Obama, Dems Could Mean New Compliance Regs - Page 2

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As a consequence, Kelly expects emerging regulation to focus attention on organizations' incident response and investigation programs. Directly or indirectly, this will require improvement in audit and logging programs and could potentially lead to the mandating of log retention for much greater periods of time than typically are retained today.

'Compliance tax'

Meanwhile, vendors are continuing to churn out offerings aimed at satisfying retention requirements for financial records, HR documents, executive communications and other sensitive information. Lumigent Technologies, for instance, offers finance controls monitoring for business applications that the company says drives down the cost of compliance.

Lumigent president and CEO John Capobianco founded the company after an experience in taking a company public a couple of years back. Annual spending in his finance department soared from $300,000 to $2.5 million, mostly to cover manual compliance reporting.

"This 'compliance tax' of roughly $2.2 million per year delivered exactly zero benefit for my products, my consumers, my employees, or my company," he said. "Software can automate regulatory compliance tasks previously done by hand. Financial compliance control systems streamline compliance reporting, letting organizations dramatically reduce their compliance costs and focus their energies on satisfying customers and turning profits."

Stories such as Capobianco's abound, and anecdotes of companies avoiding U.S. financial markets to register overseas have become commonplace. The burdensome nature of SOX and its ilk not only failed to prevent financial catastrophe and reign in corporate shenanigans, its critics charge, but they have also made it much harder to do business in the U.S.

This has led to cries for the abolition of SOX from the likes of former Speaker of the House Newt Gingrich. He believes SOX has done more harm than good, is undermining the venture-capital industry in Silicon Valley and has led to many companies becoming private once again to avoid its shackles. Still, given the current financial crisis and the new Administration, it seems likely that compliance regulations will only get tougher.

"With respect to Mr. Gingrich, I can't imagine popular opinion backing the repeal of SOX," Capobianco said. "Overall, people are wary of Wall Street, and the bipartisan consensus this election year favors more regulation, not less. But even if SOX is replaced by smarter, less destructive regulations, organizations will continue to pay the hidden tax to demonstrate their compliance."

Whatever lies just over the regulatory horizon, one thing is for sure: Storage administrators are going to end up with even more data to store, and storage vendors will benefit from a market driven by the need to comply.

"IT can help expedite compliance," Babineau said. "Storage is an integral part of many compliance-related business process solutions because it is the final resting place for vital data. It also replaces the paper box as the resting place for business records which need to be created and retained for years."

This story originally appeared on Enterprise Storage Forum