Does kCura’s Cloud Software Signal a Shift in Strategy?

May 31, 2016, 9:38 PM

Earlier this month, Chicago-based kCura announced it plans to release a new version of its flagship e-Discovery software, called RelativityOne.

Under the new system, the company’s partners — who provide e-Discovery services, such as data hosting, and review by licensing kCura’s software — will be able to store data in the Microsoft Azure cloud, as opposed to setting up their own data center.

The latter requires kCura’s partners to lease physical space, buy hardware such as servers and provide security – services for which many partners charge a premium to companies that need e-Discovery services. Just the hint that those revenues may disappear soon has prompted concern from some kCura partners.

Examples of partners include large companies like DTI and Kroll Ontrack, smaller shops and everything in between.

In interviews with Big Law Business, several competitors, as well as kCura clients, wondered aloud whether kCura’s move into the cloud portends a change from its current strategy of licensing its software to partners who provide e-discovery services to corporate legal departments. They asked: Is kCura plotting to expand beyond the e-Discovery software market into the much larger e-Discovery services market (which includes document review and data hosting)?

No, kCura’s CEO Andrew Sieja said.

“This is a long term play for us,” said Sieja. “It’s the way that software is being delivered today and in the future.”

He said the old option will still be available, but the cloud option will eliminate some of the headaches of scaling for the company’s partners that do not want to build their own data center.

The company hasn’t yet said whether partners will be able to resell data hosting, under the cloud version, or if kCura will host data directly in the cloud version.

The company issued the following statement: “We’ve been working with our channel partners to figure out the pricing and licensing details of RelativityOne, which we will be sharing with our broader user community soon.”

Meanwhile, some competitors have been evangelizing about the cloud for years.

“It allows you to scale,” said Aaron Vick, chief strategy officer at cicayda. “I don’t care if you have 100 terabytes of information. I don’t have to buy 100 servers, all I have to do is put it in the cloud.”

Writing software that can dynamically scale also allows you to take advantage of the combined processing power of multiple servers, in order to download large documents faster, said Vick.

Still, some of kCura’s partners said that corporate clients prefer the old option, Relativity, because it keeps their data in private data centers, and out of the cloud.

“There’s always going to be those companies that want to know where their data resides, come out and see the facilities, have a say on how that data is hardened,” said Ken Graulich, a vice president of ProSearch Strategies, a Los Angeles e-Discovery partner.

Graulich said some of those companies won’t want their data residing with an Amazon Web Services or Microsoft Azure.

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