Veritas is playing catch-up in the e-mail archiving market with the purchase of its leader, KVS, for $225 million. Meanwhile, KVS' biggest customer and Veritas' main competitor, EMC, has just started offering an e-mail archiving service through partner Equant.

KVS (KVault Software) has more than 900 customers and 1.7 million users, and Gartner lists it as a leader, in fact the only leader, in its e-mail archiving Magic Quadrant 2. Gartner also predicts that e-mail archiving seats will grow at a 57 percent compound growth rate through to 2007.

The e-mail archive market is rapidly becoming the battleground for an entire industry, thanks largely to the rise in compliance regulations, such as Sarbanes-Oxley, SEC 17a-4, NASD-3010, FDA CFR 21 Part 11 and others. Archiving e-mails and other messages is very different from ordinary data backup not least because of the need to handle attachments and the existence of e-mail threads of messages and replies and distribution lists.

As such, any company claiming to offer a complete soup-to-nuts storage set of products has to have e-mail archiving capability. However, while EMC has it already with Legato EmailXtender and also as a product set with Legato and Windows Server 2003, Veritas does not. Until now.

Back in March, Veritas announced Data Lifecycle Manager 5.0 software to "help organizations meet global regulatory requirements for data management - from creation to deletion - across all storage media." It involved partnerships for different media types, such as e-mail. But e-mail is becoming so central that partnering is not enough and Veritas has gone out and bought what it sees as the best.

The KVS Enterprise Vault software provides policy-based archiving of e-mails and attachments and files held in Microsoft Exchange, SharePoint, Office and Windows file systems. The indexing faclities simplify retrieval.

Indirectly admitting the gap in Veritas' product range, chairman, president and CEO, Gary Bloom, said: "KVS will add another strategic component to the Veritas utility computing portfolio. [By buying KVS] we can deliver customers the market-leading software for storing, managing, backing up and archiving all their information."

Data Lifecycle Manager to go
Enterprise Vault will replace Data LifeCycle Manager during 2005 and be called Veritas Enterprise Vault. Such a hurried move, less than six months after Data Lifecycle Manager was announced, suggests that the product has been less than successful. Product life is generally longer than half a year. Veritas' corporate marketing director for EMEA, Tony Occleshaw, admitted: "We under-estimated the sense of urgency around compliance with customers due to all the regulations."

Interestingly, current KVS CEO Mike Hedger thinks Enterprise Vault is the best-selling email archive product on EMC's Centera. Apparently up to 25 percent of KVS revenue is derived from sales to EMC and some of this might be lost. Veritas and EMC will no doubt be having interesting discussions about the way forward.

Equant extends EMC's lead
Concurrently the EMC e-mail archiving product lead is being extended. Its partner Equant, a France Telecom subsidiary, is teaming with Kahn Consulting to offer a fully-managed e-mail archiving service across remote links. EMC Legato's EmailXtender and EmailXaminer products are being used in the service.

This is an ASP model with hosting centres in Atlanta, London, Rennes and Sydney. Customers can choose to host their central archive on their own premises. Andy Early, sales and marketing director at Equant, told us: "Enterprises have seen 20 to 30 percent savings in customer trials of this service." A version of the service for smaller businesses will be rolled out in 2005 - demonstrating how far ahead EMC is compared to Veritas.

More e-mail archive activity
At the same time, there has been another acquisition in the e-mail archiving field with FrontBridge Technologies buying MessageRite. This company's managed email and instant messaging service store messages in its data center. Existing FrontBridge services scan e-mail for spam or virus content and they will be combined with the archive service.

As well as this, online backup and recovery provider Amerivault Corp. and e-mail archiving specialist Connected announced this week an outsourced e-mail archiving service to help users prepare for compliance regulations. Amerivault E-mail Archiving Service combines Amerivault's backup and recovery systems with Connected's ArchiveStore/EM e-mail archiving tool to provide management of a business's e-mails off site.