Autonomy has won a $70m (£35m) deal with a large global bank, by far its largest contract to date, for Desktop Legal Hold, one of the products that came with last year's Zantaz acquisition.
The customer, not identified by Autonomy, is thought to be global bank Citigroup.
Autonomy bought archiving, compliance and e-discovery software maker Zantaz for $375m in July, 2007. Desktop Legal Hold (DLH) is software that allows businesses to quickly identify, set aside and organise documents and emails for lawsuits.
Banks are reportedly setting their internal computer systems in order to meet any legal demands from possible shareholder litigation over the losses they have taken on sub-prime home lending crisis in the US.
US federal rules specify relevant paper and electronic communications must be readied for court use in 99 days. Discovering them through non-automated means can be very expensive, as well as taking months longer, exposing companies to severe legal penalties.
The banking industry has experienced turmoil because of sub-prime lending issues. Chuck Prince, Citigroup's CEO, recently resigned after the group reported an $11 billion loss related to sub-prime lending last year. Its competitor Merrill Lynch similarly wrote off $8 billion. Other banks such as HSBC, UBS and Morgan Stanley have also reported sub-prime write-offs.
The deal is Autonomy's largest-ever order, with its average sale being less that half a million dollars. The order will be fulfilled over four years.
It is likely that deal would not have happened without Autonomy having purchased Zantaz. Citigroup was an Autonomy customer before the Zantaz acquisition and was involved with the purchase, giving it knowledge of Zantaz and its technology.
Autonomy gained some funds for the acquisition by selling 12.7 million shares placing through Citigroup and UBS. In December Citigroup upgraded its rating of Autonomy shares from 'hold' to 'buy' because of Autonomy's sales prospects.
The prospects for sub-prime-affected banks to purchase DLH to better deal with possible lawsuits look good. Autonomy has in excess of 17,000 customers, amongst which are many banks: ABN AMRO; Deutsche Bank; and Lloyds TSB for example.
Autonomy could find that the return on its investment in Zantaz comes in rather more quickly that it anticipated, making it one of the very few winners from the sub-prime crisis.