By Peter Owen (pictured), founder of Lights-On Consulting

The term cloud computing has been around for a long time, being popularised with Amazon releasing its Elastic Compute Cloud (“EC2”) as far back as 2006. The world has changed a lot since 2006! The press and pundits have, as usual, hyped it up but little came of it for five to seven years leading to the trough of disillusionment after the peak of inflated expectations. Now however, there is money to be made, so things are hotting up!

The world has not asked for cloud. It is being driven by vendors as it offers them the ability to manage their software better, support only one or two versions, force upgrades, tie people in to repeating revenue with no licence in perpetuity and increase the financial multiplier for the vendor by many fold. There have been many vendors in the stampede but the Microsoft and Amazon
buffalos have charged through to the front and are now leading the herd. Its no longer the choice of the buyer, its market led. It is inevitable and inexorable.

Whilst the drivers are less than idealistic for buyers, there are clear advantages to cloud. The vast majority of law firms cannot afford people of a level or with the skills to fight organised cyber crime or defend against nation states. We need the help of large companies and super giants to defend our assets and the security position has now spun 180 degrees where it may now be far safer to have your data in the “anonymous cloud” guarded by giants rather than sitting on your servers with a large IP address “sign” saying “Here’s my data” guarded by little Johnny!

The time of technology enabled services is finally upon us and is gaining momentum. Tender questions like “Do you have a client portal and deal room?” that were typically treated with humorous disdain will, and are now, changing to serious questions that are beginning to affect buying behaviour of both B2B and B2C prospects.

Computing power and storage for a large one off discovery project would previously have been uneconomical for in-house, but now cloud rental, burst and decommission options for compute, AI applications and storage make it possible for firms to use internal resources and this will, in turn, affect market dynamics. Firms can now spin up a tiny test bed of a client facing product and close it down if it fails to sell with little cost. Conversely, if sales grow, they can scale it up as required so the dreaded barrier to R&D and innovation is lowered to a level that even law firms may be tempted.

Just as IT departments can spin up solutions, so now can fee earning departments. They don’t need IT now, they can go direct and hide it in other budgets, contracting with cloud suppliers and building solutions with just a few off-site, clandestine meetings following repeated “No” responses from the IT department to previous requests.

Infrastructure can now be managed by others and purchased as a service. So, what happens to the IT department? Well, it disappears unless it radically changes! If saying “no” means customers go elsewhere, then approaches (and controls) have to change. Infrastructure, DBAs and network teams will inevitably dwindle and knowledgeable buyers, financially savvy 3rd party management, business analysis, project management and customer account management will have to grow representing fundamentally different dynamics in the IT–business relations.

Cloud computing is both the biggest threat and the biggest opportunity in IT since the invention of the PC. So, ask yourself, are you a mainframe lover or up for change? Cloud is no longer the fluffy white stuff you can fly though, it is bringing a deluge of change to your land! And if the rain is coming, you might as well take the Gene Kelly approach to it!