The Real Cost of Compliance: Page 2 of 4

The new market for compliance products is potentially huge: AMR Research Inc. estimates companies spent up to $2.3 billion on Sarbanes-Oxley alone last year. Frost & Sullivan says around $270 million was spent on HIPAA compliance in 2002. That’s a lot of fear. Lawyers might not make as much from the corporate scandals.

Compliance is spawning new organizations, too. The IT Compliance Institute was launched to help IT keep up with compliance regs – for a subscription fee, of course (see Help for the Compliance Crazed).

The government is virtually guaranteeing the longevity of the compliance market. One expert says 4,000 new regulations dealing with records management were passed last year alone. That’s just in the U.S.

All these regs delight the storage industry. Vendors especially love the ones mandating that records be kept for 30 years or more. That lets the cheap disk and tape vendors in on the action, as well as the email archive and data retrieval folks.

Compliance casts such a wide net that practically all storage hardware and software can be crammed in. Consider the range of responses by key suppliers: IBM Corp. (NYSE: IBM) announced a compliance initiative last October, placing data archival and management software, hardware, and services into the mix (see IBM Chases Compliance Dollars). EMC came out with a Centera Compliance Edition that added advanced data retention and management tools to its content-addressed storage (CAS) system (see EMC Makes Centera Compliant). Veritas Software Corp. (Nasdaq: VRTS) sponsored a Webcast of experts, including former SEC chairman Arthur Levitt. They’ll tell you it was in the name of education. They wouldn’t mind getting a few sales out of it, though.