“Consolidation” is the term used in the eDiscovery industry to refer to the series of acquisitions and mergers seen over the past few years. The usual reaction when one is announced is instant surprise (“I didn’t see that one coming”), followed quickly by recognition of the thinking behind the exercise. Some of these deals have significant implications, not just for the parties involved, but for their partners, users and staff. They can also have significant implications for competitors.
It was announced this week that Nuix has bought FTI’s Ringtail eDiscovery software, paying $55 million for the software, related assets and transitional support services. FTI Consulting has entered into a three-year preferred partner licensing agreement with Nuix for the Nuix Ringtail review platform. FTI’s press release is here.
Nuix began as a small forensics company in Sydney. Over the years, it has successfully extended its range, first into eDiscovery, and then into security, risk and compliance, and information governance and more. In all these areas, its main strength has lain in its very powerful processing ability and its strength in analytics. It successfully applied the technology and skills honed in eDiscovery (which necessarily focuses on past events) into real-time awareness of activities happening now. At each stage, the processing power was the key to successful implementation.
This was a lot to cover – bigger companies than Nuix have made strategic errors by biting off more than they can chew and diluting their development resources beyond the areas of their primary strengths. Nuix stood back from developing its own review platform, and became for many the processing tool of choice before data was sent to other applications (including Ringtail) for the review stage.
The lack of a fully-developed review tool perhaps led many to think that Nuix was abandoning eDiscovery despite assurances to the contrary, and despite the prominent place which discovery retained on Nuix’s website. The lack of a review component mattered. With one bound, Nuix has affirmed its commitment to discovery.
FTI Consulting is a very large global business advisory firm covering a wide range of financial, legal, operational, political and regulatory activities. Most of us involved in eDiscovery thought of FTI primarily in terms of its technology segment with its first-rate review platform Ringtail and its highly-respected consulting practice.
The big shift in FTI’s technology segment came with an agreement struck with Relativity last year for FTI to offer RelativityOne. This enabled FTI to offer its clients a wider set of options – they could choose Ringtail or RelativityOne and still have the benefit of FTI’s skilled and experienced consulting services.
Set in that context, the deal with Nuix makes sense for both of them. FTI Technology can focus on its broader skill set while Nuix gets in one bound a world-leading review platform with which it has long had both business and technical connections anyway.
The quotations in FTI’s press release reinforce this picture. Sophie Ross, Global Chief Executive officer of the Technology segment at FTI Consulting said: “We believe Nuix’s development expertise and commitment to Ringtail will allow Ringtail to flourish and grow, and we are pleased that our consultants will continue to offer and use Ringtail along with other tools to serve our global clientele.”
Rod Vawdrey, Group Chief Executive Officer of Nuix said: “The acquisition of Ringtail further builds on our position as a leading e-discovery processing, review and analytics platform…..Technology is transforming the e-discovery industry and customer requirements are increasing in complexity and cost, and our customers and partners have been asking for a better end-to-end solution. Integrating the power of Ringtail into the Nuix platform equips our extensive partner and distribution network to raise the bar for excellence in e-discovery.”
I spoke to Nuix CTO Stephen Stewart, who said: “The feedback from both our customer base and others in the industry has been outstandingly positive. We are hearing ‘game changer’ and ‘it’s about time’ from all parts of the world. We always knew that an already existing integration, our long history of working together, and our similar customer-first cultures were something we could build on. But we still thought there may be a short-term risk in how this was viewed. But wow, we are thoroughly humbled and energized to increase our leading position in the industry.”
Stephen told how Ringtail first came to use Nuix as its processing engine. The story ended with two leading technology experts waxing eloquent about what could be accomplished by combining the strengths of the two companies. The excitement hasn’t wavered since, he said, and has been accelerated with the acquisition announcement.
I am off at the weekend to the Nuix User Exchange at Huntington Beach. My primary task there is to moderate a panel about the GDPR and privacy, and to interview people from Nuix, its partners and its users. eDiscovery was already on the agenda; it is a fair guess that the Ringtail acquisition, and its implications for Nuix’s clients, will be much discussed. Exciting times.