Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2011-11-29 09:30:56  The cost of storage has come up in several recent engagements for firms and corporations. I started thinking about while we were brainstorming in preparation for our recent webinar on enabling expiry on archives. Calculating a Return on Investment (ROI) on a legal hold initiative includes the recovered cost of storage when you can eliminate 40-80% of your non-records. It was pointed out that storage costs have dropped so much that eDiscovery costs have superseded them as the primary motivation for cleaning house. My panelists trotted out several figures ($/GB) from well known analysts for the Total Cost of Ownership (TCO) of storage. I feel that Amazon S3, Rackspace and other global cloud services have clearly set the market price on storage at less than 15¢/GB. Yep, that’s right 15¢/GB. I can recall early eDiscovery hosting RFP’s at $30-50/GB/Month for online storage. That was just for storage, but it made an easy argument for in-house systems when many matters can run for 2-3 years or longer. Hosting providers generally lead with their processing and review offerings and tend to bury the ongoing storage costs deep in their bids, even though these recurring costs can represent the highest margin item on the engagement.I have recently seen firms and corporations seriously considering all of the different ways that they can move eDiscovery technology and collections to the Cloud. Even some of the largest litigation firms have realized that supporting the equivalent of a captive service provider in-house may not be the ideal solution. Firm IT departments can struggle to meet the burst capacity storage and back-up demands of modern cases. If we put aside the software and administration questions for now, public or private Cloud storage costs seem far below onsite storage costs over a typical 3 year depreciation cycle. A well provisioned server with 10 TB of Direct Attached Storage (DAS) with all the proper operating system and disaster recovery could run a firm $60k. There are a hundred different ways to bring storage in house, so I am going to stick to the kinds of top-of-the-line infrastructure that dominate major firms server farms. That stars the in-house cost at $2,000/year compared to $2/year for S3 (plus access and export bandwidth charges).Everyone is nervous about losing control of their sensitive corporate and client data when it moves to the Cloud. Recent revelations by Microsoft Office 365 regarding secret Patriot Act subpeonas raised the old ghosts of privilege waiver and EU privacy violations. All of this can be dealt with if your ESI is encrypted and only you have the keys. The problem is that remote (Cloud) software and encrypted storage require investments in process, personnel and frequently specialists. This can be a hidden cost of managing the potential risks of migrating your eDiscovery to the cloud. I do not believe that these costs outweigh the staggering monthly costs that I have seen from many older hosted review platforms, but law firms practice law rather than IT. So review the storage costs on any matters that are being hosted for you and try to decouple the cost of the review software, project management, tech time and more from the actual cost of storage. Can you blame your providers for still charging the old storage rates if you have not examined the alternatives? Don’t wait for your clients to start challenging the bills when you can get ahead of the curve. The services, technology and relative security of your provider may very well be worth the cost, but you should be able to explain that to a corporate CIO who has recently entertained an Amazon S3 bid.

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