As if to underscore our belief that the cloud is set to play a bigger role in all things Information Management-related in 2012, Symantec announced this week that it had acquired cloud archiving specialist LiveOffice for $115m, its first acquisition in eight months (451 research clients can read the full deal-analysis report here.

Though the deal was not a huge surprise — some of LiveOffice’s executive team (including CEO and COO) hail from Symantec, which has for the last year been reselling LiveOffice, rebranded as EnterpriseVault.Cloud – it is a significant endorsement of the cloud archiving market; a sub-sector that we have been following closely for a couple of years (we published a detailed, long-form report on the market in late 2010), but has yet to really come to life.

Symantec, which of course dominates the on-premise email archiving market, notes that about half of all archive deployments now go to the cloud. In this respect, cloud archiving is a market that it simply has to participate in more directly. Accordingly, LiveOffice provides Symantec with a better means of serving the smaller organizations that tend to opt for the cloud model, which requires far fewer skills and resources to set up and manage than on-prem models. Of course, it also means Symantec doesn’t have to be religious about which model it promotes; whether on-prem, cloud or a hybrid of the two, it now caters to all requirements.

Symantec also made an interesting comment that LiveOffice is at the right point in its own development where the application of Symantec’s huge scale can help in growing the business, rather than be a hindrance. This is a refreshingly honest acknowledgement that it hasn’t always got the balance right in the past; buy a company that is too small, and the weight of a giant like Symantec risks starving it of oxygen altogether, rather than fanning the flames that made it successful in the first place.

The question now is whether this move may help spark broader growth of the cloud archiving market. LiveOffice was one of the first cloud providers to archive other data types beyond email, and can now store and index a wide variety of data, including from social media, file servers, SharePoint and  even SaaS applications; as more data, workloads and applications move to the cloud, so cloud-based archiving will become more relevant. One big factor in the cloud players’ favor is that email is increasingly going the hosted route, especially for SMEs; if you run corporate email as a service, then you aren’t going to deploy an email archive on-premise.

All in all, we think this is a good move by Symantec, and one that could drive interest in the other cloud-archiving pure plays out there.

The cloud archiving market will generate around $193m in revenues in 2010, growing at a CAGR of 36% to reach $664m by 2014.

This is a key finding from a new 451 report published this week, which offers an in-depth analysis of the growing opportunity around how the cloud is being utilized to meet enterprise data retention requirements.

As well as sizing the market, the 50-page report – Cloud Archiving; A New Model for Enterprise Data Retention – details market evolution, adoption drivers and benefits, plus potential drawbacks and risks.

These issues are examined in more detail via five case studies offering real world experiences of organizations that have embraced the cloud for archiving purposes. The report also offers a comprehensive overview of the key players from a supplier perspective, with detailed profiles of cloud archive service providers, with discussion of related enabling technologies that will act as a catalyst for adoption, as well as expected future market developments.

Profiled suppliers include:

• Autonomy
• Dell
• Global Relay
• Google
• i365
• Iron Mountain
• LiveOffice
• Microsoft
• Mimecast
• Nirvanix
• Proofpoint
• SMARSH
• Sonian
• Zetta

Why a dedicated report on archiving in the cloud, you may ask? It’s a fair question, and one that we encountered internally, since archiving aging data is hardly the most dynamic-sounding application for the cloud.

However, we believe cloud archiving is an important market for a couple of reasons.  First, archiving is a relatively low-risk way of leveraging cloud economics for data storage and retention, and is less affected by the performance/latency limitation that have stymied enterprise adoption of other cloud-storage applications, such as online backup. For this reason, the market is already big enough in revenue terms to sustain a good number of suppliers; a broad spectrum that spans from Internet/IT giants to tiny, VC-backed startups. It is also set to experience continued healthy growth in the coming years as adoption extends from niche, highly regulated markets (such as financial services) to more mainstream organizations. This will pull additional suppliers – including some large players — into the market through a combination of organic development and acquisition.

Second, archiving is establishing itself as a crucial ‘gateway’ application for the cloud that could encourage organizations to embrace the cloud for other IT processes. Though it is still clearly early days, innovative suppliers are looking at ways in which data stored in an archive can be leveraged in other valuable ways.

All of these issues, and more, are examined in much more detail in the report, which is available to CloudScape subscribers here and Information Management subscribers here. An executive summary and table of contents (PDF) can be found here.

Finally, the report should act as an excellent primer for those interested in knowing more about how the cloud can be leveraged to help support ediscovery processes; this will be covered in much more detail in another report to be published soon by Katey Wood.