Time for the Next Generation of Cloud Leadership

The cloud computing market is the now the "big thing" and there are hard revenue facts to back up that claim.  As an example, independent research firm Forrester Research expects the global cloud computing market to reach $241 billion in 2020 compared to $40.7 in 2010, according to a new Forrester report called “Sizing the Cloud”. This same Forrester Report indicates that although Infrastructure-as-a-Service (IaaS) is going to capture a significant share of this revenue, the Software-as-a-Service (SaaS) market will grow to to $92.8 billion by 2016.

This rapid growth is a classic technology market paradigm shift.  And, paradigm shifts, even in the fast paced world of Information Technology (IT) are often very hard for most people to grasp. It is not that they are necessarily resistant, lack intelligence or don't want to move forward.  The truth is that we see through a lens that is familiar and the unfamiliar is hard to grasp, especially if it requires us to think differently. The challenge is that the familiar will often not take us into the future. The world changes, and as it does the familiar often becomes our enemy, not our friend.

Interestingly, when change around us is a rapid as the move to cloud computing, we often cling to the familiar because it provides us with stability when in reality the familiar is destined to keep us from meeting new opportunities in our changing world. Think Kodak. While they clung to the familiar the world changed and they were caught unable to catch up. The familiar was their nemesis.

I see the same dynamics at play in the cloud computing market.  And, although I am not predicting an epic cloud computing failure on the level of a Kodak, I do predict some surprising changes in in both the vendor community and among major enterprises as a result of lack of leadership in successfully navigating the cloud.This begs the question about whether or not it might be time for the next generation of cloud technology leadership?

In 2011, I just got a chance to read a really interesting article titled, "Above the Cloud: The Next Generation of Cloud Leadership", published on November 9, 2011 by Darren Cinti, Matt Aiello and Jason Kranz. The basic premise of the article is that to fully deliver on the promise of cloud computing, cloud service providers (CSPs), Software-as-a-Service (SaaS) providers and customers will all require some new and highly specific leadership abilities.

Having just completed and published an in depth study of Information Governance and eDiscovery Practices for Cloud Service Providers (CSPs) that found several alarming flaws in cloud leadership with both vendors and the enterprise, I re-read the 2011 article by Darren Cinti, Matt Aiello and Jason Kranz with a more informed perspective.

General Issues with Cloud Provider Leadership

The current crop of cloud technology leaders on the vendor side of the equation have done an amazing job of monetizing the cloud during the early adopter phase of the technology adoption cycle.  The early Cloud Service Provider (CSP) leaders from organizations such as Amazon and RackSpace identified the demand for off site storage and dedicated hosting facilities and built the IT infrastructure to meet those demands.  And, these early bets have paid off as industry analysts estimate AWS to be a billion-dollar business with a 10% profit.  However, to continue to grow this business, CSP leadership is going to have to venture out beyond the outsourced data center and storage model into the IT solutions and managed services arena.  And, although organizations such as AWS with its Marketplace offering and  are showing signs of understanding this quickly evolving paradigm shift, I am not convinced that the leadership completely understands the subtle nuances of moving into software solutions.

As an example, as I found from the hundreds of interviews that I did with many of the CSP executives, 98% did not understand even the most general requirements for information governance or eDiscovery and didn't believe that they (as a CSP) had any need to provide such services.  At first I was perplexed by this response.  But, after further reflection, it began to make sense.  After all, why would an organization that had built a billion dollar business literally overnight need to consider changing their business model and expanding their offerings?

Darren Cinti, Matt Aiello and Jason Kranz answer this question in their article by stating that it is not only a matter of what markets to pursue and services to offer, but also a matter of business model innovation, which is a more rarefied strategic talent.  Does this mean that the current CSPs are "one trick ponies"?   This is probably the case for many that can't adopt to the new paradigm.  However, as indicated, organizations such as AWS seem to be at least making an attempt to expand its offerings.  However, I am going to contend that even AWS is going to have to bring in new leadership that understands this new software solutions paradigm to be successful.

This leads us to an examination of the hundreds if not thousands of Software-a-Service (SaaS) providers.  Building upon the multi-billion dollar success of salesforce.com, application developers funded by VC's looking for the next big ".com" throughout the world have jumped into the SaaS fray offering literally just about any type of software solution that you can imagine. However, many are having trouble "Crossing the Chasm" from early adoption and success to a full blown and financially viable business model.  Possibly, that reason is that most of the early SaaS companies were and still are started and run by technologists.  However, it probably takes a sales, marketing and customer services leader to take them to the next level.  And, in the world of SaaS, these next generation leaders are hard to find.

Darren Cinti, Matt Aiello and Jason Kranz quoted the CEO of a SaaS provider who asks, "How do you monetize the customer long term?" Answering that question requires the ability to find the right combination of services, delivery, and internal resources in a rapidly evolving competitive landscape to produce a reasonable profit for the provider and real value to the customer. Bottom line, it take a next generation leader.

The last group that I am going to comment on in regards to cloud providers are the big legacy software providers such as Oracle, Microsoft and IBM.  Historically, these giants have offered their legacy software to corporations under large and very expensive enterprise wide license schedules with 20%-40% annual maintenance and millions of dollars in associated custom programming and services to ensure that these systems work.  Corporate buyers didn't really like this model but it was the only game in town.  As the age old saying goes, "an enterprise IT buyer was never going to lose their job by choosing IBM whether the solution worked or not".

With the advent of SaaS over the past 5 years, the legacy providers now have competitive.  As an example, why would an enterprise of any size not license salesforce.com on a per seat basis and not have to pay for any of the IT infrastructure costs?  The answer is that you wouldn't.  And therefore, the legacy providers have been forced to respond.  However, it has not been as easy as you may think.  Offering a SaaS solution requires planning and time.   These organizations just can wake up one morning and decide that starting today they are going to offer SaaS solutions.  They either have to build new applications from scratch or acquire an existing code base.  Further, once they have the new SaaS offering in place, they then have to go to their installed base and begin the sales discussion that they now offer the option of SaaS.  And, this process is wrought with danger as it signals to customers that SaaS is now an option.  As a result, many decide that they should begin looking at alternative vendors.  In short, many legacy providers have experienced client cannibalism at best (competition between the legacy software sales team and the new SaaS sales teasm) and loss of clients to competitors at worst while they attempt to make the transition to offering the option of SaaS.

None the less, these legacy vendors have few options.  Therefore, Oracle, Microsoft and IBM have all jumped into the cloud game with some pretty spectacular IaaS, PaaS and SaaS offerings.  However, it has not been without at least a "pound of flesh" as I know many legacy software sales executives that were making a million plus per year and have been replaced with telemarketing sales people selling and supporting SaaS solutions. Once again, successfully making this transition to the cloud is going to take next generation leadership.

General Issues with Cloud User Leadership

I am not going to rehash all of the operational and financial savings that can be realized by moving to the cloud.  Instead, I am going to comment on the leadership aspects of what the enterprise  needs to do to be successful leveraging the cloud.

Most Global 2000 organizations have very competent IT leaders that run massive international organizations with multi-million dollar budgets.  However, how many of these leaders truly understand the value of the cloud and how many are willing to dismantle these massive organizations in the spirit of doing what's right for their share holders? And maybe an even more fundamental question is how many Global 2000 Board of Director members and C level executives understand the value of the cloud and are directing their IT executives to move forward with cloud migration plans?  The answer to both of these questions is "not very many" and therein lies the gap in leadership.

Darren Cinti, Matt Aiello and Jason Kranz state that in organizations that employ the cloud, the focal point will inevitably be CIOs. They will have to understand how cloud computing can best support the business, both operationally and strategically. They will have to work collaboratively with other functions and parts of the business to realize the greatest possible value from the cloud and to uncover additional uses. And they will need to be trusted advisers to their CEOs, helping assess the trade-offs, risks, and advantages of various uses and deployments of the cloud for the company. More specifically, CIOs will need a comprehensive understanding of the issues in key business and operational areas.

I contend that the Global 2000 needs a new breed of CIO, one that is less technical and more business savvy with the ability and willingness to lead and not worry about maintaining previous IT empires.  I contend that is it going to take next generation cloud leadership.

Conclusion

The cloud is no longer something that is going to possibly happen and may just be a fade.  The paradigm shift to the cloud is underway and therefore technology providers and technology users alike need to examine their current leadership and determine if a change may be required to at least provide the opportunity for success.

It is not that current leadership is not necessarily resistant, lack intelligence or don't want to move forward.  The truth is that we see through a lens that is familiar and the unfamiliar is hard to grasp, especially if it requires us to think differently. The challenge is that the familiar will often not take us into the future. The world changes, and as it does the familiar often becomes our enemy, not our friend.

Darren Cinti, Matt Aiello and Jason Kranz conclude that as cloud computing develops over the next two to three years, leadership will be critical to the success of providers and buyers alike. Cloud customers whose CIOs understand and address those critical business and operational issues – security, integration of services, technical talent, legal/privacy/compliance, and vendor management –will get a head start on using the cloud more extensively and realizing its benefits: cost-savings, ability to access services on any device anywhere, reliability, scalability, and the agility those attributes confer on the business. For technology product and services companies, the impact of the new model of cloud delivery is even broader, affecting almost all functional areas of the organization from engineering and development and customer service through sales and marketing up through the key roles in the C-suite. Those providers that get it right will win the race to be market leaders while laggards will likely fall by the way side. In this new world, CEOs and Boards of provider companies and buyer companies will need to make sure that they are hiring executives with the right competencies – and they will have to move expeditiously as more companies compete for cloud talent that is already in very short supply.

Under any circumstances, being a part of this paradigm shift is nothing less than spectacular.

Labels: Amazon, AWS, Cloud, Cloud Computing, Cloud Service Providers, CSPs, eDiscovery, IBM, Kodak, Microsoft, Oracle, Rackspace

posted by Charles Skamser @ 11:34 AM 0 Comments

Virtualization is the Key to Future eDiscovery Software

Historically, eDiscovery software has run on a physical computer. However, this architecture has a significant number of operational and financial flaws that make it an unattractive option as the world of information management and therefore the eDiscovery industry moves forward and into the arena of Cloud Computing.

First of all, even though the cost of computing power (i.e. processors, memory, etc.) has dropped dramatically over the past several years and will continue to drop, with the option to run software in a virtual computing environment, it no longer makes any sense to "bind" software to single physical computer. The model is not flexible and doesn't leverage operational investments in data center infrastructure, rack space, power, cooling, cabling, maintenance and support.

Further, software running on a single physical computer is very inefficient as it rarely utilizes the power of that computer.  And, when a physical computer is maximized, a new physical computer has to be provisioned (i.e. setup, configured, software loaded, tested, etc.) which takes time and therefore costs money.

Virtual computing environments, on the other hand, enable multiple virtual machines to run on the same physical machines thereby maximizing the utilization of the available computing power. Theoretically, users should be able to provision new virtual machines (within a physical machine) to meet specific computing demands without having to necessarily provision a new physical machine.  Taking this virtual machine concept to a data center or in come cases a multi-data center concept, Cloud Service Providers (CSPs) such as Amazon (AWS) and Rackspace utilize the latest technology to enable the seamless provisioning of additional virtual computing environments within a single physical machine and  across as many physical machines as is necessary to complete a task.  Further, most CSPs now enable users to also provision the appropriate amount of memory and storage as may be required for a specific task and for a specific amount of time. As an example, if Early Case Assessment  (ECA) software ran in a virtual environment, users could provision a large number of both virtual and physical machines (with the appropriate memory and storage) to tackle the high processing requirements during ingestion, indexing and initial processing and then reduce the number of machines (virtual and physical) once the data was normalized and moved to a less computer intensive task such as document review.

The added benefit to the virtual eDiscovery software approach is that the vendor have the flexibility to only charge users for the computing power, memory and storage that they use as opposed to the current model that basically charges users to subsidize idle computing resources.

I would imagine that this all sounds very attractive to end users.   And, I am sure that once these users completely understand the operational and financial value of virtual eDiscovery software, they won't be interested in an eDiscovery platform that doesn't run in a virtual environment.  Adding more incentive for users to be interested in exploring virtual eDiscovery software solutions, eDiscovery software that is not virtual will not be very adept at running in the new cloud computing environment where virtual machines are the norm if not the requirement.

Unfortunately, there are only a few eDiscovery software platforms that have been designed to run in a virtual environment.  And, although there are both hardware and software solutions available that will enable a legacy software solution (not designed for a virtual environment) to run in a virtual environment, they are somewhat clumsy and add additional expense and unnecessary layers of processing.

So, in the next several weeks, as a lead in to the release of the eDSG/DCIG 2012 Early Case Assessment Interactive Buyer's Guide, I will be publishing several articles on which eDiscovery software vendors have eDiscovery software that was designed to run in a virtual environment.

Labels: Amazon, AWS, Cloud, Cloud Computing, Cloud Service Providers, CSPs, Early Case Assessment, eDiscovery, Rackspace, Virtual

posted by Charles Skamser @ 3:47 PM 1 Comments

Amazon is Overlooking the Fiancial Value of eDiscovery

On April 4, 2012, Dick Harris posted a really interested article on Gigacom.com titled "How the cloud could boost Amazon’s slow-moving margins".  Mr. Harris quoted an analyst from Morgan Stanley who indicated that Amazon’s cloud computing division could be a shining star (even if not too bright) on the company’s long road toward increased profit margins. However, while their forecast isn’t glowing, it also doesn’t account for the evolution of Amazon’s cloud business from pure infrastructure-as-a-service into higher-level (and higher-margin) services.  He went on to state that in the new research report published Monday morning, analysts Scott Devitt, Andrew Ruud and Nishant Verma come to a possibly disconcerting conclusion for any investors banking on Amazon for short-term returns. The report’s gist: “After analyzing Amazon.com’s cost structure in detail and by segment, we conclude that there are far more variable costs than investors believe, leading to an overly optimistic timeline for margin expansion.” But Amazon Web Services is an opportunity Amazon might be able to exploit.

The report estimates that AWS was responsible for $1.19 billion in revenue in 2011 (I predicted in October the business was on a billion-dollar run rate), of which $108 million (or about 9 percent) was sheer profit. It’s able to maintain this margin while constantly dropping prices on its cloud services, the report contends, because AWS uses a cost-plus pricing model. That is, it just adds a premium (about 10 percent) on top of the cost of delivering those services, which continue to drop as Amazon leverages its economies of scale to buy and operate more gear and bandwidth at lower prices.

I found all of this to be very encouraging for Amazon stockholders and the cloud computing industry. However, what really caught my eye was Mr. Harris's contention that AWS margins actually could start rising as the company expands its services beyond sheer infrastructure and into managed services.  He indicated that Its NoSQL DynamoDB database service, for example, is a service for which Amazon adds value (and cost) beyond just the delivery of cloud-based infrastructure, and there are lingering rumors of a big data analytics service that will provide higher-level services than AWS’s existing Elastic MapReduce offering. 

For those of you who read my Blog, I have been contending for that past 6 months that Cloud Service Providers (CSPs) such as Amazaon are missing a very key competitive advantage by not offering eDiscovery and Information Governance as a part of an expanded Platform-as-a-Service.  Please see The Perfect Storm: eDiscovery and Cloud Service Providers, Cloud Computing Architecture and eDiscovery, eDiscovery Will Follow the Cloud Computing Boom and Navigating eDiscovery in the Cloud Shouldn't Be That Difficult.

Based on my research that there is a latent demand for eDiscovery and Information Governance in the Cloud, I conducted a research study asking both CSPs and their clients what they thought about how CSPs were currently supporting eDiscovery and Information Governance in the Cloud.   The results were very disappointing as most of the CSPs had not idea what eDiscovery was, the legal requirements nor the vlaue that it would bring to their client bases. You can read the results of this survey at: Results of the 2012 eDSG Investigation of Cloud Service Providers and eDiscovery.

With all of this history of trying to blaze new trails within the Cloud Service Provider market for eDiscovery and Information Governance, I am very encouraged by Mr. Harris's article and optimistic that at Amazon may be headed toward offering additional services to their clients such as analytics, eDiscovery and Information Governance.  It may in fact be the key for Amazon to increasing the $1.19 Billion in revenue that AWS posted for 2011 to a much higher level than could have ever been imagined with just IaaS or even standard PaaS services.  And, if Amazon doesn't get it or doesn't want to make a move on eDiscovery, I predict that one of the other CSPs will.

The full text of the Gigacom article by Dick Harris is as follows:

According to analysts at Morgan Stanley, Amazon’s cloud computing division could be a shining star (even if not too bright) on the company’s long road toward increased profit margins. However, while their forecast isn’t glowing, it also doesn’t account for the evolution of Amazon’s cloud business from pure infrastructure-as-a-service into higher-level (and higher-margin) services.

In the new research report published Monday morning, analysts Scott Devitt, Andrew Ruud and Nishant Verma come to a possibly disconcerting conclusion for any investors banking on Amazon for short-term returns. The report’s gist: “After analyzing Amazon.com’s cost structure in detail and by segment, we conclude that there are far more variable costs than investors believe, leading to an overly optimistic timeline for margin expansion.” But Amazon Web Services is an opportunity Amazon might be able to exploit.
The report estimates that AWS was responsible for $1.19 billion in revenue in 2011 (I predicted in October the business was on a billion-dollar run rate), of which $108 million (or about 9 percent) was sheer profit. It’s able to maintain this margin while constantly dropping prices on its cloud services, the report contends, because AWS uses a cost-plus pricing model. That is, it just adds a premium (about 10 percent) on top of the cost of delivering those services, which continue to drop as Amazon leverages its economies of scale to buy and operate more gear and bandwidth at lower prices.

Although AWS margins remain flat, the report notes that AWS also comprises a significant portion of Amazon’s overall technology spending, so being able to drive steady, predictable profit from it is a good thing. Non-AWS technology spending, the authors estimate, is about 4 percent of net sales — “represent[ing] the largest opportunity for operating margin expansion in the near-term.” Keeping those cost down means a greater percentage of revenue goes toward profit.

However, the Morgan Stanley report doesn’t address the possibility that AWS margins actually could start rising as the company expands its services beyond sheer infrastructure and into managed services. Its NoSQL DynamoDB database service, for example, is a service for which Amazon adds value (and cost) beyond just the delivery of cloud-based infrastructure, and there are lingering rumors of a big data analytics service that will provide higher-level services than AWS’s existing Elastic MapReduce offering.
We shouldn’t overlook the possibility of AWS expanding its licensing activities, either. As it becomes more entrenched as the de facto cloud computing platforms for many companies, providers of other services and software are keen to get on board. Already, private-cloud pioneer startup Eucalyptus has licensed the AWS API, and Citrix wants to do the same for its CloudStack software. If it’s feeling greedy, Amazon could look to capitalize even further by charging others to integrate directly with its business.
Or it could just give that cost-plus dial about a quarter turn.

Labels: Amazon, AWS, Cloud Computing, Cloud Service Providers, CSPs, eDiscovery, Information Governance, Litigation

posted by Charles Skamser @ 3:35 PM 0 Comments

The Perfect Storm: eDiscovery and Cloud Service Providers

The market for Cloud Service Providers (CSPs) is very sunny.  Forrester Research predicted in a research report published earlier this year titled, “Sizing the Cloud” that the global cloud computing market would reach $241 billion in 2020 compared to $40.7 in 2010.  And, Gartner Predicts that the eDiscovery market will reach $1.5 Billion by 2013.  However, based upon the research that I have completed over the past sixty (60) days, Cloud Service Providers (CSPs) and their clients are ignoring eDiscovery as an important component of a standard cloud service offering.

I have some theories in regards to why this is the case:

CSPs DON'T UNDERSTAND eDISCOVERY
Over the pat five (5) years Cloud Service Providers (CSPs) have been busy focusing on their core offerings of Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), honing their value propositions and trying to figure out how to differentiate themselves from the pack.  Overwhelmed with the rudimentary issues of what to offer and how to make a profit , eDiscovery has not been a requirement that has reached the road map of any CSPs that I have interviewed.

Most of the reasons behind this is the fact that eDiscovery is actually a "latent pain" that the CSP's clients and prospects are not asking for (I will cover this in more detail in the next section).  However, part of the reason may be just plain semantics.  I have found that when you ask a CSP business development executive if their clients are asking about eDiscovery, the answer will be no.  However, if you change the question and ask if their clients are asking about information governance, compliance, business analytics or something even simpler like universal or federated search, the answer may be yes.  This subtle difference is confusing to most in the eDiscovery market and therefore it is no wonder that it is very confusing to the CSP market.As In indicated in my Blog post on September 15, 2011,titled, "Evolving from Information Governance to eDiscovery", I believe that eDiscovery is actually part of a larger market called information governance (IG).  And, as Sunil Soares, the Director of Information Governance within the IBM Software Group indicated in a blog post on April 11, 2011 titled, Why Information Governance is a Market, Not Just a Process, “information governance is like the blind man and the elephant. Depending on which part of the elephant you touch, people define information governance to include master data management, data stewardship, data quality management, metadata management, business glossaries, information lifecycle management and security and privacy.” 

I would actually include several other components as integral parts of IG in pursuit of my premise that if Gartner predicts that the eDiscovery market is going to reach $1.5 Billion by 2013, the information governance market is going to be many times this size.  Or, in other words, more than likely the largest  software and services market on the planet in the next five (5) years (Note that HP paid $11 Billion for Autonomy to play in the IG Market).

So, maybe CSPs need to think of eDiscovery as Information Governance and concentrate on the fact that information governance is potentially the single biggest market on the planet in the coming years?

CSP CLIENTS DON'T UNDERSTAND eDISCOVERY
Another interesting fact emerged from my recent study on eDiscovery in the CSP market.  It appears that most CSP enterprise clients don't understand eDiscovery.  Come to find out, a very high percentage of the standard CSP client base are actually "renegade" business units with global 2000 enterprises that were unhappy being held hostage by their IT organizations and decided to outsource their information management to a CSP.  Unless the business unit in question is the legal department (which is highly unlikely), the stakeholders within these units have no idea what eDiscovery or information governance is or would they know to even ask their CSP if it can be supported if the need were to present itself.

After further investigation into this market dynamic, the story actually gets even more interesting.  If one of these global 2000 enterprises is sued and is presented with a request to produce information (ESI) or some governance regulatory entity asks for proof of compliance, the request is normally handled by the General Counsel (GC) and legal department.  More than likely the first place the GC will go is to the IT department asking for its help in producing the requested data (Please note that most global 2000 enterprises are now relatively adept at the process of internal eDiscovery).  However, the GC may not even know to ask about the data (ESI) from the renegade business unit and if they do, the renegade business unit is not going to know how to comply with the request and their IT department is probably not going to help since they are no at all happy that they went to a CSP for IT services in the first place.  Given all of this, the business unit executives or the GC may call the CSP and ask for help.  However, since the CSP doesn't really understand eDiscovery, they aren't going to be much help.  Basically, at this point the entire eDiscvoery process can get pretty ugly.  The GC is under a legal obligation to respond (i.e. Federal Rules of Civil Procedure) under a fairly limited time frame with financial and other sanctions are real possibilities for non-compliance with the request.

THE PERFECT STORMSo, unfortunately, what I have determined to be the current status in the Cloud Service Provider (CSP) market is the perfect storm of neither the CSP or the CSP's client base understanding the need for eDiscovery.  However, there are solutions and there is hope.

THE ROADMAP FOR SUCCESS FOR CSPs
The roadmap to success for the CSPs is actually not that complicated.  CSPs need to get serious about providing eDiscovery and/or information governance as a component or their standard offering.

In a January 8, 2012 blog post titled, "Cloud Computing Architecture and eDiscovey", I stated that "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)... 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."

CSPs can contact me at cskamser@ediscoverysolutionsgroup.com for additional insight on which technology vendors currently have or are about to announce eDaaS offerings.

THE ROADMAP FOR SUCCESS FOR CSP CLIENTS
The roadmap to success for the CSP clients is also actually not that complicated.  First of all, enterprise business unit stakeholders need to add eDiscovery and Information Governance to  their list of requirements for the CSPs.  And, they need to seek out and collaborate with their legal and IT departments in regards to a plan to follow when an eDiscovery and/or compliance event occurs.  It just make sense and its not complicated.

Enterprise stakeholders that are contemplating or already working with a CSP can contact me at cskamser@ediscoverysolutionsgroup.com for additional insight on what to expect from their CSP and what best practices to follow when an eDiscovery and/or compliance event occurs.

CONCLUSION
Both the cloud and the eDiscovery / Information Governance trains have left the station and therefore it is no longer an option for either Cloud Service Providers or their clients to ignore the legal requirements and business benefits.  The current practices to address the issues of eDiscovery or Information Governance are ugly at best.  However, the roadmap for success is not that complicated.  And, the rewards for both the CSP and their clients is well worth the investment.

Labels: Cloud Service Providers, CSPs, Early Case Assessment, eDiscovery, Federal Rules of Civil Procedure, FRCP, Legal, Litigation

posted by Charles Skamser @ 10:59 AM 0 Comments

Navigating eDiscovery in the Cloud Shouldn't Be That Difficult

In a follow up to my Blog post titled, "eDiscovery in the Cloud: The Sky Is Not Falling", this Blog post is dedicated to the premise that successfully navigating eDiscovery in the cloud is not as complicated as many are indicating it should be or as complicated as many are making it.

Successfully navigating the brave new world of eDiscovery in the cloud is really just a matter of education and a willingness to move beyond the status quo.  There is no doubt that if you don't pay attention, you and your team will perish on the rocks. However, don't pass on taking the eDiscovery in the cloud journey because it is too dangerous or give up before you at least make an attempt to learn how to save your ship.

First of all, in case anyone missed the memo, the cloud train has left the station.  As an example, independent research firm Forrester Research predicted in a research report published earlier this year titled, “Sizing the Cloud” that the global cloud computing market would reach $241 billion in 2020 compared to $40.7 in 2010.  So, more than likely, whether you want your data in the cloud or not, it is moving quicker than you think.  And, as an end-user, unless you have some kind of cloud storage phobia, it really shouldn't matter that much.  The real debate doesn't start until you couch the question(s) about cloud computing in terms of what happens when your have to perform the delicate and often times messy operation of eDiscovery in the cloud.  If you are a glutton for punishment and like to dwell on all of the negative things that could possible happen in the life then I encourage you to read "The Promise of the Cloud Meets the Obligations of E-Discovery", published on the Law.com website on October 12, 2011 by Brendan M. Schulman and Samantha V. Ettari.  This article does a great job of indicating that the sky is falling and that we are all doomed.  However, as I indicated in the my response to this piece, "cloud computing has already made it and most of us are just fine, eDiscovery in the cloud and all!!"  But, the devil is always in the details and therefore what does this mean in practical terms?

Further, please note that if you are currently doing a bad job of eDiscovery in general, you had better read the Schulman and Ettari article as the sky is going to fall if you attempt to perform eDiscovery in the cloud under your current practices. Once you have completed reading that article and if you still want a road map for successful implementation of eDiscovery in the cloud, come back and finish reading this blog post.

What is eDiscovery in the Cloud?To properly perform eDiscovery in the cloud,  you first have to understand what it is and, probably more importantly, what it is not.  The current crop of litigation technology vendors have done a great job of confusing the market in regards to eDiscovery in the cloud.  However, I believe that over the next 12-18 months, the market will become much more educated and some amount of consensus will begin to form regarding a more realistic and concise definition of eDiscovery in the cloud.

eDiscovery in the cloud is NOT uploading all of your potentially responsive ESI to a litigation service provider's data center and then accessing that ESI via the Internet to perform searches and document review.  That may be Early Case Assessment (ECA) or document review delivered under a Software-as-a-Service (SaaS) model.  But, it is not eDiscovery in the cloud.

Likewise, eDiscovery in the cloud is NOT manually collecting big chunks (that's a technical term) of potentially responsive ESI from your cloud provider and the performing eDiscovery with that ESI the same way you process ESI from your corporate network or from unconnected desktops and laptops (BTW - I am in the process of investigating the nightmare of collecting ESI from your cloud provider and plan to author a Blog post of my findings before the end of the year.  So, if anyone has any input, send it to me and I will consider including it in my post).

eDiscovery in the cloud ultimately means having a virtual eDiscovery process that actually runs in the cloud right alongside of your cloud storage and allows you to perform, Early Case Assessment (ECA) including First Pass Review, possibly preservation and legal hold management, definitely forensically sound collection and the generation of an industry standard load file and/or full on document review and production.  In addition, eDiscovery in the cloud also means that you can operate these processes remotely through an Internet based user interface and don't have to have operational bodies physically inside the cloud data center(s) to perform any of the normal magic that is currently required by many of the legacy hosted eDiscovery platforms. 

Further, eDiscovery in the cloud should also include what I am going to call (for lack of a better term at this point) federated eDiscovery to enable an organization to "perform eDiscovery" on data no matter where it resides.  Currently, users that are supported by competent IT organizations, don't have to worry about where ESI is physically located.  Therefore, eDiscovery professionals shouldn't have to worry either.  This would include ESI behind the corporate firewall, housed with different cloud service providers or housed with the same cloud service providers in different data centers potentially in different countries (don't get me started on the debate regarding the legal issues with moving ESI in and out of countries as that is the topic of a future Blog post). Please note that I am not oblivious to the challenges of moving large amounts of data around.  However, we all might be surprised to learn that class 5 rapids have been successfully navigated in other industries.

Is this Definition Realistic
This definition of eDiscovery in the cloud may sound like something that only Scotty, the engineer from the Star Trek Enterprise, could cobble together with technology from the next century and a good amount of duct tape.  However, the technology exists today and is ready to be utilized with little or no duct tape required.  Therefore, the only real speed bumps on this journey will be convincing the cloud service providers to install the appropriate eDiscovery technology as a standard part of their technology stack, enlisting a new generation of eDiscovery consultants to support the development of best practices for eDiscovery in the cloud and finally to show the market that eDiscovery is no longer a reason to NOT move your data to cloud.  I realize that these are not insignificant roadblocks.  However, providing eDiscovery as a standard part of it's technology stack is a homerun for cloud service providers and the associated services represents a blue water/green field market opportunity for eDiscovery consultants and possibly service provides. Therefore, resistance should be minimal and buy-in should be quick.

What's Next?
In the coming weeks I will be releasing my initial list of eDiscovery technology vendors that can support my vision of eDiscovery in the cloud along with an initial overview of the best practices.  If anyone has any input that you believe should be included in these upcoming Blog posts, send them to me and I will consider including them.

In the mean time, if you are concerned with moving your data to the cloud and are hesitant because you are concerned about eDiscovery or if you are currently faced with the daunting task of extracting your ESI from a cloud service provider, contact me as I can help you successfully navigate your way through this paradigm shift.

Labels: Cloud, Cloud Computing, Cloud Service Providers, CSPs, eDiscovery, eDiscovery Best Practices, Electronically Stored Information, ESI

posted by Charles Skamser @ 2:03 PM 1 Comments