Hosted archiving does not require any on-premises hardware or software, and enables the IT department to focus on other projects without worrying about email retention and long term storage.

Cloud-powered archiving does not penalize a simple straightforward “keep it all” plan. This means IT decision makers can implement retention archiving now, and create policies later. It’s a Win-Win scenario for IT and businesses, and is the cure to “policy paralysis.”

These new capabilities mean there are growing “shards of content” data silos in the enterprise that need to be captured and archived for compliance, e-discovery, storage management and universal information governance best practices.

Sonian believes the best most cost-effective and reliable way to solve this problem is a centralized archiving service, powered by cloud-scale infrastructure as a service. Here’s why:

• Installed archiving software never has enough compute power for large searches or deep analytics. The cloud offers CPU on demand to power through terabytes of content.
• Installed archiving software consumes a lot of your expensive SAN and backup/DR storage. The cloud as your long-term storage locker with integrated search and analytics is configured as a virtual extension of your own network. A double Win-Win combination: less cost and just as secure.
• Installed archiving software can’t help you gain valuable data insights to manage “top-line-growth” issues from better business intelligence and value that can be extracted from all content silos across the organization.

It’s this evolution of communication habits and preferences that is exciting to watch and be part of. Whether it’s an email or a tweet, it still content that is created by a person and shared. Sometimes its personal, sometimes its business. And in a corporate setting that content needs to be preserved for a variety of reasons: compliance, posterity, storage management and best business practices. That’s where Sonian lives. Preserving this content as your “trusted digital caretaker.”

Sonian is at the nexus of three waves of change: Rising interest in cloud computing, increasing demand for software as a service, and a mandate to get the best return on IT budget investment.

SEC 17A-4 and NASD 3010

The Securities Exchange Commission (SEC) originally enacted the Securities Exchange Act in 1934, as a means of protecting investors from fraudulent or misleading claims by securities dealers. The Act required member firms to create and maintain transaction records which could be reviewed and audited. In 1997, rule 17a-4 of the Act was amended to provide procedures for storage of electronic records, including emails.

This rule has since been interpreted to include instant messages as well. NASD (National Association of Securities Dealers) applies similar  rules to its member firms through NASD 3010. The provisions of SEC 17a-4 and NASD 3010 apply to all individuals  and organizations involved in trading securities. This includes securities firms, stock brokerage firms, banks and any  financial institutions that fall under SEC or NASD jurisdiction. They require securities dealers to implement specific,  enforceable retention procedures, which include the following:

• Archived messages must be stored in duplicate. One copy must be stored in an online archive, and a second copy  must be stored offline on permanent, tamperproof media, such as Write-Once-Read-Many (WORM) technology.

• Storage media must be verified automatically for quality and accuracy.

• Archived messages must be date/time-stamped and serialized. Each message must be assigned a unique,  sequential identification number as a safeguard against deletion.

• A searchable index of all stored data must be maintained. Indexes must be retained on each unit of storage media  for the messages and attachments stored on that unit.

• Messages and indexes must be easily retrievable and downloadable to other media as required by SEC regulators.

SEC Investment Advisers Act of 1940

The U.S. Securities and Exchange Commission (SEC) has recently imposed new regulations on private investment pools,  also known as hedge funds. The U.S. Securities and Exchange Commission, in a three-to-two vote on Oct. 26, 2005  decided to require hedge fund managers with assets in excess of $25 million to register under the Investment Advisors Act  of 1940. The regulation went into effect on Feb. 1, 2006.The ruling requires that most hedge fund advisers register with the  SEC under the Investment Advisers Act of 1940, which includes provisions for securing, managing and archiving all
electronic communication, including email and instant messages.

• Archived messages must be stored in duplicate. One copy must be stored in an online archive, and a second copy must  be stored offline on permanent, tamper-proof media, such as Write-Once-Read-Many (WORM) technology.

• Storage media must be verified automatically for quality and accuracy.

• Archived messages must be date/time-stamped and serialized. Each message must be assigned a unique, sequential  identification number as a safeguard against deletion.

• A searchable index of all stored data must be maintained. Indexes must be retained on each unit of storage media for the messages and attachments stored on that unit.

Messages and indexes must be easily retrievable and downloadable to other media as required by SEC regulators.

Sarbanes-Oxley (SOX)

The Sarbanes-Oxley Act of 2002 was enacted in the wake of several major corporate and accounting scandals. Its  provisions affect email retention, integrity and oversight. Sarbanes-Oxley applies to all publicly traded companies and the CPA’s and attorneys associated with these companies.

• Section 802 presents a possible fine of up to $1,000,000 dollars or a prison sentence of up to 20 years for any person who  destroys, alters, mutilates or conceals any electronic document in an official investigation.

• Sarbanes-Oxley specifies minimum retention periods for all accounting records, work papers, communications, file  attachments, and documents whether transmitted via email, instant messaging or other message modes.

• Section 302 requires CFO’s and CEO’s to personally certify and be accountable for their firms record retention policies and financial reports.

• Section 404 requires auditors to certify the underlying controls and processes that are used to compile the financial results of a company. Email is a critical component in being able to achieve this certification.

• Section 103(a) and 801(a) require companies to maintain all documents including electronic documents that form the basis of an audit or review for seven years.

The benefits of centralized archiving with authenticated and audited access are better than the open holes caused by allowing PST files to live on local drives and thus vulnerable to loss and “data leakage.”

For companies with less than 15,000 employees hosted had significant savings compared to installed software solutions.

But an even more interesting finding is that more than half of enterprises will blend hosted email services with on-premise email servers. Hosted security and email archiving services are the perfect compliment to an Exchange, GroupWise or Notes server.

First, the market for archiving will expand from $600 million today to $1.5 billion by 2011. This is seen in pie chart top left, and is predicted by Osterman Research.

Second, 60% of this growth will occur in the small to medium enterprise segment, with more than 70% choosing a hosted service instead of on premise software. The second and third pies indicate this trend.

Sonian’s hosted email archiving service will get a big percentage of the archiving pie.

This is your backup, maintained in the event you need to recover a file or an entire server. Backups are tape libraries or backup to disk infrastructures. They are not designed for investigative search or analysis.

Archive and backup are cousins to each other, with archive providing the search, e-discovery and work flow capabilities that backup systems do not. Maybe some day in the future combined systems will solve both problems, but the state of the art today is separate systems, with backup maintained on premise, and archive hosted on cloud compute infrastructure.

Local backup and hosted archive is the “win win” scenario IT needs to save money, provide actionable intelligence, and solve the dual needs of search and data recovery.

This is the role of an enterprise archiving system, designed to store the huge volume of information generated in the email systems each year. IT decision makers should look at the new generation of hosted archiving services, especially cloud-powered SaaS services that solve the archiving problem more securely and cost effectively than legacy hosted infrastructures.