EMC Rumored Buying eDiscovery Vendor Kazeon

(MoneyWatch)  EMC looks set to expand its document management and storage business with the adjunction of ediscovery specialist Kazeon Systems.

EMC and Kazeon are already partners, so EMC knows exactly what it's getting, and an acquisition would ensure that Kazeon doesn't get snapped up by rivals like Oracle, HP or Microsoft, which also provide application suites intended to help enterprise customers manage their vast stores of data. The deal also illustrates the success that vendors are having in convincing enterprise customers that ediscovery software can be a more strategic tool than simply a way to ensure compliance with government regulations and litigation rules.

In fact, EMC also partners with two other ediscovery vendors, Clearwell and StoredIQ, but those vendors sell more limited point solutions geared uniquely to legal applications, while Kazeon has more rounded expertise in enterprise search. Kazeon is thus a more compelling acquisition because EMC can position its search technology and expertise as a more strategic application and expand further into enterprise search, which is one of the few sectors of the software industry that didn't miss a beat despite the downturn.

As I wrote earlier this spring, EMC has been on the prowl for an acquisition in the enterprise search market, and Kazeon not only gives it an entry into a hot sector -- ediscovery -- but provides a platform for expanding more deeply into enterprise search in general.

The enterpise search market grew by approximately 22% in 2008, according to IDC analyst Sue Feldman, not even pausing for breath in the fourth quarter.

Feldman agreed it's "a good guess" that EMC would want in on that.

There's more than simply growth that should attract EMC's attention. Feldman told me that vendors are starting to gain traction with a concept called "unified access" -- the ability to pull content from a variety of sources into a single platform.

Most major software vendors, including Microsoft, Oracle, SAP, IBM and SAS, have over the past year acquired FAST Search and Transfer, Hyperion, Business Objects, Cognos and Teragram, which were either business intelligence software vendors with integrated search components or, in the cases of FAST and Teragram, stand-alone enterprise search vendors.

EMC is known as a nuts and bolts storage infrastructure company, but it sees itself as an information management company, building in this direction since its 2003 acquisition of document management vendor Documentum and, more recently, data deduplication vendor Avamar. Without an enterprise search or unified access component, it risks being left with a big hole in its information management strategy.

If the rumor is true, it can consider that hole filled.