October 23, 2017

Aaref Hilaly: Thanks for the Insight!

On August 11th Aaref Hilaly posted his critique of AccessData’s acquisition of Summation. As CEO of AccessData I must admit I was amazed that the CEO of Clearwell would be as aggressive as he was in that article. To be honest I was amazed he wrote anything at all. That said, I didn’t want to reply at the time because we had just finished the acquisition and while Aaref was clearly comfortable making assertions with no information on the subject at all, I wanted to take a few months and actually gather facts before I responded. We are now 4 months in to the acquisition, and I think it’s time to respond. So to be as organized as I can in my response I will go through his article and address each point in turn.

‘Everybody Dislikes Summation’

Summation's Renewal Rate is 90%

First, Aaref begins his post with a fairly direct attack. Specifically he says: “When I first started working in the electronic discovery industry, I quickly learned two things about Summation: it has a huge installed base of law firm customers, and they all dislike using Summation’s products.” In response to this, I would like to point out two facts:

  1. The people willing to talk to Aaref about his products are people in the market for a new solution, just as anybody willing to talk to me is in the market for a new solution. While I hate anyone to move away from Summation products, the fact is it does happen, and those people are the ones likely to spend time with other vendors, such as Clearwell. As a result, it doesn’t surprise me that Aaref thinks “they all dislike using Summation’s products.” For what it’s worth Aaref, in the many cases in which AccessData swapped out Clearwell this year, those customers all said they disliked your product, as well. In particular, they dislike the fact that when they face any meaningful legal issues their bills go through the roof, because you charge per gig. I am not going to make a blanket statement that everyone dislikes Clearwell, but I will say the ones who stopped paying you and bought our product surely do.
  2. I would further submit to the objective audience that Summation’s renewal rate is over 90% and has actually ticked even higher in the last few months. I would put that renewal rate up against any company in the space. It is hard to substantiate the statement everyone “dislikes using summation’s products” given the huge following and this strong renewal rate.

24-year Track Record of Innovation

“No Innovation”

Aaref’s next substantial point is that “There has been no innovation from Summation for years; its products are difficult to use; and, they don’t integrate with each other.” This isn’t exactly news to anyone. Summation has not innovated, and that lack of innovation clearly created the opportunity for companies, such as Clearwell, to charge outrageous rates for delivering a relatively small value proposition. Despite the fact that Summation prior to the merger lacked innovation, AccessData has a 24-year track record of recognized innovation and has seen extraordinary growth in the last three years as a result.

There is no doubt we have our work cut out for us, but I believe our team is second to none and is up to this task. We have already reached out to a large number of our customers to discuss our roadmap, and we are aggressively executing against a plan to radically improve the entire Summation line of products.

Questioning AccessData’s Abilities and Standing in the Marketplace

Next Aaref fundamentally questions the ability of our team, with his typical bravado: “On the face of it, you would not expect AccessData to be capable of addressing Summation’s problems. As the #2 player in the forensics market to Guidance Software, it has no experience in legal review.”

So first off I don’t think Aaref knows nearly enough about AccessData to comment on what we will or won’t be able to achieve. He obviously doesn’t have access to our numbers or customer base, because we have long since surpassed Guidance Software in the forensics market, and we have been working with litigation support customers since before Clearwell was incorporated.

That said, while I am extremely confident in our team, whether we will be successful in the Summation market is unknown. However, our sales have turned up significantly in the fourth quarter, and if this trend continues we will be on pace to show significant growth in 2011. To do that, we need to keep our heads down and execute hard against our development schedule, but we have done that in the past, and I am confident we can do it again.

Attacking AccessData’s Goals

terminated virtually no one...

At this point in the article Aaref stops bashing AccessData and Summation as we existed at that time and instead decides to bash our goals. He breaks down these attacks into four categories:

  • “Claim ‘end-to-end’ in the enterprise market:” Yes Aaref, you are correct. We plan on claiming end-to-end, but not in the half-baked way you think. We aren’t going to just “bundle the iBlaze review platform with our own forensic collection products (FTK).” We are actually integrating the two product suites with a common backend and a seamless UI. (By the way, the product is actually AccessData eDiscovery, not FTK. You should at least know which of your competitor’s products you’re trying to sell against.) To be clear you advocate a “solution” that requires first using a litigation hold tool, such as PSS Atlas, then a collection tool like EnCase, then your tool, then a review tool, such as Relativity. Why, Aaref, is that a better workflow than a single product that does it all very well? Your solution requires three indexes and cost millions more. How does that make sense? AccessData has been innovating for 24 years and has been a leader in collection, processing, analysis, reporting and export of data for a decade. Summation is still a best-of-breed legal review solution. So how is integrating these two technologies to deliver a single solution a bad idea?
  • “Promote CaseVault and CaseVantage in the law firm market:” Yes we plan to push the Web-based CaseVantage technology and our litigation services more aggressively after we have finished a refresh on them. However, to address your assertion in this section of your article, I am not sure why you think “most providers today seem pretty happy with Clearwell”. The ones we meet, as I have said previously, seem very upset with you and your technology. It doesn’t surprise me you see things differently. What surprises me is how confidently you advance your opinion as fact.
  • “Cut costs:” Aaref out does himself in this section. Specifically he says “On the day the acquisition closed last month, AccessData fired most of Summation’s engineers.” I don’t know where Aaref gets his information, but we terminated virtually no one who was actually coding, none of the technical support staff, and none of the field engineers. Not only that, but over the past 4 months, we have hired well over 40 developers/QA onto that team, and we continue to hire.
  • “Sunset iBlaze product lines:” We have zero plans to sunset anything. We will work on converging and enhancing many of the products, but we will not sunset iBlaze, and we don’t believe it has fallen way behind.

To end his article Aaref postulates again our demise “there will be some using Summation’s products for document review. But there are fewer and fewer every day.” Well Aaref, I am really sorry to rain on your parade of misinformation, but we have already seen a significant increase in sales, and if we can execute on the development, I expect that to accelerate. After all, there are a ton of customers sick of paying vendors per gig fees, particularly when those vendors actually add little value to the customers’ overall eDiscovery process – even complicate the eDiscovery process. So thanks for the insight and best of luck to you.

Tim Leehealey

Tim Leehealey is Chairman and CEO of AccessData. Prior to joining AccessData he was VP of Corporate Development at Guidance Software. Prior to that he was an investment banking analyst covering the security market at Wedbush Morgan.

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