‘She got the ring, I got the finger’

Contact: Brenon Daly

As every country and western crooner knows, relationships can build you up but they can also break you down. (Suggested listening: ‘I Fall to Pieces’ by Patsy Kline.) That’s as true in love as it is in business, as my colleague Kathleen Reidy notes in a new report. Specifically, she takes a look at the future for StoredIQ, which got dumped by EMC last month when the tech giant acquired rival company Kazeon for its e-discovery offering. (Suggested listening: ‘She Got the Ring (and I Got the Finger)’ by Chuck Mead.)

It was undoubtedly a big blow for StoredIQ, which had a longer-standing and deeper relationship with EMC than Johnny-come-lately Kazeon. EMC has been reselling StoredIQ under its SourceOne brand since 2008. But obviously, StoredIQ will be a bit of a third wheel following the Kazeon acquisition, and the relationship with EMC is effectively over. (Suggested listening: ‘If the Phone Don’t Ring, Baby, You’ll Know It’s Me’ by Jimmy Buffet.) While the official reason has never surfaced as to why EMC passed on StoredIQ in favor of Kazeon, we might chalk it up to the difficult task of parsing out revenue in any reselling agreement, and how to value those sales. That’s always tricky.

In any case, StoredIQ is moving on. (Suggested listening: ‘How Can I Miss You if You Won’t Go Away’ by Dan Hicks and His Hot Licks.) The eight-year-old startup has solid technology to identify and manage data that lives outside companies’ managed repositories, which is a key part of e-discovery. And StoredIQ may well be a good fit for Symantec, which also had a relationship with Kazeon and may now be in the market for a new partner. (Suggested listening: ‘I May Be Used (But Baby I Ain’t Used Up)’ by Waylon Jennings.)

Unexpected partners in e-discovery dance

Contact: Brenon Daly

After a flurry of more than a half-dozen e-discovery acquisitions from mid-2007 to mid-2008, deal flow has dried up in the sector. Buyers during the active period included companies that, broadly speaking, have an interest in storing, managing and searching electronic information, including such tech giants as Seagate Technology, Iron Mountain and Autonomy Corp. Collectively, spending on all the e-discovery deals in that one-year period topped $800m.

And then, like the rest of the M&A market, e-discovery activity dropped off dramatically. In this vacuum, rumors started bouncing around. The main one, which we noted last October, had Symantec looking closely at Kazeon. The two companies have been partners for a year, with Kazeon able to integrate with Symantec’s Enterprise Vault and Enterprise Vault Discovery Accelerator. (We also did a broader matchmaking report on the sector right around that time.)

And while a pairing between Kazeon and Symantec may well have made sense, the e-discovery vendor ended up selling to EMC on Tuesday. (Terms were not disclosed, but one report put the price at $75m. We think that may well turn out to be a bit higher than the amount EMC actually paid, particularly since we understand that Kazeon was only running at about $10m in sales.) So we were a bit off on our pairing for Kazeon, just as we were off on our assumption that EMC would reach for its longtime e-discovery partner, StoredIQ. Undeterred by that, we find ourselves nonetheless wondering if StoredIQ will end up at Symantec. There’s certainly some logic to that pairing. But then again, that was also true for the other deals we came up with that never got signed.