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New Data-Archiving Rules Impact IT Managers

The Federal Rules of Civil Procedure, which took effect Dec. 1, are forcing IT managers to take a second look at their electronic record-archiving policies. That could increase spending in 2007 for data-storage hardware and document-management applications.
Calling in outside experts to help locate electronic records needed for litigation can cost upward of $50,000 per day. Businesses hope new electronic record archiving systems and policies will help reduce those costs, in addition to complying with the new civil procedure rules.

Some businesses turn to tape backup systems when facing demands for digital documents in civil litigation. But locating specific documents and e-mails on backup tapes that contain huge volumes of information is a tedious and expensive process.

"Backup tapes are meant for disaster recovery, not for finding documents," says Mike Gaines, EAS product marketing director at Zantaz.

And failure rates for reading data on aging tapes runs between 30 percent and 50 percent, says Manish Goal, vice president and general manager of data protection and retention solutions at Network Appliance. Businesses already are moving away from tape to disk for data backup and Goal thinks the new Federal Rules of Civil Procedure will accelerate that trend. He cites one customer, a major construction company, which digitally stores all its construction project designs and records in perpetuity.

But it may be 2008 before solution providers really see a surge in demand fueled by the new civil procedure rules, says Ron Tonts, president of XSM Systems, Vancouver, B.C., which sells e-mail archiving systems based on Network Appliance and Symantec products. (Canadian companies that do business in the U.S. will be subject to the rules.) That's because IT budgets generally lag technology needs by a year, he says.

He has a point. In a July survey of more than 600 IT decision makers for the VARBusiness 2006 Market Insight Mid-Market/Enterprise Report, only 32.1 percent said that addressing data storage utilization and archiving issues was a driver in their IT purchasing decisions.

It will be during 2007 that most businesses discover just how inadequate their electronic record management systems are, Tonts says, when they find themselves facing a lawsuit and can't find the electronic records they need.