IBM Buys PSS Systems for Getting Rid of Unnecessary, Risky Data
October 18, 2010 Alex Woodie
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IBM bolstered its risk management software portfolio last week when it acquired PSS Systems, a provider of information governance software for some of the biggest companies in the world. With the company’s Atlas Suite, IBM will offer its customers a new way to minimize their legal risk by disposing of potentially legally damaging information as soon as they are allowed. Public companies and other organizations in highly regulated and litigious industries are required to keep detailed records about their finances and operations. Failure to maintain these records can have consequences, ranging from a stern rebuke from a judge, loss of a business license, a hefty fine, or even jail time for CEOs (theoretically, anyway; the Justice Department has not put any CEOs in jail over Sarbanes-Oxley just yet). It is vital that companies keep this information for as long as the law requires, and since the Enron and Worldcom accounting scandals of last decade, a boom in the business and IT records management sector of the IT industry has been playing out. However, companies that hold on to information too long put themselves at legal risk. That’s because any information that’s dug up and disclosed during the discovery phase of a lawsuit is fair game to be used against the company, even if the company was no longer required by law to hold onto it. This is the problem that PSS Systems was founded to solve, as well as the related field of legal holds and abiding by the Federal Rules of Civil Procedure (FRCP). The company’s Atlas Suite of software aims to manage the lifecycle of records by categorizing the content, connecting the legal, IT, and records management departments of a large company, assigning retention schedules, and getting rid of unnecessary data. It is through this final act–getting rid of the unnecessary data–that PSS’ customers can get a discernable return on their investment. Disposing of this data means the company spends less on storage, whether physical or cloud; it spends less on data management software, including backup, DR, replication, and ECM software; and it spends less on personnel to manage that data and to perform legal e-discovery when lawsuits hit. PSS helps customers to accomplish all of this, while keeping their legal risk in check. PSS developed a reputation for being a visionary in this field, and so attracted the interest of IBM, which is keen on clamping down on IT risk and getting companies to adopt formal risk management strategies, as a recent IBM Global Services report shows. Little is known about PSS Systems, except that it was founded in 2001 and today is headed by Deidre Paknad, a recognized expert in legal and information governance. The Silicon Valley company does not disclose its revenues, number of customers, or number of employees. It does tout a “who’s who” list of corporations that are customers, including Bank of America, BASF, Conoco Philips, Deutsche Bank, GE, JP Morgan Chase, Pfizer, Toyota, Volkswagen, and Wells Fargo. IBM, which undoubtedly already serves each of these companies in some manner, did not disclose any terms of the acquisition. It did announce plans to incorporate PSS’ products into its Information Lifecycle Governance line of products. Getting rid of ad-hoc controls and connecting a company’s lawyers, who are in charge of making information retention decisions, with the IT personnel, who have their fingers on the controls, is the eventual goal of the marriage. “With the acquisition of PSS Systems, we are able to expand our portfolio with a broader set of legal solutions that for the first time link corporate legal hold policies to the reality of how information is managed and disposed of,” says Ron Ercanbrack, vice president of enterprise content management at IBM. Wheeling and Dealing The acquisition of PSS Systems by IBM is a done deal. It was the tenth completed or announced acquisition in just the last four months for IBM, whose stock price recently hit an all-time high, making its market cap $178 billion (only Microsoft, with a market cap of $218 billion, has a higher capitalization in the IT industry). IBM’s other recent acquisitions include:
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