In Q4, Relativity is dropping the per user license fees (~$100/month/user) for new and renewing RelativityOne customers. They are also rolling the Relativity Legal Hold into the existing data tier license model. I asked Relativity what is driving this change and how the market should interpret it ahead of the announcement.
Relativity indicated that the primary drivers were the rapid growth of RelativityOne law firm and corporate customers and Relativity’s long-term vision beyond eDiscovery. The user license model was a barrier to customer innovation and non-litigation usage of RelativityOne for scenarios such as IP management, virtual data rooms, corporate data maps and more. It better supports customer’s using RelativityOne for litigation adjacent cyber breach responses, data subject access requests, internal investigations and 3rd party subpoenas. Remember that RelativityOne has been available on the Pay-As-You-Go basis for over 18 months now.
Relativity was an early proponent of the Microsoft customer-channel driven innovation model. I clearly recall a 2010 briefing on Relativity Dynamic Objects (RDOs) where Andrew Seija riffed on his vision of Relativity as a development platform for information governance and other data management markets.
Twelve years later Relativity is recognized as Microsoft Security ISV of the Year and has launched a deeper integration with Microsoft Purview eDiscovery. User licenses inhibit customer creativity and the expansion of access by non-matter users. Just this week I encountered a client using RelativityOne to support small property transactions. That scenario is exactly what this license change seems to be aimed to encourage.
Before we all get too happy, we need to remember that major changes take time and can be complicated by long term managed service contracts in the Relativity channel. User licenses will not just vanish for existing direct and channel customers on October 1st. Relativity service partners can and probably will stay on the existing user license structure on existing matters and contracts. RelativityOne direct customers will have to either wait for a renewal or ask for an early renewal on the new license structure.
Overall I see this as Relativity responding to the evolving market demands and not resting on their eDiscovery laurels. It will be interesting to monitor competitors to see this this shot across the bow forces the broader death of user fees. As always, let me know your thoughts.
Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a free 15 minute ‘Good Karma’ call if he has availability. He solves problems and creates eDiscovery solutions for enterprise and law firm clients.
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Sure, no more user fees but costs will go up significantly. There’s no free lunch.
We shall see. I have clients about to negotiate the change and will be interested to do the current vs. new contract assessment.