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Smarsh CEO Stephen Marsh in the company's Portland data center, where it stores clients e-mails and other electronic communication behind several layers of security.
(Allison Milligan/The Oregonian)
Companies used to wish away their old correspondence. Old letters were a legal liability, the thinking went, and ought to be destroyed.
has built one of Portland's fastest-growing tech businesses by taking the opposite approach, contending that in the information age nothing is ever really gone. So you might as well hold onto it, and put it somewhere easy to find should you ever need it.
"What most have found out over time is you can't eliminate this information from existence," said founder and chief executive Stephen Marsh. The material still exists, he maintains, be it a backup hard drive somewhere, a recipient's inbox, or lurking somewhere in the cloud.
"Eventually," Marsh said, "most of these organizations and their attorneys realize it's better to know what exists at an early stage in the legal process rather than be surprised by it later on."
Founded in 2001, Smarsh emerged amid a swirl of accounting and business scandals that demolished big corporations such as Enron and its accounting firm Arthur Andersen.
Dell ended up with a majority stake in Smarsh through a series of unrelated transactions.
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Subsequent legislation required that many businesses -- banks and financial services firms, especially -- hold on to their old records in case they're needed for future investigations.
The rush to retain all that information helped build Smarsh, and similar businesses within larger companies including Hewlett-Packard and Symantec.
After starting in New York, Smarsh moved to San Francisco and then to Portland, when Marsh's wife took a job at Nike. It sold a majority stake to Quest Software in 2011, which Dell acquired last year, assuming majority ownership of Smarsh. (
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Today, Marsh said, electronic archiving has proliferated beyond tightly regulated industries and into other types of organizations, including health care, education and government agencies.
And archiving has expanded beyond email to include instant messages, social networks and internal corporate communications systems, such as Microsoft's Yammer and Salesforce.com's Chatter.
Smarsh adapted its technology to capture that correspondence, too, and last year bought the web-archiving startup Perpetually to archive websites.
Revenue, growing on multiple fronts, ballooned from $8.1 million in 2008 to $27 million last year. And Smarsh said it expects that pace to continue.
Founded
: 2001, in Brooklyn. Moved to San Francisco in 2002, and then to Portland in 2004.
Business
: Archives email and other electronic records for regulatory compliance and to prepare for possible litigation.
Headquarters
: The Pittock Block in downtown Portland.
Ownership
: Quest Software acquired 60 percent of Smarsh in 2011; Dell bought Quest last year.
Employees
: 170, including about 100 in Portland.
Revenue
: $27 million in 2012, up from $20 million the prior year.
"They certainly understand their financial services customer very well," said Sheila Childs, a managing vice president at the research firm Gartner, who co-authored a report last year on information archiving vendors. She rates Smarsh a strong performer in a competitive, but rapidly growing, market, alongside big players such as Bloomberg and such specialists as Global Relay.
"These guys have proven themselves in this market. They have a large number of customers," Childs said, "a large number of happy customers."
Smarsh fills a niche in financial services, she said, but its clients are generally smaller. Competing against well-known brands such as Symantec, Childs said, Smarsh will have a challenge to lure bigger clients that could help the Portland company maintain its growth rate.
Smarsh is starting to land bigger clients, according to Marsh, who had done their own archiving but have discovered it's both cheaper and more productive to outsource it to companies like Smarsh, which specialize in archiving and offer additional services.
"It's not really the small firms that are now signing up with us," he said. "It's the large firms."
In the meantime, Smarsh is coming up with new ideas for its clients' data, locked down in a tightly monitored data center on the sixth floor of its downtown Portland office.
Most of that information sits idle, of course, never summoned to testify in legal proceedings and essentially ignored. But as companies archive more and more of their history, Marsh said, they could mine that data for clues to employee behavior, business trends and to look for patterns of suspicious behavior.
"We're just now starting to get into some areas that will allow us to deliver value back to the customers out of all that information," he said.
Smarsh isn't the only company thinking that way, according to Childs, the Gartner researcher. "Big data" is a big opportunity for archivists, she said, provided they find the right service. And everyone, including Smarsh, is searching around for the right model.
"We haven't seen any archiving vendors become really creative yet," Childs said. "They all talk about it. I really see it as the next wave."
-- Mike Rogoway; twitter: @rogoway; phone: 503-294-7699