16:06 PM

A Policeman Inside Your Computer And Inside Your Corporate Blog - Autonomy Releases Software That Flags Illegal Communications And Other Corporate Content

. . . An end to Enron and other corporate scandals?

Friday I met with Michael Lynch, CEO of Autonomy [AUTN], the second largest European software company with a market capitalization of more than $4 billion.

I wrote about its new software that can identify illegal content in corporate communications such as blogs, emails, any document, and phone recording, and even in video files.

The Autonomy Information Governance (AIG) software makes sure that a corporation complies with huge numbers or regulations, it also monitors any document being created by an employee, including a blog entry, an email, even audio and video. It checks in real-time to see if any laws or company policies are being violated.

AIG also makes it quicker and cheaper to find documents related to a lawsuit.

When a corporation is sued, it often has just 90 days to produce huge quantities of documents, emails, etc, related to the lawsuit. It faces huge fines if it doesn't meet the deadline. The software understands the meaning of documents and can reveal which documents should be reviewed by lawyers.

Companies being sued or investigated, must lock-down all their documents so that they can be searched for evidence. This has to be done even if a company has not been sued or investigated but has a reasonable chance of that happening.

"With 14,000 separate records retention regulations out there and the complexities and costs being incurred just trying to comply with legal hold requests, a company doesn't have the capability to manage this without advanced technology," said Browning Marean, a top lawyer, and partner at DLA Piper US LLP.

Michael_LynchMr Lynch said that technology has made it easier for people to engage in illegal activities and do it on a much larger scale.

"I was on a panel recently and one of the panelists said that the Internet is different and people will behave better. I don't think it will change human nature at all. Human nature hasn't changed in hundreds of years, if you read Shakespeare. And if you look at Roman and Greek times, human nature is pretty much the same thousands of years ago."

"It's seems really arrogant for people to say that in this one generation human nature will be different," Mr Lynch said.

The AIG software also carries out document retention policies, which in the corporate world of double-speak refers to: how soon can we shred or delete this document just in case it comes back to bite us.

Autonomy is trying to bolster its position in the multi-billion dollar e-discovery market, which is lead by Recommind, based in San Francisco. You can read more about the software here.

Foremski's Take:There are some good and bad aspects to this software. The bad is a big brother type use for it. I can imagine the Chinese government using it to monitor Internet use and communications in real-time. You'd get a message pop up: "Report to your local police station immediately - you just committed an illegal act." (The Chinese police sent out text messages to Tibetan demonstrator's cell phones to report to the police.)

It could be used to restrict blogging. A lot of people tell me that large corporations are scared of blogs violating a regulation and so every corporate blog entry has to be run through lawyers-- it has to be "lawyered." This can take time, days, even weeks.

Paradoxically, I think AIG could be used to clear a blog post in real-time and could thus increase the amount of good, legal information that company workers can share in public. Either way, it automates some of the tasks of a lawyer, and that means less need for lawyers, and smaller legal bills for corporations.

Less lawyering, means lower operating costs, which maximize share holder value, and that's what corporate officers are required to do. It's the ultimate SEC regulation.

Please also see: Autonomy CEO says tags don't work

News.com's Charles Cooper: What's interesting is what we say it is. Really?

Last week I attended a briefing by Autonomy, a company based in the United Kingdom and San Francisco. On Monday, Autonomy will announce a product designed to assist companies with governance compliance. This likely will be a big deal for IT administrators and law firms that are scrambling to enact internal information management policies in the wake of the subprime mortgage and credit crisis.

Please see: Mike Lynch on the meaning of meaning based computing.