Companies Scramble to Archive E-mail

Legal and regulatory requirements force costly projects.

Regulatory and legal issues are forcing IT managers to create costly e-mail storage and archival systems as electronic documents replace paper as official business records.

Users and analysts note that courts and regulators are increasingly pushing companies to produce stored e-mail documents on demand or face penalties.

For example, allegations that Intel Corp. failed to properly archive potentially critical e-mail messages some written by its top executives could prove crucial in an antitrust lawsuit filed against it by rival Advanced Micro Devices Inc. in 2005.

Jason King

Jason King The company failed to produce e-mails for the court by March 2007, prompting Sunnyvale, Calif.-based AMD to charge that the chip maker was negligent in not saving or archiving the disputed documents.

The Delaware federal court extended Intels deadline until August, noted a company spokesman.

Were in the process of going through literally millions and millions of e-mails, he said. The spokesman declined to reveal exactly what Intel is doing to retrieve the documents, or what may happen if they arent retrieved in full.

Archived e-mail has also become a critical part of a class-action lawsuit that charges Best Buy Co. and Microsoft Corp. with signing up thousands of customers to Microsofts MSN online service and eventually charging their credit cards without permission.

One lawyer representing Best Buy last month admitted to falsifying at least two e-mails that were handed over to the plaintiffs. The lawyers firm, Robins, Kaplan, Miller & Ciresi LLP in Minneapolis, has since voluntarily withdrawn from the case.

Beth Terrell, a partner at Seattle-based Tousley Brain Stephens PLLC, which is co-counsel for the plaintiffs, said that Best Buys initial delay in delivering pertinent archived e-mails raised suspicion.

We had all this e-mail coming from Microsoft discussing basically the issues that are key to our case, and some of them were discussions with Best Buy, she said. We were getting virtually no electronic documents or e-mail from Best Buy. It seemed very suspicious to us.

Best Buy did not respond to a request for comment on the four-year-old case.

Terrell said she is astonished that executives continue to use e-mail which she called a powerful [legal] tool as an unofficial means of communication.

You find corporate officials making admissions in e-mail that you would not find anywhere else, and a lot of the time, they forget they made those admissions, remarked Terrell.

Brian Babineau, an analyst at Milford, Mass.-based Enterprise Strategy Group, said that his firms research has found that three out of four organizations that go through court-ordered electronic discoveries must produce e-mails related to the queries.

Those steps usually involve identifying e-mail, preserving it and producing e-mail documents for a court, he said.

Babineau noted that the full implications and weight of e-mails as viable legal documents will likely be determined through court decisions.

Larry Kimmel, director of compliance at First Albany Capital Inc., a New York-based brokerage firm, noted that despite declining costs for basic e-mail storage systems, archiving can still be as costly as it is critical.

Keeping up with evolving data retention and regulatory compliance requirements compels First Albany to continually evaluate and buy new technologies, Kimmel said.

Its becoming very expensive, he said. Its becoming a very costly proposition to abide by all the [government] rules coming out.

Kimmel said that First Albany uses Iron Mountain Inc.s Email Archiving and Supervision hosted services to monitor every electronic message passing through its servers, enabling managers to comply with state and federal regulations.

He noted that First Albany also uses Boston-based Iron Mountains services to store and archive electronic data including 4.6 million e-mails as of May 2007. E-mail has proliferated beyond everyones original vision, Kimmel said. Virtually no one sends paper any longer.

In addition, he said, the financial services firm must store all incoming and outgoing correspondence, including e-mail and instant messages, for at least three years to comply with U.S. Securities and Exchange Commission regulations.

According to a study released last month by market research firm IDC, in 2011 companies will spend $21.8 billion for legal discovery and litigation-support infrastructure products, physical records and storage management services. That total represents annual growth rates averaging 17.6% beginning this year.

As Jason King discovered, corporate executives are increasingly turning to IT administrators to find archived electronic communications that can settle sensitive disputes between companies and customers, or employees and managers.

King, a Windows group supervisor at Foxworth-Galbraith Lumber Co., said archived e-mail was used to settle a conflict between a member of the Dallas-based companys sales staff and a customer over the contents of a specific message.

The archived copy of the disputed e-mail showed that the salespersons description of the contents was correct, he said. It definitely made a big difference, King said.

I do think [e-mail archiving] is a critical issue, in terms of being able to guarantee that an e-mail is valid and that it exists in its original form, he added.

Foxworth-Galbraith Lumber has used Archive One software from Reading, England-based C2C Systems Ltd. to archive e-mail messages for more than two years, King said. The product saves nondeleted e-mail after a specified number of days; its backed up by IBM Tivoli Storage Manager for long-term off-site storage.

King said his company selected the C2C offering over EMC Corp.s EmailXtender and Symantec Corp.s Enterprise Vault. Archive One was priced lower than the other products and offered simpler management capa­bilities, he said.

Virtua Health in Marlton, N.J., installed archiving technology last year to ensure compliance with the Health Insurance Portability and Accountability Act and other regulations.

Andrew Gahm, network architect at Virtua Health, said the hospital network chose Mimosa Systems Inc.s NearPoint e-mail archiving system because of its log shipping capability, which keeps a clear trail of e-mail and archives every message delivered.

Virtua Health, which runs a single IT system to provide services to four interconnected hospitals in New Jersey, can now produce archived e-mails on demand, Gahm said.

He noted that since the new technology was installed, no important requests for archived data have been refused.

Theres been several times in the past where legal or human resources have asked for information about e-mail usage from our users that I havent been able to retrieve, said Gahm. Over the last year, Ive been able to get that data for them, so thats been a big plus.

Copyright © 2007 IDG Communications, Inc.

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