* StoredIQ President and CEO James Schellhase discusses the effect of the economy on e-discovery
Network World recently caught up with James Schellhase, president and CEO of StoredIQ, and asked him about the effect of the economy on e-discovery and other compliance-related activities.
How did you get involved with StoredIQ in the first place?
I’ve been involved with the company since its inception back in 2003. I was approached by the founders with just a concept. I put the first money in as an investor to ferret out the opportunity and examine whether there was a market, get a beta product and served as chairman of the board for the first three years of the company. I came over as president and CEO two years ago.
The company has changed a lot from the time it was Deepfile to now . . .
We built a company that was originally wanted to just do information management software. My philosophy as an investor is that you have to listen to the customer and not build a cool technology that goes out and hunts for a market. That’s how a lot of startup companies can waste a lot of money. Having been on the other side of the table, I’ve seen it happen too many times, where you try to create a market rather than follow the market and watch the customers. And, that’s what we do – we first went out to the market to do storage and file management, then about two years ago we saw the stars all aligning towards e-discovery and governance, risk and compliance. We made the decision that we were going to go after that market.
How has the e-discovery market changed in the last couple of years?
Typically in the past, e-discovery has been more of a service provided by service vendors than it has been something that has been behind a firewall. Most people were doing self-collection of information they believed to be relevant for an e-discovery matter and sending it out to a service provider who did the culling and processing of that data and the production of it for a legal matter or governance. We saw that it is cost-prohibitive to keep that up as your company is growing. In the past, companies have had the philosophy that they just want to save everything, they don’t want to be out of compliance and we don’t want to not have that data. It became such a voluminous and ominous task for these companies that they started to believe there was a better way to do this task. Most analysts believe that companies are going to bring this functionality behind the firewall. That’s what we’ve done.
Rather than outsourcing this capability, your software lets an organization bring e-discovery in-house…
If you are familiar with the EDRM process, our software deals with the identification, collection, preservation and processing of the data. We cull the data to a smaller set to be turned over to a review tool, so you can become very specific about what is applicable to a matter and then turning over the relevant data and not overproducing data.
In the past it seems that organizations might have waited for litigation to happen before installing a tool such as StoredIQ …
Yes. You may be in the middle of a matter, there may be data that is created on a daily basis that is relevant for a matter. Instead, customers can move data around their enterprise using our [software-based] appliance and decide what relevant data they need to be keeping and what data they can get rid of. Thereby, they have control over their data, they know where it is and they know what data is relevant to a matter.
How do you think the current economic climate will affect e-discovery?
We’ve been through a period of deregulation and given all the economic woes out there, we are going to see a pendulum swing to the other side where there is increased regulation and mandatory compliance. You look at healthcare and the Health Insurance Portability and Accountability Act (HIPAA), which was an ominous requirement for enterprises. But the government agencies didn’t enforce HIPAA and it became a paper tiger because the first audit didn’t happen until five years after HIPAA was implemented. No one went to jail because of HIPAA. We know in the current economic environment that there is going to be a lot of punitive penalties for non-compliance, deceit or mismanagement. That will be good for our business.
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