International Data Corp. said email archiving software revenue in 2004 topped $180 million worldwide, up from just $33 million two years ago. IDC projects it will continue to grow at a compound annual growth rate of over 50 percent through 2008.

The Sarbanes-Oxley Act -- and more specifically SEC Rule 17a-4 -- requires email retention.  "The introduction of legislation such as the Sarbanes-Oxley Act of 2002 and the Health Insurance Portability and Accountability Act [HIPAA] has significantly increased the importance of managing, securing and storing all information within the enterprise," the report stated. "More specifically, because of regulations such as SEC Rule 17a-4 that are very prescriptive for the retention for email, and the numerous and very costly public lawsuits in which an email has been the deciding factor, email has emerged as one of the most important content types that need to be retained."

According to Julie Rahal Marobella, senior research analyst, Information Management for Compliance at IDC, organizations have a much greater obligation than before to ensure that their email is retained in its original state without being altered, viewed, or deleted by unauthorized people. As a result, email archiving has emerged as a crucial piece of a comprehensive, sustainable strategy for corporate compliance, corporate governance, and risk management.

Mergers and acquisitions involving email archiving, storage software, and content management vendors are transforming the landscape of this emerging market. Vendors must find the most appealing and efficient way to address both urgent near-term and important long-term customer needs for automating the increasingly important business process of archiving content in internal and external email communications.

"The need to know what information your firm has and where you can store and find that information in an efficient manner is driving the surge in demand for email archiving applications. Whether it is delivered as dedicated solutions or as embedded functionality, email archiving will most likely be appearing in a datacenter near you," said Mark Levitt, research vice president, Collaborative Computing at IDC.