451 Research Impact Report on Nuix

451 Research Impact Report: Nuix's information governance spans from endpoint security to investigation, e-discovery

October 11 2016
By Sean Doherty, Analyst, Governance, Compliance, & eDiscovery
Source: 451 Research

Nuix, an e-discovery and information governance (IG) software provider, recently added an endpoint security product called Nuix Insight Adaptive Security (NIAS) to its portfolio. The company plans to expand its security products with the Nuix Insight product line, which emanates from the company's unstructured data-processing engine, the Nuix Engine, like all its other product offerings. Nuix Insight appears to go beyond the company's software portfolio of IG, forensic investigation and e- discovery to focus on endpoint analytics and security intelligence. At base, however, the Nuix Engine is all about IG, which is a starting point for endpoint security and analytics, e-discovery, and investigations.

The 451 Take

The Nuix Insight product line collects and analyzes endpoint data to help prevent and stop cybercrime, fraud and organized crime. The company's focus on specific elements of data and IG that the Nuix Engine supports is a good approach in the IG market, where technology is applied to specific uses cases to help organizations comply with discreet regulatory and litigation requirements. Using a single software engine for multiple data problems or use cases has appeal for organizations in regulated industries, such as banks and financial institutions, and any organization with numerous data requirements, including the imperative to safeguard privacy information – be it financial, health or any personally identifiable information. The Nuix Engine bespeaks information governance in its ability to collect, process, investigate and review electronically stored information (ESI) for compliance, fraud, human resources, e-discovery, cybersecurity, records management, storage remediation and data migration, and many other use cases.

Context

The Sydney-based, privately held company was founded in 2000 by computer scientists who conceived a processing engine for unstructured data: The New Universal Intelligence Exchange (NUIX). The prescient concept today finds exacting application in the largely unrestricted growth of unstructured data. The company first sold Nuix as a commercial product in 2006. Although it has been cash positive since 2008, the company received an undisclosed amount of capital investment from Macquarie Capital Funds in 2011. It recorded 57% growth in 2015, down from 65% growth in 2014. We estimated Nuix's revenue to have been $50-75m in 2014 and $100-120m in 2015. Thirty percent (30%) of the company's revenue comes from litigation support organizations that primarily use the Nuix Engine for e-discovery; 50% comes from corporate licenses, including the Big Four accounting firms (Deloitte, EY, KPMG, PwC), for investigation and e-discovery; and 20% comes from law enforcement, which uses the company's engine for investigations and e-discovery.

The company has three tiers of customers based on the size of their data-processing requirements. The deal price ranges from small (23,000 objects) to midsize (220,000) and large (1.5 million). The average deal price is $130,000.

Nuix claims to have almost 2,000 customers in more than 60 countries served by approximately 400 employees. Comcast, GM, HSBC and Microsoft are recent customer wins. The company has an extensive global network of advisory, service, and technology partners and resellers. At the company's User Exchange 2016 in Huntington Beach, California, partners such as Altep, Deutsche Bank, DTI Global, KPMG, Kroll Ontrack, Lighthouse Technologies, McCarter & English, Teradata, Vigilant Systems and Voci Technologies were out in force, showing the many ways the Nuix Engine can be used for data and IG in anti- fraud and anti-money-laundering, investigations, and e-discovery.

Nuix maintains its identity as a software developer, providing its engine to technology and OEM partners, and attests that it will not compete with its partners. The company has no immediate plans for an IPO, and is primarily focused on bringing its Insight security and intelligence products to markets. It has  six beta customers on NIAS.

Products

The Nuix 7 Engine manifests in software offerings for e-discovery, investigation, IG, analytics and security. Previous reports cover features and offerings from Nuix 5.2 (https://451research.com/report-short?entityId=82110) and 6.2 (https://451research.com/report-short?entityId=85319), including eDiscovery, Investigator, Director and Web Review & Analytics.

With Nuix 7, the company forays into endpoint analytics and security with Nuix Insight: NIAS and Nuix Insight Analytics and Intelligence. The product line integrates cybersecurity threat prevention, detection and response in an endpoint agent sporting numerous technologies, such as a Digital Behavior Recorder (DBR) that continuously monitors and records endpoint activity, a logic engine to automatically respond to threats, and custom actions to apply whitelists, blacklists, application controls and behavioral blocking to known threats. Insight products support multiple use cases, including incident response, malware reverse engineering, penetration testing, insider threats, and adaptive security. New features to identify insider trading and money laundering are said to be coming soon.

The Sensitive Data Finder (SDF) is a new IG product offering. SDF identifies information risks and assets in ESI and applies the company's search strategies – proximity searches, named entities and optical character recognition – across computers, email systems, file shares, cloud-based services, databases, and other enterprise storage systems to locate, index and analyze sensitive information. Searches can be saved and reused to help organizations comply with privacy laws like HIPAA and industry standards such as the Payment Card Industry's Data Security Standard. It can also be deployed to identify and manage contracts.

Also new since our last reports is Nuix Voice, which integrates Voci's V-Discovery speech analytics platform with the Nuix Engine and Nuix's products for cybersecurity, e-discovery, investigations and IG. Voci uses advanced machine-learning technology from Carnegie Mellon University research to convert electronically recorded audio data to text in punctuated transcripts in English or Spanish. Voci claims a single appliance deployment of its voice-processing engine can process more than 100 hours of audio per hour. V-Discovery performs a full-spectrum analysis of speech content with acoustic measurements of participant gender and emotion.

Nuix Investigation and Response is Nuix's core investigative product. It uses Nuix's digital forensics software to process, analyze, and review potential evidence in data sets gathered from mobile devices, multiple computers and other digital storage media. The Investigation and Response product adds visual analytics and cybersecurity incident-response features to Nuix Investigator Workstation, the company's previous investigative product.

Technology

The Nuix Engine is simply described as data-processing technology for normalizing data. It turns unstructured, structured and semi-structured data formats into searchable text and metadata for multiple use cases. The parallel processing engine is fault- tolerant and supports load balancing. It can work in multiple processes on a single server or across multiple computers via Nuix processing nodes called workers. Workers are deployed on Windows, Mac OS, and Linux computers or virtual machines, and are managed from a central console.

The Nuix Engine processes, indexes and analyzes data at a binary level, and contextualizes the data to provide customers with insight and stories into hidden data to solve knotty problems in complying with laws and regulations and solving investigations. The engine can open and index more than 700 file types, use machine-learning (Bayesian Classification) techniques, and apply text and visual analytics to analyze data and find relationships.

Besides the company's Lucene-Derby database back end, Nuix 7 offers an Elastic option to consolidate processing information into a single Elasticsearch index. With Elasticsearch, customers can concurrently search, tag and export data while processing ensues.

Nuix 7 features a redesigned 'Context' user interface to visualize hidden relationships in data. The new version uses the OrientDB graph database to identify relations among people, events, locations and objects. The Context UI is available in other product offerings: Investigator Workstation, eDiscovery Workstation and Investigator Lab.

Competition

In the processing arena, Nuix mostly sees Ipro Tech and LexisNexis LAW PreDiscovery. Other processing engines, such as Catalyst Repository Systems, CS DISCO, Exterro, Planet Data, Mindseye and Zapproved also compete. In forensic collections, AccessData and Guidance Software are prominent competitors. For web review and analytics and legal hold offerings, Nuix, like other e-discovery software makers, faces off against kCura Relativity. Other e-discovery vendors also supply review and legal hold, such as Exterro, Guidance Software and Zapproved. In the IG sector, Nuix competes with Exterro, IBM, OpenText, RSD, Veritas Technologies and ZyLAB. With its new initiative in endpoint analytics, the company is likely to run into Palantir Technologies.

SWOT Analysis

Strengths

Nuix is an experienced and storied software developer with a long history in partner-focused deployments. The company's view of unstructured data problems from its processing engine provides its software with as many use cases as there are identified risks in unstructured data.

Weaknesses

The company's focus on software, not services, leaves a lot on the table for customers using the Nuix Engine for IG  and e-discovery that more often than not requires software with services to engage complex litigation and compliance projects.

Opportunities

The numerous use cases for the Nuix Engine give it multiple points of entry into organizations with unstructured data problems, including compliance units, human resources, information technology, legal departments and any organizational units embarking on compliance projects that require the analysis of unstructured data.

Threats

As the company branches out from data processing, it meets new, long-established competitors, such as Palantir in analytics and McAfee in endpoint security, that will tax and distract its development resources.

 

M&A ACTIVITY BY SECTOR
Information management / Data management / Other (27) (https://makb.the451group.com/results?basic_selected_sectors=731)
Information management / Info retrieval / E-discovery (51) (https://makb.the451group.com/results?basic_selected_sectors=780)
Security / Endpoint integrity assurance (15) (https://makb.the451group.com/results?basic_selected_sectors=410)

M&A ACTIVITY BY ACQUIRER
Deloitte Consulting LLP [Deloitte LLP] (4) (https://makb.the451group.com/results?basic_acquirers=Deloitte+Consulting LLP [Deloitte LLP])
Ernst & Young Global Ltd. [aka EY] (7) (https://makb.the451group.com/results?basic_acquirers=Ernst+& Young Global Ltd. [aka EY])
General Motors Corp. (2) (https://makb.the451group.com/results?basic_acquirers=General+Motors Corp.)
Guidance Software, Inc. (2) (https://makb.the451group.com/results?basic_acquirers=Guidance+Software, Inc.)
IBM Corporation (164) (https://makb.the451group.com/results?basic_acquirers=IBM+Corporation)
kCura LLC (1) (https://makb.the451group.com/results?basic_acquirers=kCura+LLC)
LexisNexis [Reed Elsevier] (24) (https://makb.the451group.com/results?basic_acquirers=LexisNexis+[Reed Elsevier])
Lighthouse Communications Inc. (1) (https://makb.the451group.com/results?basic_acquirers=Lighthouse+Communications Inc.)
McAfee Inc [fka Network Associates] (22) (https://makb.the451group.com/results?basic_acquirers=McAfee+Inc [fka Network Associates])
Microsoft Corporation (157) (https://makb.the451group.com/results?basic_acquirers=Microsoft+Corporation)
NBC Universal [Comcast] (9) (https://makb.the451group.com/results?basic_acquirers=NBC+Universal [Comcast])
OpenText Corporation [aka Open Text] (35) (https://makb.the451group.com/results?basic_acquirers=OpenText+Corporation [aka Open Text])
Palantir Technologies Inc. (5) (https://makb.the451group.com/results?basic_acquirers=Palantir+Technologies Inc.)
PricewaterhouseCoopers International Limited [dba PwC] (17) (https://makb.the451group.com/results?basic_acquirers=PricewaterhouseCoopers+International Limited [dba PwC])
Teradata (16) (https://makb.the451group.com/results?basic_acquirers=Teradata)

Figures shown indicate number of transactions

COMPANY MENTIONS (PRIMARY)
Nuix (https://451research.com/search?company=Nuix)

COMPANY  MENTIONS (OTHER)
AccessData Group, Altep, Carnegie Mellon University, Catalyst Repository Systems, Comcast, CS DISCO, Deloitte, Deutsche Bank, DTI, Elastic, EY, Exterro, General Motors, Guidance Software, HSBC Group, IBM, Ipro Tech, kCura, KPMG, Kroll Ontrack, LexisNexis, Lighthouse, Lucene, Macquarie Capital Advisors, Intel Security, McCarter & English, Microsoft, Mindseye Solutions, OpenText, Orient Technologies, Palantir Technologies, Planet Data, PricewaterhouseCoopers, RSD, Teradata, Veritas, Vigilant, Visual Analytics, Voci Technologies, Zapproved, ZyLAB (https://451research.com/search?company=ZyLAB)

CHANNELS
Business Applications, Data Platforms & Analytics, Information Security (https://451research.com/dashboard?view=channel&channel=5)

SECTORS
All / Information management / Info retrieval / E-discovery (https://451research.com/search?sector=780) All / Information management / Data management / Other (https://451research.com/search?sector=731) All / Security / Endpoint integrity assurance (https://451research.com/search?sector=410)

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