this point, we're not expecting any real changes in the Zantaz workforce," says the exec, adding that the company's 500-plus employees, along with CEO Steve King and the rest of his management team, will remain in place.Autonomy will also keep Zantaz's offices, including its headquarters in Pleasanton, Calif., as well as sites in Boston, Canada, and the U.K.

In return, the software vendor is getting its hands on Zantaz's 1,000-strong customer list, which is said to include nine of the world's top 10 law firms, and 14 out of the top 20 financial services firms. Other notable customers include manufacturing firm Kimberley-Clark, which is using the vendor's Enterprise Archive Solution (EAS), and U.K.-based EDF Energy. (See Kimberly-Clark Chooses Zantaz and Zantaz Delivers Archive.)

With users coming under increasing legal pressure to save emails and meet regulatory requirements such as the Federal Rules of Civil Procedure (FRCP), Autonomy is now looking for a foothold in the archiving market. (See Email's Mea Culpa, FRCP Tip Sheet, Zantaz Enhances E-Discovery, and Zantaz Supports Exchange.) The vendor looked at "the whole marketplace" before settling on Zantaz, according to Stouffer Egan, CEO of Autonomy's U.S. operation, although the exec would not name other firms his team considered.

Other players in the email archiving arena include MessageOne and Fortiva. (See Managed Email: Who's Watching?, Fortiva Adds Enhancements, and Firm Keeps Tabs With Fortiva.) Rival Iron Mountain has also cranked up its activities in this space, unveiling a managed service for email earlier this year. (See Iron Mountain Makes Email Move, Iron Mountain Marches On, Iron Mountain Reports Q4, and Iron Mountain Scales Email .)

Despite the growing momentum behind email archiving, some users have voiced security concerns about sending their key data to a third party, something which could prove even more problematic in the aftermath of a major acquisition such as the Zantaz/Autonomy deal. (See Outsourcing Email Not an Easy Choice.)Zantaz's Little promises that existing customers will receive the same level of service post-acquisition, with the same Zantaz employees handling users' data. "The facilities are not changing, the people are not changing," he says. "You will still be managed by the same people that managed your materials before."

Autonomy's Zantaz acquisition is expected to be complete by August.

James Rogers, Senior Editor Byte and Switch