If I say that OpenText’s acquisition of Recommind, announced yesterday, is unsurprising, that does not make it uninteresting or unimportant. There have been rumours of an acquisition by the one and of the other for some time, although the names had not been paired in my hearing. As so often with these things, it seems an obvious fit once mentioned.
Recommind is a privately-held technology company specialising in eDiscovery and information analytics. Although best known in my neck of the woods for its predictive coding technology, predictive coding is only one part of the text analytics and broader eDiscovery review capabilities of Recommind’s Axcelerate, and Recommind also has well-respected tools for contract analytics (Perceptiv) and enterprise-wide information access (Decisiv).
Long before rumours started circulating of an acquisition, it was generally assumed that this was the ambition of Recommind’s founders and funders. Set up a company, invent some market-leading technology, establish a respected brand, and generate revenues – that is the hoped-for path for most company founders, and one which usually ends in an exit via acquisition. That much is easily concluded, even without looking at the way the eDiscovery market has been consolidating in the last few years.
So far as OpenText is concerned, it has recently announced its intention to acquire businesses to complement its enterprise information management solutions. Buying Recommind brings it both additional skills in advanced analytics and an immediate place in the growing eDiscovery market.
OpenText has a well-trailed strategy for digital transformation and has talked of plans to move into machine learning, semantic analysis and text mining. It is easy to see how Recommind’s skills, and its market, fit with this strategy.
The timing is right in other ways as well. It has taken a long time (much longer than I expected or hoped for) for advanced analytics like predictive coding to become accepted for eDiscovery in litigation, regulation and investigation purposes. US court judgments like Da Silva Moore and Rio Tinto opened the doors in the US. The technology crossed the Atlantic last year with court approval in the hotly-fought case Irish Bank Resolution v Quinn. Earlier this year it gained well-publicised approval in the English High Court with its agreed use in Pyrrho, followed a few days ago by reports of its imposition by the court in a contested application in another case.
If one was looking to getting to the eDiscovery analytics market, this is a very good time to do it. Both OpenText and Recommind deserve congratulations.