Amid enduring rumours that OpenText, post its acquisition of Recommind in June, is planning to kill off the eDiscovery leader’s Decisiv Search function, Legal IT Insider caught up with UK managing director Simon Price to find out how the merger is bedding in and what plans for the future look like.
OpenText acquired Recommind in keeping with a well-documented, long term high growth by acquisition strategy, which over the years has seen it battle against the reputation that it acquires companies with a limited shelf life and then doesn’t invest.
In this case, the Ontario-headquartered, NASDAQ and TSX listed company has a dedicated Discovery Suite – launched in 2014 but never filled – which is where the Recommind business has slotted in, plugging an obvious hole and cross selling into OpenText’s enterprise world.
Price says it was OpenText’s growth plans for the three-prong Recommind business – Decisiv Search; Axcelerate eDiscovery; and Perceptiv contract analysis – that helped to decide the sale, commenting: “We could have sold to private equity but for the benefit of our clients and employees we felt OpenText was the best option to help grow our business.”
He adds: “Cloud is the fastest-growing piece of the OpenText business and it was a huge attraction for them that Recommind was already mature in the market, with a ready solution and large organisations using it. Not only do they have a huge interest in growing their cloud business but they are continuing to support on premise solutions, so we can continue to sell both.”
Notably, OpenText’s former SVP for cloud services, Gary Weiss, has become SVP GM of the Discovery business.
Big data is also a focus for OpenText, where Price says: “If you look at our three products, they all have the ability to apply machine learning to legal problems. We’ve been in AI and legal for 15 years – it’s not new.”
For Decisiv Search – the area Recommind started out in well over a decade ago before adding eDiscovery to its bench and the one with the biggest question mark over it going forward – the market has been flat for some time for Recommind.
However, Price says that Recommind has already been able to leverage OpenText’s sizeable law firm client base. “In the first 90 days, we have closed a couple of deals into OpenText’s existing client base, which breathes life and revenue into search,” he says.
The really interesting question, and one to watch, is how Recommind’s eDiscovery business is being taken forward, given the flux in the wider market, including the uncertainty being created around market leader kCura’s impending launch of RelativityOne.
RelativityOne is kCura’s new cloud SaaS offering, which could set kCura in competition with its complex ecosystem of third party suppliers, if it decides to host data directly in the cloud as opposed to partners reselling data hosting. The uncertainty is making its resellers nervous.
In contrast, Recommind – always a safe number two in the market and already firmly established in the cloud – towards the end of 2015 began, for the first time, taking on-board eDiscovery service provider partners, who can offer Axcelerate to their clients as the ‘not Relativity’ alternative.
Where Recommind has previously rebuffed potential partners in favour of direct sales, in September 2016 it welcomed litigation support provider Legastat as its first ever Axcelerate Cloud partner in the UK eDisclosure market, offering the Axcelerate Cloud eDisclosure platform to its clients.
It was a fairly under the radar announcement that nonetheless signifies a step change in the company’s approach, and one respected eDiscovery commentator said: “This certainly implies that OpenText are not going to kill off eDiscovery.”
Overall, Recommind seems to be in something of a comparatively enviable position. As eDiscovery vendors face huge pricing pressure and client demands to globalise and consolidate, Recommind now also has access to 300 OpenText staff ready to sell its products and a global support structure.
OpenText would be mad not to capitalise on the market flux and it appears possible if not likely that further eDiscovery acquisitions will follow. Price says: “I wouldn’t rule out acquisitions or partnerships that help OpenText to grow their business.”
The early financial results – and they are early – show that Recommind – which has been notoriously conservatively managed by its founders –is thriving within the OpenText platform. Price says: “We delivered double digit growth to OpenText in our first quarter.”
With difficult and unpredictable market conditions ahead, anything can change. But there is good reason why we shouldn’t yet be identifying which bit of Recommind’s business we should be writing the obituary for.
This article first appeared in the October/November Legal IT Insider newsletter. Get your free copy here