eDiscovery Will Follow the Cloud Computing Boom

The National Inflation Association (NIA) reported this week that  after years of rumors about cloud computing going mainstream around the world, the cloud computing boom is now finally here. They predict that by the year 2013, cloud computing could become a bigger boom on Wall Street than the dot-com boom was in the year 2000. Cloud computing is currently a $74 billion industry that accounts for 3% of global IT spending, but in 2013 cloud computing is expected to become a $150 billion market.

The NAI further stated that 2012 will be remembered as the year in which cloud computing started to become widely adopted worldwide. Cloud computing is expected to create 14 million new jobs globally by year 2015. In the consumer space, Gartner is predicting that cloud services will be on 90% of personal consumer devices by year 2015 so that consumers can store, connect, stream, and synchronize content across multiple platforms at different locations.

Industry analyst are heralding the explosion in the Cloud computing market as great news for the Cloud Service Providers (CSP).  According to a forecast from independent technology analyst firm Ovum, the global public cloud services market will more than triple in size over the next five years to reach revenue of $66 billion in 2016 and the market will see a compound annual growth rate (CAGR) of 29.4 percent from the $18 billion it reached at the end of 2011.  Ovum goes on to report that in terms of the cloud computing service lines, Software-as-a-Service (SaaS) will shrink from 87 percent of the market in 2011 to 62 percent in 2016 due to the rise of infrastructure as a service (IaaS) and platform as a service (PaaS), which will grow from 9 percent and 5 percent, respectively, to 23 percent and 16 percent by the end of the forecast period.

And, there are numerous other studies by most of the major international industry analysts that predict a dramatic increase in the size of just about everything having to do with Cloud computing.

However, it is my impression that the inevitable and potentially dramatic increase in the demand for eDiscovery and Information Governance due to this explosion of the Cloud computing market, is flying under the radar of most analysts.  eDiscovery and Information Governance professionals know full well that there is a linear and possibly an expontial relationship between the volume of Electronically Stored Information (ESI) and the demands and cost of identification, collection, analysis, processing and production of that ESI.

In 2011, Gartner predicted that the eDiscovery market would reach $1.5 Billion in revenue by 2013.  And, depending upon which analyst you follow (and believe), the size of the Information Governance market is anywhere from 2X to 10X the size of the eDiscovery market.  I believe that all of these forecasts are extremely low.

Further, a recent study by eDSG on "How Cloud Service Providers Support eDiscovery and Information Governance" as reported on this blog on March 7, 2012, indicated that 95% of  the Cloud Service Providers and 98% of the general counsel from the global 2000 (based on participation in the survey) did not have a plan for responding to eDiscovery and Information Governance requests for ESI residing in CSP facilities.

In summary, my prediction is that the explosion in the size of the Cloud computing market as reported by the National Inflation Association is really good news for any of the technology and service providers, along with their investors, that are planning to support eDiscovery and Information Governance in the Cloud.  As the name of this blog implies, the eDiscovery paradigm shift is underway and the demand of Cloud computing is only going to make that shift and the associated size of the market even bigger.

The full text of the press release by the National Inflation Association: http://www.marketwatch.com/story/cloud-computing-is-new-wall-street-boom-says-nia-2012-03-20

Labels: Cloud, Cloud Computing, Cloud Service Providers, CSP, Early Case Assessment, eDiscovery, Information Governance, Law, Legal, Legal Technology, Litigation

posted by Charles Skamser @ 8:33 AM 0 Comments

Cloud Computing Architecture and eDiscovery

Cloud computing is now the defacto Information Management (IT) architecture that enterprises are either already utilizing or have plans to utilize in the near future. The goal of this Blog post is to provide an overview of cloud computing, it's effect on the practice of eDiscovery and what eDiscovery in the cloud really means.

From a pure conceptual standpoint, cloud computing is actually a marketing term for technologies that provide computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services.  From an end user standpoint, conceptually not having to worry about where your data is located is a tremendous benefit.  However, from an eDiscovery collection perspective, conceptually not knowing where data may be located could prove to be an issue or at the very least a concern.

Cloud comping is also a delivery model for IT services based on Internet protocols, and it typically involves provisioning of dynamically scalable and often virtualized resources.  It is a natural byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet. This may take the form of web-based tools or applications that users can access and use through a web browser as if the programs were installed locally on their own computers.  Saleforce.com is the best known example of this type of application of cloud computing.  There are also several eDiscovery vendors that now offer a web-based option and most, if not all of the remaining vendors will be doing so in 2012.

At the foundation of cloud computing is the broader concept of infrastructure convergence, consisting of services delivered through shared data centers, which appear to users as a single point of access for their computing needs. This type of data center environment allows enterprises to get their applications up and running faster, with easier manageability and less maintenance, and enables IT to more rapidly adjust IT resources (such as servers, storage, and networking) to meet fluctuating and unpredictable business demand.  From a pure conceptually standpoint, infrastructure convergence enabling the flexibility of meeting the inevitable demands of eDiscovery processing would seem to be the natural next step.  However, in practice, with much of the legacy eDiscovery technology locked into appliances and complex software configurations that don't lend themselves to the advantages of  virtualized computing, there are only a few eDiscovery technology vendors that are positioned to truly take advantage of cloud computing and the flexibility of infrastructure convergence.

Once an enterprise decides to go down the cloud computing path they can either implement the concept of infrastructure convergence and shared resources as an internal private cloud, an outsource their IT infrastructure to a third party public cloud through a Cloud Service Provider (CSP) or they can choose a hybrid approach which utilizes both public and private cloud infrastructures.  However, as I stated in the previous paragraph, there are only a few eDiscovery technology vendors that are positioned to truly take advantage of cloud computing and the flexibility of infrastructure convergence.  Therefore, at this point, even though the enterprise decides to implement cloud computing, unless they embrace the new generation of eDiscovery platforms that can "live and work" in the virtual world of the cloud, they may have to leave their eDiscovery processing behind and continue to collect and process data outside the cloud.

Amazon Web Services (AWS)
One of the first and better know Cloud Service Providers (CSPs) is Amazon Web Services (AWS).  Launched in July 2002, Amazon Web Services  is a collection of remote computing services (also called web services) that together make up a cloud computing platform, offered over the Internet by Amazon.com. The most central and well-known of these services are Amazon EC2 and Amazon S3.  Most of these services are not exposed directly to end users, but instead offer functionality that other developers can use. In June 2007, Amazon claimed that more than 330,000 developers had signed up to use Amazon Web Services. Amazon Web Services’ offerings are accessed over HTTP, using Representational State Transfer (REST) and SOAP protocols. All services are billed on usage, but how usage is measured for billing varies from service to service. Please note that as of the writing of this Blog post, AWS had not responded to numerous requests to officially comment on how they are currently handling eDiscovery requests from thier clients.

CLOUD ARCHITECTURE LAYERS
Cloud computing architecture is categorized into three (3) layers; Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).

Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) is the best known of these layers as it is the most visible to users. Simply put, Software-as-a-Service (SaaS) enables software vendors to deliver software as a service over the Internet, eliminating the need to install and run the application on the user's own computers and simplifying maintenance and support.  SaaS is actually a more mature delivery architecture than many realize and is an integral part of cloud computing. According to a Gartner Group estimate, SaaS sales in 2010 reached $10B, and were projected to increase to $12.1b in 2011, up 20.7% from 2010. Gartner Group estimates that SaaS revenue will be more than double its 2010 numbers by 2015 and reach a projected $21.3b. Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market was forecast to reach $3.8b in 2011, up from $3.2b in 2010.

And, as indicated earlier in this post, there are a number of eDiscovery tool vendors that offer SaaS delivery options.  However, don't confuse SaaS delivery with providing eDiscovery in the Cloud.  There is a major difference.   Since it is highly unlikely that the eDiscovery platform is in the same physical location as the data, eDiscovery SaaS providers requires users to physically collect data and move it the data center (physical location) that houses the eDiscovery platform.    Once loaded onto this platform, the data is processed and then users can access it over the internet.  I contend that this approach of moving data to the eDiscovery platform is not that different that what has occured over the past 5-10 years with other enterprise data and is not eDiscovery in the cloud.  True eDiscovery in the Cloud requires the eDiscovery software to reside in the cloud.  This implementation would in fact be considered SaaS but is much different than the current generation of eDiscovery SaaS platforms.

Platform-as-a-Service (PaaS)
Platform-as-a-Service (PaaS) is a category of cloud computing services that provide a computing platform and a solution stack as a service.  In the classic layered model of cloud computing, the PaaS layer lies between the SaaS and the IaaS layers.Various types of PaaS vendor offerings could be extensive and will include a total application hosting, development, testing, and deployment environment, along with extensive integrated services that consist of scalability, maintenance, and versioning.  PaaS offerings may also include facilities for application design, application development, testing, deployment and hosting as well as application services such as team collaboration, web service integration and marshalling, database integration, security, scalability, storage, persistence, state management, application versioning, application instrumentation and developer community facilitation.

It is within the Platform-as-a-Service (PaaS) layer where eDiscovery services belong.  In fact, this may be a good time to coin the term eDiscovery-as-a-Service (eDaaS).  Unfortunately, as of the writing of this Blog post there are no eDiscovery vendors that offer eDiscovery-as-a-Service (eDaaS).  However, there are several vendors that I am aware of that are working on offerings to be released in early 2012.  And, since providing eDaaS as a standard option for any PaaS offering makes so much sense and could provide a first mover and key competitive advance for Cloud Service Providers (CSPs), I predict that we will see several eDaaS offerings before the end of 2012.  And, I also predict that once the eDaaS offerings hit the market, the legacy eDiscovery platform providers will be forced to re-evaluate the value propositions of their non eDaaS offerings in the cloud.

Please note that I am working on a research paper investigating how the CSPs support the eDiscovery requirements of their client bases and what next generations tools (eDaaS) are going to be available to assist the CSPs with these requirements.

Infrastructure-as-a-Service (IaaS)
Infrastructure-as-a-Service (IaaS) is the least glamorous of the cloud computing layers but provides the real technical "infrastructure" to enable cloud computing to exist.  Infrastructure-as-a-Service (IaaS), simply stated, provides a physical yet virtual processing environment along with raw (block) storage and networking. Rather than purchasing servers, software, data-center space or network equipment, enterprise clients instead buy those resources as a fully outsourced service with the ability to scale up processing, storage and even networking as may be required.  There is a lot more technical details to IaaS.  However, for the purposes of this post, my definition is adequate to get my point across.

CONCLUSION
Cloud computing is now the defacto Information Management (IT) architecture that enterprises are either already utilizing or have plans to utilize in the near future.  Cloud computing architecture is categorized into three (3) layers; Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).  It is within the Platform-as-a-Service (PaaS) layer where eDiscovery services or eDiscovery-as-a-Service (eDaaS), belong .  Unfortunately, as of the writing of this Blog post there are no eDiscovery vendors that offer eDiscovery-as-a-Service (eDaaS).  However, there are several vendors that I am aware of that are working on offerings to be released in early 2012.  And, since providing eDaaS as a standard option for any PaaS offering makes so much sense and could provide a first mover and key competitive advance for Cloud Service Providers (CSPs), I predict that we will see several eDaaS offerings before the end of 2012.

Labels: Amazon, AWS, Cloud Service Providers, CSP, eDiscovery, IaaS, Infrastructure-as-a-Service (IaaS), Litigation, PaaS, Platform-as-a-Service, Saas, Software-as-a-Service

posted by Charles Skamser @ 12:22 PM 0 Comments

Enterprise App Store in the Cloud

If you are using the iPhone, iPad or one of the Android portable devices,  you are already familiar with the concept of an "App Store".

The Apple App Store opened on July 10, 2008 via an update to iTunes. On July 11, the iPhone 3G was launched and came pre-loaded with iOS 2.0.1 with App Store support; new iOS 2.0.1 firmware for iPhone and iPod Touch was also made available via iTunes. As of June 6, 2011, there are at least 425,000 third-party apps officially available on the App Store. As of January 18, 2011, the App Store had over 9.9 billion downloads and at 10:26 AM GMT on Saturday, January 22, 2011, the 10 billionth app was downloaded from Apple App Store. As of late 2011, 200 million iOS users have downloaded over 18 billion apps from its App Store.

And although the Android platform is a relative new commer to the App market, it now boasts 400,000 Apps with over 10 billion downloads.

So, the paradigm shift has occurred.  Mobile devices users (which before too many more years will make up the majority of computer users) now expect to be able to search for an App in the cloud and then download it to their device, pay for it with a credit card and start using it immediately. It is just the way "things" are suppose to work. So, why aren't we doing this in the enterprise software market?

Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) is the closest thing to the App Store model in the enterprise market. SaaS, sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally, typically with a Cloud Service Provider (CSP) or directly from the software vendor, and are typically accessed by users using a thin client, normally using a web browser over the Internet.

SaaS has become a common delivery model for most business applications, including accounting, collaboration, customer relationship management (CRM), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM) and service desk management. SaaS has been incorporated into the strategy of all leading enterprise software companies.  Please note that the term software as a service (SaaS) is considered to be part of the nomenclature of cloud computing, along with Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) which is the topic of my next Blog post.
According to a Gartner Group estimate, SaaS sales in 2010 reached $10B, and were projected to increase to $12.1b in 2011, up 20.7% from 2010. Gartner Group estimates that SaaS revenue will be more than double its 2010 numbers by 2015 and reach a projected $21.3b. Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market was forecast to reach $3.8b in 2011, up from $3.2b in 2010.So, where is the Enterprise App Store that houses and enables users to download Enterprise Class SaaS Apps?

The Enterprise App Store
The Enterprise App Store doesn't really exist, to any great degree, because the infrastructure and business model is much more complicated in the enterprise market than it is in the consumer market.  And, due to the quarter over quarter financial pressues, the legacy software vendors are "dragging their feet" on moving to this model as it will completely change their revenue models and the transition could prove to  be a short term disaster for profits and stock prices.  In the long run, an Enterprise App Store delivery model should generate more revenues with dramatically higher margins.

Nevertheless, Amazon and several of the other Cloud Service Providers (CSPs) are beginning to offer application catalogues that resemble the Apple and Android App Stores.  And, there are rumors that several of the Auzre cloud platform providers are also developing the infrastructure and backoffice administration to support an Enterprise Class App Store in the Cloud.

Where it Runs
One of the major differences between downloading a single application to an iPhone and downloading an enterprise class application for use throughout an organization is where and how it runs.  Obviously, the iPhone app runs on a single iPhone.  However, the enterprise app will more than likely have to run in a virtual environment on a server and will have to provide access to multiple users.    This is a much different configuration and will require a much more robust infrastructure.

Pricing
Another major difference is pricing.  Many iPhone and Android apps are free and very few cost more than a few dollars.  In addition, users can download them and pay for them, as an example, with the credit card they have on file with iTunes. Enterprise apps on the other hand may cost hundreds of thousands of dollars and won't be paid for via a credit card.  Once again, the infrastructure and backoffice administrative systems to support this new model are much different.

Further, thanks to $.48 per hour per server pricing from CSPs like Amazon, use pricing is also another variable that enterprise App users will begin to demand.  Instead of paying $250.000 per year for an SMB enterprise ERP system, users may want to pay $100 per hour per instance or per user for the time that they are actually using the App.  And, once again, the infrastructure and backoffice administrative systems to support these requirements are much different than anything that has been done in the past.

The New Enterprise App Paradigm in the Cloud
The new Enterprise App paradigm in the cloud will enable enterprise users to access the cloud (where all of their data now resides) from any computing device (more likely a mobile devices as time marches on) and choose which Apps they want to use.  The system (more than likely supported by a major CSP) will pull an instance of the requested App out of an App library, configure it to support the needs of the user and then charge the user's enterprise for the time that the App is actually used.  This may sound crazy.  But, this paradigm is not that far away.  And, once one of the major CSPs begins to offer this as a first mover, the market will explode and the rest of the CSPs will have to follow or perish (i.e. how viable would a smart phone be that didn't enable you to download applicaions?).

Targets of Opportunity
The target markets for an Enterprise App Store are wide spread with both operational and financial benefits for both large and small enterprises.  However, there are a few vertical application domains with applications that are not used on a daily basis that appear to pose great initial targets of opportunity.  An example of this type of App would be within the eDiscovery market wtih Early Case Assessment (ECA) platforms.  Enterprises that may be reluctant to spend $250,000 per year for a ECA tool under the current legacy distribution model where the amount of usage is highly variable,  might be keen to enter into an agreement to have access to a virtual ECA solution with a pricing schedule that only charges them when they use the system.   I am not sure that the legacy ECA tool vendors are going to be pleased with this new paradigm (See above).  But, its the direction that the market is headed and therefore they had better start to make adjustments in their delivery models and also had better prepare their stockholders for the changes in the revenue stream.

SummaryIt only took comsumers a fews years to embrace the iPhone and Android App Store model and download almost 30 billion applications from the cloud.  As I always say, the train has left the station on how users want their apps served up.  So, now its just a matter of how long it takes the enterprise software vendors and the Cloud Service Providers to get their collective acts together and offer the same delivery paradigm for enterprise Apps.

Labels: Android, App Store, Apple, Cloud Service Provider, CSP, Early Case Assessment, ECA, eDiscovery, iPad, iPhone, iTouch, iTunes

posted by Charles Skamser @ 1:16 PM 0 Comments