Why Exterro Acquired a Silicon Valley Deep Tech Firm: To Uncover the Data Risks You Didn’t Know About
I’m really happy to be coming to you with more exciting news. Today we announced the acquisition of Divebell, the company behind the best-in-class data discovery software solution of the same name. We’ve had a long-standing relationship with Divebell. After all, their technology powers Exterro Data Discovery, our solution to help organizations come to grips with all their data and impose controls on it.
Without a doubt, several major trends are converging in such a way that organizations and their leadership–from the GC and CLO to CISOs, CPOs, and CIOs–have to have a firm grasp on the data they hold. We’re not alone in seeing this happen. Legal leadership at world-class organizations, as cited in the 2023 ACC Chief Legal Officers Survey, are seeing their responsibilities grow to encompass topics like cybersecurity, privacy, regulatory compliance, and more. Because Exterro helps our clients manage massive amounts of data, we are uniquely positioned to recognize how incredibly timely and critical this technology can be to our current and prospective customers. The time to act is now–and we are lucky to have not only the best data discovery solution in the market, but also a far-reaching legal governance, risk, and compliance management platform to leverage the insight it delivers.
Data Discovery is not a niche technology. Its uses span the gamut from e-discovery to privacy compliance, digital forensics, data compliance, and data breach cybersecurity incident response. Do you need to identify where data is for litigation? What data is under litigation hold and what is not? Where data has cross-border obligations, either for discovery or privacy compliance? Do you need to dispose of redundant, obsolete, or trivial data that might pose extra risk for discovery or breach? Do you have to conduct investigations into potential fraud or misuse of company resources, human resources violations, or other policy compliance issues? What about performing due diligence for mergers or acquisitions?
You can lay the foundation for all of these business operations–and countless other ones the smart people using our software will figure out–with the deep insight into data this software provides.
Privacy Obligations on the Rise
Thirteen states have passed privacy laws, six of them in 2023 alone, and more are making their way through state legislatures today. Federal regulators like the FTC are enforcing existing standards more strenuously. International regulations like GDPR, DPDPA, and PIPL govern an increasing proportion of the world’s population–Gartner predicts 75%--by the end of the year. Those individuals all have rights to access, correct, delete, and possess copies of their data.
Wouldn’t compliance with these complex regulations be easier if you knew everywhere your organization stored personal data and was able to link it to applicable regulations? I think–and hope–so, because fines for violations imposed both domestically and internationally routinely reach eight- and nine-figure sums.
Cybersecurity Threats Aren’t Going Away
Do we even need to talk about this at this point? Data breaches are so common, they are more a question of “when” than “if” for most organizations. Targeting law firms, healthcare service providers, telecoms, and more, bad actors recognize the value in the massive stores of data organizations have. And the costs of data breaches just keep rising. IBM’s respected The Cost of a Data Breach Report for 2023 pegs the average cost at $4.45 million. The costs rise for organizations with complex data structures and the inability to detect breaches and respond quickly, topping out at over $330 million for mega-breaches of more than 50 - 60 million records!
What does data discovery do to protect against breaches? It allows organizations to harden defenses around personal data. It allows them to identify who has access to sensitive data and ensure that it’s not available to unauthorized users. It allows organizations to impose retention policies, delete unneeded data wherever it exists, and reduce the scope of data at risk. And then, in the unfortunate event of a breach, it powers timely notification of authorities and data subjects before tight compliance deadlines.
Civil Litigation Challenges Remain
Legal disputes aren’t going away either. Norton Rose Fulbright estimates that organizations spend $1.7 million for every $1 billion of revenue on resolving them. Organizations face risks of sanctions and adverse judgments for failure to preserve data in applications like Discord, Google Chat, KakaoTalk, Microsoft Teams, and Slack–not to mention countless other social media, communication, and collaboration platforms. The proliferation of data sources doesn’t just apply to civil litigation, but the pain points are more often felt there than in other challenges. The courts have made it clear that organizations have an obligation to preserve relevant data in all of these data sources–but how can a legal team hope to be able to do that without an up-to-date, comprehensive accounting of all the data sources–on-premises and in the cloud, structured and unstructured–that an organization uses?
Data Discovery Is the Answer
The fact of the matter is that no person, or even team, can successfully maintain an accurate, up-to-date, comprehensive data inventory for a modern enterprise without advanced technology like Exterro Data Discovery, working in a closely integrated platform with trusted, operational Data Inventory and Data Retention solutions. There is too much data, stored in too many platforms, spanning traditional on-premises infrastructure and private, public, and hybrid cloud locations. Companies and even departments add and remove new communications and storage platforms routinely–and it’s not likely they’re taking the time to inform legal, privacy, compliance, risk management, and cybersecurity every time they do so. But if there’s a problem, those departments and their leaders will have to find the solution.
No one knows this better than Exterro. No company in our space helps more large organizations preserve, manage and analyze their data than we do. With our In-Place Preservation, In-Place Analysis and broad collection capabilities, we help our clients manage Exabytes of data every day. It is fairly routine for Exterro clients to manage thousands and in many cases millions of custodian data sources. As more and more data and data sources are added every day, the burden on CIOs, CISOs, CPOs and Chief Legal officers grows, due to heightened levels of governance and compliance risk that Exterro is uniquely qualified to address.
Exterro Data Discovery is a game-changer, bar none. Simply put, it is the fastest way to find, identify, and classify personally identifiable information (PII) and sensitive data, determine compliance with policies and regulations, and calculate data risks across complex, enterprise data landscapes. It is:
Comprehensive: No matter where your data is or what format it is in, Data Discovery can find it. On-premises or in the cloud, structured or unstructured–it doesn’t matter.
Intelligent: It’s pre-trained to find PII of all types–but you can provide additional training to the AI to achieve even better and faster results.
Automated: It finds PII and sensitive data automatically and continuously updates your data map so you know what data you have, where it is, and who has access to it.
Secure: Data Discovery doesn’t copy or move data from where it lives, so you can identify and remediate risks, not create new ones.
Actionable: Detect data in violation with policies with Data Discovery, then remediate risks with Exterro Data Retention, Exterro FTK(r) Enterprise, or whatever appropriate tool you have!
Fast: Statistical sampling of data results in scan speeds that blow away the competition, turning a task that took months into one that takes hours or minutes.
Easy to Use: Intuitive, interactive dashboards give you a bird’s eye view of compliance or security risks, then drill down to specifics so you can take decisive action to fix them.
Where Exterro’s Going with Data Discovery
I’m always proud when Exterro makes a bold strategic move like this one. Just over five years ago, we got a huge vote of confidence with a strategic investment from Leeds Equity partners. Since then, I’ve come to you four times to announce the acquisition of a company that contributes to our goal–namely, creating the industry’s most comprehensive Legal and Data Governance, Risk, and Compliance software platform. Our technology gives key players like GCs, CLOs, CISOs, CPOs, and CIOs–and their teams–the deep insight into their organization’s data they need to mitigate the risks associated with things like data breaches, civil litigation, cybersecurity threats, and increasingly complex privacy regulatory regimes.
This time feels different. Our past acquisitions of Jordan Lawrence and AccessData broadened our platform, moving from e-discovery into the adjacent, intimately connected fields of privacy compliance, digital forensics, and cybersecurity incident response. Our acquisition of Zapproved earlier this year helped us empower our customers to achieve even greater results with our Legal Governance, Risk, and Compliance software suite.
While Divebell is a smaller company than those, its technology is transformative–and it’s at the heart of everything Exterro aspires to do. How can an organization meet its obligations to customers, regulators, investors, and the legal system without an accurate, up-to-date understanding of the data it holds? Simply put–it can’t.
While we’ve been able to offer this amazing software to customers through a partnership with Divebell, bringing them into the fold unlocks profound synergies across the entire Exterro technology platform. With this acquisition, we are on the cusp of a revolution in how organizations identify, understand and use their structured and unstructured data for e-discovery, enterprise digital forensics, data privacy compliance, data governance, data security and breach response, as well as emerging AI-related challenges such as AI-related legislation and governance. It’s going to supercharge innovation and the incorporation of automated data discovery technology into the broader Exterro platform.
Whether you’re a customer today or become one in the future, you can reap the benefits of this technology with the repeatable, efficient, defensible legal data management processes it empowers. This is truly an exciting time for Exterro, our customers, and our partners–and I’m thrilled to be able to announce it.