Dexrex Gear’s Technology Makes Instant, Text Messaging and Social Media Appropriate for the Workplace

There have been countless times where I’ve started a conversation on Facebook, expanded on it via e-mail, and wrapped it up through text messaging.

For me, it’s not really a big deal, as I’m usually discussing weekend plans or roommate issues and not anything subject to examination by a federal agency. But for entities that have to remain accountable to the government—say financial institutions or other big public corporations—it’s a bit more of a problem.

Enter Cambridge-based Dexrex Gear (Xconomy’s downstairs neighbor), a maker of software and servers for capturing instant messages, social media updates, and SMS messages for compliance and archiving. The startup’s software grew out of a “universal inbox” for instant messaging that Derek Lyman and Richard Tortora developed when they were students at UMass Amherst. The technology caught the eye of SECCAS, a maker of e-mail compliance and long-term storage software. The firm asked the college students to rebuild their technology for capturing instant messages inside financial institutions for regulatory compliance.

“We created it for their use and they rode shotgun the whole way,” says Lyman, a co-founder and now director of the company who left college in 2007 to run Dexrex full-time.

Dexrex’s ChatSync software platform has expanded over the past two years to capture social media conversations, and this fall introduced the capability to capture messaging on BlackBerry, Android, Windows Mobile, and Symbian mobile phone platforms, The software works by plugging into a company’s fleet of devices, extracting and encrypting what was said, and sending it to a server (which can be hosted by Dexrex or on customer premises, Lyman says). The system pulls the different records of communication into a database, and then threads them into one conversation. So, if employees are discussing a single issue via multiple platforms like text messaging, Facebook, and instant messaging, ChatSync makes it all appear together as a single conversation.

It might sound invasive, but in industries like financial services, employee communications are subject to examination if an agency like the SEC is examining a firm for wrongdoing, occurrences that really came to light as Dexrex was developing the product in the wake of the big banks’ crash in 2008. If companies aren’t archiving these communications all along, electronic discovery can be a huge expense, Lyman says. “If [companies] weren’t systematically doing it, they had spot solutions, and would get raked over the goals when any incident happened,” he says.

Companies lacking archiving methods for platforms like social media and text messaging typically just banned their employees from using them altogether, Lyman says. “We focus on enabling the capture of these alternative communications into the primary enterprise platform,” he says. “People should be able to use whatever it is that they want to use and we’ll get the logs where they need to be.”

Certain platforms, such as BlackBerry and the Microsoft Office Communication Server, have previously had technology in place to archive the communications on their individual platforms, but that the logs came in the form of flat, unstructured .TXT files. “It’s kind like this black box of doom,” says Lyman of the traditional methods of auditing and data discovery.

Firms beyond traditional regulated spaces—like financial services, healthcare, and defense—still have the potential for being hit with big electronic discovery costs after the fact, if they aren’t archiving conversations, Lyman says. Company communications are subject to being subpoenaed in the case of wrongful termination and sexual harassment litigation, and even in the divorce cases of their individual employees—and companies are forced to foot the bill.

Dexrex is largely focused on appealing to smaller and medium-sized businesses to enable them to protect themselves. It offers the technology under a software-as-a-service model, selling the product from around $1 or $2 per user per month, which enable even small brokerage shops to use the technology, Lyman says.

Dexrex bases its entire business model around channel resellers, and currently has a sales partnership with Needham, MA-based Sonian, which packages ChatSync with its own e-mail archival software. The company has raised $2.8 million to date, including a $1 million financing in February to help deploy its software through the partner networks and bring on more resellers. The company is working on raising another round, targeting investors with experience in the enterprise IT world, Lyman says.

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