E-mail archiving and electronic discovery are no longer a best practice for a select few companies. IT departments need to get their e-mail records in order.E-mail archiving has become a high priority amid growing regulatory requirements for better electronic record keeping. "E-mail and electronic documents have become business records," says T.M. Ravi, co-founder and CEO of four-year-old Mimosa Systems, developer of e-mail archiving software for Microsoft Exchange environments. "They need to be kept over time and be searchable."

Look no further than Morgan Stanley to see what happens when e-mail storage looks like Grandma's attic. In September, the brokerage firm agreed to a $12.5 million fine for failing to produce e-mail required in court. The IT manager responsible for Morgan Stanley's e-mail archiving system was fired, then sued the company for wrongful dismissal. Morgan Stanley's CTO quietly resigned a few months ago amid the brouhaha.

Indeed, with mandates such as the Federal Rules of Civil Procedure coming into play, regulators and judges have companies on a shorter leash. "No CFO wants to go to jail," says Ravi. Mimosa is one of a handful of startups offering new products and services in this area. Gartner sees the e-mail archiving market growing to $1 billion by 2011.

Mimosa Systems' NearPoint software archives Exchange messages with options for electronic discovery and recovery. Earlier this year, Mimosa added support for BlackBerry, Palm, and Windows Mobile devices, so on-the-go users can access archived messages. ACS just signed with Mimosa to archive 42,000 Exchange mailboxes. Mimosa plans to expand into document and file archiving early next year. InformationWeek profiled Mimosa recently.

Another startup, Teneros, on Nov. 13 introduced a new version of its Velocity archiving and backup appliances for Exchange. The new appliances use virtual machines to extend support to Research In Motion's BlackBerry Enterprise Server and Microsoft's Active Directory. Teneros has increased the number of mailboxes Velocity can handle and beefed up storage capacity. The appliances now support up to 2,000 mailboxes and terabytes of stored e-mail, at costs from $7,000 to $27,000. Teneros was founded in 2003.

MessageOne provides e-mail archiving, continuity, and security as managed services. Its AlertFind service lets employees collaborate using mobile devices and e-mail during a disaster, security incident, or other crisis. In October, MessageOne added an Incident Collaboration Center that supports interactive event logs, document sharing, and task management via a Web portal. Organizations such as the American Red Cross and Blue Cross and Blue Shield of Minnesota have used AlertFind in Hurricane Katrina and, earlier this year, the Minneapolis bridge collapse. MessageOne was founded in 1998 by Adam Dell, Michael's brother. The company relaunched in 2002 with its current focus on e-mail continuity services.

And RPost is about to introduce a "transactional archive," bringing fault-tolerant storage to its message delivery service. RPost's flagship Registered E-mail service authenticates outbound messages by providing the sender with "legally valid evidence" of a message's content, when it was received, and by whom. It's the e-mail equivalent of registered U.S. mail.