E-Discovery and Mainframe Survey Results Are In

A new report from a survey conducted by BMC Software Inc. indicates the outlook for mainframes is improving, with 65 percent of respondents expecting the platform to grow and attract new workloads. In other survey news, the results of the sixth annual Socha-Gelbmann Electronic Discovery Survey shows electronic data discovery (EDD) expenditures were up 43 percent in 2007 over 2006 and no one vendor excels in all categories.

Focal Points:

• The third annual survey of more than 1,100 mainframe users by BMC showed mainframe growth and retention reached its highest levels since the inception of the surveys, at 65 percent this year, up from 52 percent in 2007. More than 70 percent of the respondents are focused on meeting increased operational demands, including cost reduction and improved productivity pressures, with 87 percent of large enterprises and 68 percent medium businesses concerned about energy costs. 63 percent of those surveyed that operate separate mainframe and distributed systems stated the need for shared tools and applications spanning across both platforms is very important and something they plan to implement. Key integration points are business service management (BSM) disciplines such as change management, IT service management (ITSM), and service desk. A surprising 29 percent of companies reported having mainframe and distributed operations organized together – with shared operational management – to create common governance across platforms, BMC reported. 38 percent reported that while the mainframes are organized separately from their distributed systems, they are subject to a level of common standards and operational guidelines.
• The survey also found software remains as the dominant cost, consuming 40 percent of mainframe operations budgets. According to BMC, this reflects a relatively high degree of automation in the management of many mainframe environments and contrasts sharply with general IT operations, where labor is the dominant expense. Mainframe software and hardware continued to show the highest rate of anticipated increases in spending, according to the majority of respondents. Staffing skill concerns remain high, although an overall decrease in concern was noted, with less than one-third of all respondents indicating a concern in this area.
• The results from the Socha-Gelbmann Electronic Discovery Survey found 2007 EDD commercial expenditures were up 43 percent from the previous year and exceeded $2.7 billion and is expected to grow by 21 percent, 20 percent and 15 percent in 2008, 2009, and 2010 to more than $4.6 billion. This excludes the costs for the other parts of the litigation, regulatory or similar processes. Using a ranking of more than 350 qualitative and quantitative factors, Socha-Gelbmann determined the top five EDD overall service providers were Autonomy Zantaz Corp., Fios Inc., FTI Consulting Inc., Kroll Ontrack Inc., and LexisNexis, a division of Reed Elsevier Inc. Similarly the top five EDD software providers were Autonomy Zantaz, Clearwell Systems Inc., FTI Consulting, Guidance Software Inc., and LexisNexis.

Experton Group believes software spending will maintain strong growth with good margins as executives recognize it is less expensive to pay for automated applications, management, and tools than to bear the people costs associated with dedicated application servers and inefficient e-discovery processes. The mainframe survey shows the majority of polled IT executives in organizations where there are already mainframes installed recognizes the advantages of mainframes and will be leveraging them. While this is encouraging for mainframe supporters, the opinions of CFOs and other influential non-IT executives and IT executive at firms without mainframes are not reflected. In those groups, the desire and demand for mainframes still have a ways to go. On the EDD front, the strong push for more e-discovery software is a good sign of the maturing of the market and an understanding of executives of the costs and tradeoffs. Business and IT executives should invest in understanding the total costs of business processes and IT operational expenditures and then develop and implement solutions that reduce both general administrative and IT operational expenditures. (See this week's Research Note "Key to Reducing IT Expenditures."