CIO — Eliot Spitzer loves e-mail. The lawsuits filed by New York's crusading attorney general against brokerages, mutual fund companies and most recently the insurance industry have all depended on incriminating evidence in the companies' own electronic communications. But while these and other notable cases in which e-mails played a key role have gotten the headlines, they are just symptoms of something grander.

E-mail's usage and scope is exploding. IDC (a sister company to CIO's publisher) forecasts that the average number of e-mails sent each day worldwide will hit 36.2 billion in 2006, and Gartner predicts the volume of business e-mail will grow 25 percent to 30 percent a year through 2009. (Gartner's figures exclude spam, which currently accounts for around three-fourths of inbound e-mail.) This growth reflects an important shift in how e-mail is employed. The Enterprise Strategy Group (ESG) reports that as much as 75 percent of most companies' intellectual property is contained in the messages and attachments they send through their e-mail systems.

"E-mail has become the primary medium for how we communicate," says Jeffrey Schwarz, a partner at McDermott, Will & Emery. "Four years ago we used paper and FedEx. Now almost everything is done over e-mail." The consequence is that e-mail has become a de facto record repository, a burden that e-mail systems as we know them can barely handle. "We are trying to make a system do something that it wasn't designed to do," says Schwarz, who is also the top IT officer for the $668 million firm. "E-mail wasn't designed to be a document repository. It was meant to be send, read, delete. But now you can't delete. There are regulations that don't let you do that."

Many CIOs thought they had nailed e-mail systems in the '90s and could move on to more important things, but the kind of search required by the new regulations is beyond the capability of most current e-mail systems. Simply adding more storage isn't nearly enough. Consider that over the next seven years, a company with 20,000 employees will have to save approximately 4.5 billion e-mails, and it must be able to search through them all to find messages relevant to a request for information in a matter of days or hours. "These new [regulatory] obligations require you not just to save more e-mails, but to be able to access them promptly," says Carl Metzger, a partner specializing in securities litigation at Testa, Hurwitz & Thibeault. "CIOs who have ignored these requirements need to take their heads out of the sand." It's high time for all CIOs to reexamine their e-mail management systems.

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