Seagate Acquires E-Discovery Vendor MetaLINCS

Last week, storage manufacturer Seagate announced it will purchase MetaLINCS. MetaLINCS makes e-discovery software that's used to digest and analyze a large corpus of email documents used in litigation. MetaLINCS will form part of Seagate Services, a new division that provides compliance, disaster recovery, and business continuity technology.

This is in the tradition of storage firms buying software that relates to their business. Another example is EMC's acquisition of email archiving vendor Legato. Seagate is a leader in the storage market, with around $12 billion annual revenues. This is a relatively mature market, with much price competition.

We see the main benefits for Seagate as:

  • Helps build Seagate Services -- a synergistic business with good growth and margin potential.
  • MetaLINCS has good visibility in the legal world. Seagate Services can leverage this marketing presence.
  • MetaLINCS people have good e-discovery skills, business and technical.

We see the main benefits for MetaLINCS as:

  • It now has much deeper pockets and the ability to weather market vicissitudes. This is important for MetaLINCS management and customers alike.
  • Cash. MetaLINCS, by itself, would have needed substantial additional capital. In October, the company was anticipating a new, Series B, round of $10 million to $12 million.
  • Access to Seagate Services' sales force and channel.

... David Ferris

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