Cloud Is About ‘Cost Predictability’ Not Cost Savings

The thinking around cloud computing has matured significantly with regard to cost. There was a time when ‘cost savings’ might have been the carrot to dangle in front of senior partners to incentivize a move to the cloud – but today, the real challenge for law firms is ‘cost predictability’.

If a CIO is trying to build a business case for moving parts of the firm’s IT architecture to the cloud, the first question they’re going to get asked by senior management and executive leadership is: ‘How much is this going to cost in a year? ‘ followed shortly thereafter by ‘How much is it going to cost in two years? ‘ and ‘Is this going to be a cost that just goes up and up over time that we can’t predict?’

In other words, ensuring there aren’t any unpredictable peaks in cost is the primary concern rather than trying to minimize IT expenditures above all else. This concept of choosing cost predictability over cost savings actually has several historical echoes in the tech world.

The Streaming Similarity

Remember the early days of audio and video on the internet? When it first started in the late 1990s and early 2000s, many people would go to free streaming sites to watch movies in order to save money. Likewise, free download sites like Napster were the place to go for audio. Piracy, unsurprisingly, was a major problem.

Today, the monetary cost of consuming content is no longer the primary concern among consumers. We all watch content on platforms like Netflix and Amazon Prime and listen to audio via platforms like Spotify or Apple Music even though there is a cost involved. We’re willing to pay a predictable monthly subscription fee because it makes content simple to access; the quality and experience we get is excellent; and there’s very little friction involved in the entire process.

In other words, rather than trying to save money, people are more concerned with availing themselves of a valuable service at an appropriate and predictable cost. This same shift in mindset has occurred around cloud computing.

Keeping An Eye On Cost

So, how can firms ensure that they get the most out of their move to the cloud – that the service remains valuable while the cost remains appropriate and predictable?

First task is to understand the cloud offering and how it is priced. For example, cost can be based on compute cycles or data volume. It might also be based on the number of features that are enabled or not enabled in that cloud platform (think here of a threat monitoring service or any other feature that can be activated on a per user basis). Cost could also be determined by the number of users – or even the different types of users – that you have accessing the platform.

The important part is that all of these discrete factors enable firms to put a precise finger on cost and accurately predict what it is going to be based on how the cloud offering is structured.

Note, however, that the initial ‘purchase’ and move to the cloud is just the first part of the equation. There is work to be done on an ongoing basis with regard to keeping track of the cloud service and the value that it is providing.

Firms should ask themselves: are our professionals actually using it on a regular basis? Are we getting the best usage out of the new features that are being added? On the whole, is it still serving an important function and providing value to the business?

By making a point of having annual or biannual reviews of their cloud purchases that address these very questions, firms can address those issues with confidence and make sure their money is still being put towards the right products and platforms.

Same Price, More Value

Ultimately, firms shouldn’t approach a move to the cloud as a cost saving exercise, because it generally isn’t. It tends to be cost neutral.

Really, the move is about the additional value that cloud provides the organization: the simplicity, the ability to free up the people who are currently maintaining an on-premises solution, the added layers of security, the greater availability and reliability, and so on .

Put another way, firms might spend the same amount of money on cloud as they did maintaining an on-premises solution, but in the process, they gain access to a premium tier solution offering a higher level of service.

There is a cost involved in the move to cloud, but it is a predictable cost, and for the value provided, it is well worth it. Increasingly, this is the mindset that firms have adopted as they chart a path forward for their organization.

About the author: Paul Walker is EMEA Technical Director at iManage.

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