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Gray Rule
January 2017 | VOLUME 18, NUMBER 1
Gray Rule
Cloud Choices Mature: What Works for the New Legal Business Model?
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Cloud Choices Mature: What Works for the New Legal Business Model?By Keith Lipman, President, Prosperoware, Bala Cynwyd, PA
What are the risks and rewards of moving from an on premises to an in the cloud strategy for serving up firm applications? Cost savings seem obvious, but there are numerous factors to consider. In the end, control over the user experience may be the most critical factor in making the decision. Read on to understand the key elements in evaluating the cloud at your firm.

Experience Matters

"The cloud," as a term, suffers from overexposure; it merely describes a delivery mechanism for software that would otherwise be locally installed. Depending on your own business's capabilities, accounting preferences, or security posture, you may choose to run a system on premises or via a provider who hosts it for you "in the cloud." There are persuasive reasons on either side of the debate.

With a cloud offering, you may never need to worry about who's looking after infrastructure—the physical systems—assuming your chosen vendor is respectable and does a decent-enough job of it; you are trusting the provider to secure, maintain, backup, and ensure continuity for the systems and data. If that alone isn't compelling, for many, it's trading-in the upfront CapEx (capital expenditure) in favor of a monthly OpEx (operating expenditure), which is preferable for many types of businesses including those who have variable growth and need the ability to scale up and down and those who don't have the cash.

With an on premises system, firms own and secure their data, can choose how to customize or manage the system, and, in essence, maintain full control over where the data resides and who has access to it. As well, it may be an advantage to pay an upfront CapEx that can then be depreciated and amortized; this is typically the preferred accounting method for many cash-based businesses, such as professional services organizations operating as partnerships.

Both options require you, as the ultimate owner of the information and the one who is relying upon it to run a business, to ensure that everything is being done to meet the business and regulatory needs for your operation. A business is not absolved of that responsibility, or, more importantly, the liability, merely by virtue of assigning that function to an external provider.

Nevertheless, at the end of the day, regardless of which option is chosen, the most important aspect of any software—no matter the delivery mechanism—is the user experience (UX). Here's why.

Maturity Matters

User experience is about more than just user interface (UI). It considers accessibility, workflow, and other aspects of how users interact with a product.

When it comes to software selection criteria, UX should always come first with features a close second. Users need an intuitive and enjoyable—or, at least, not painful—UX. A poor UX will absolutely hurt adoption; they'll use it unwillingly, at best. Poor software adoption can negatively impact the very KPIs the organization aimed to improve in the first place.

As it happens, we've now reached a level of maturity in cloud offerings that further refines the discussion: the benefits of shared or "multi-tenanted" cloud versus nonshared or "single tenanted" offerings, which affects UX. Office 365 is a market-dominant example of a shared/multi-tenanted cloud with 60 million users worldwide and adding 50,000 users per month. Net Documents, a leader in cloud-based email and document management in the legal space, is also an example of a multi-tenanted cloud, boasting hundreds of thousands of users, and gaining. By contrast, examples of mature single-tenanted systems include iManage and Microsoft Dynamics CRM. There are pros and cons to each architecture.

A nonshared cloud means better control of upgrades. In a typical, multi-tenanted environment, upgrades cannot be rolled out individually to customers. They are delivered en masse, at the behest of the provider, not controlled by the organization. Unfortunately, there have been numerous instances of multi-tenanted cloud systems being upgraded and negatively impacting every user. In a single tenant cloud, organizations have greater control over rolling-out upgrades and the potential impact of system changes. As a side note, it's typically more cost-effective for providers to deliver multi-tenanted environments; while this should then translate to lower pricing for users, it does not necessarily.

Many firms have, instead, chosen to deploy their own systems within the nonshared, Microsoft Azure cloud, which enables firms to build or install applications and run them entirely on Microsoft's infrastructure—protecting their user experience by remaining in control of upgrades and other rollouts. Many vendors offer this option, including Prosperoware, with its Umbria Cloud, which delivers the reliability of a robust infrastructure while maintaining an element of control.

Cloud Support and the New Legal Business Model

The law firm operating model is evolving. Firms have become more dynamic in how they serve their clients and more agile with their system adoption and use of technology. In a market full of accelerating mergers, acquisitions, and lateral moves, which also includes cutting and shifting of resources at equal pace, it would certainly make sense to leverage the flexibility of a technology model which can readily scale with the firm—both up and down. To be successful today, firms rather need to focus more on people and process and on training more than just implementing solutions. What they don't need to focus on so much anymore is the plumbing—infrastructure. The maturity of cloud offerings means firms now have the benefit of choosing which systems to use as well as how and when to use them.

When all the hype around "the cloud" started a few years back, there was little recognition of the fact that, in the long term, it was actually a more expensive proposition. The cost to own and run comparable systems internally was cheaper. Cloud options only made sense for those with inadequate datacenters, poor redundancy or disaster recovery plans, or little money to invest up front.

Today, mature cloud offerings can be an economically advantageous play, whether shared or nonshared; the considerations now are focused on UX and platform control. We've reached a point where good, robust offerings are price competitive and can deliver the best of both worlds. It makes sense to host systems in the Microsoft cloud for security, redundancy, and flexibility as well as greater control over end user experience—which, at the end of the day, matters.

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