DiscoveryMining

Maybe it’s the heat wave that is moving across the usually moderate San Francisco Bay Area that has got me in a certain mood today, but when I read the recent post on the Clearwell blog attacking Kazeon, it struck me as misplaced. The post refers to the boilerplate on a recent press release put out by Kazeon, in which Kazeon claims they can deliver in-house processing of ESI in preparation for eDiscovery for as low as $4.30 per Gigabyte. The post questions what you can get for only four dollars and some change then compares it to seeing a 20 cent per gallon gas sign saying …“it may be cheap, but it’s probably not gas you’re getting.”

I don’t see anywhere in the Kazeon press release where they claim a client will get every service listed for the $4.30 price point, yet this conversation got me thinking about setting prices and how we can look at a case in its entirety rather than only one aspect of a very complicated process.

It’s going to happen; the cost to process data will drop. Some vendors are throwing it in for free, others charging rock bottom prices as the bait to get clients in the door. Whatever the real price, there is a cost to processing data. CPU cycles, power, and real estate add to the total cost of “processing data”. Start adding the ‘special sauce’ and you can begin to see how the costs can rise. Processing data is a commodity, just like tiff creation. You need to follow the standards and there are big implications should you not. But let’s face it, processing is the step we all use to PREPARE data for loading into a review tool. All of the analysis, inventory, and de-duplication should be done by a responsible vendor and the value added should be the quickness of both processing and getting it all into a review platform. Each bullet point mentioned in the Clearwell post outlining the basic goals of robust processing should be happening already by every vendor who is working with AmLaw 100 firms or Fortune 500 corporations.

Let’s say you can process for $4.30. Where does that leave you? Do you have images or a loadfile for a review tool? How long did it take to process…hours, days, weeks? Kazeon was touting their Information Server and the efficiencies it delivers in only one aspect of E-Discovery. I say let the cost fall. Discovery Mining sells mostly around the value we bring to the table and never, other than speed, do we sell on the fact that we can process data.

So what is the rock bottom price when factoring in all the fixed costs of processing electronic data? One of the companies I most admire, Amazon, has a great model. Amazon, through their innovative Amazon Web Service, can get you an instance on the Elastic Compute Cloud. This is a web service that provides resizable compute capacity in the cloud, designed to make web-scale computing easier for developers. Depending on the amount of time, you can probably process a Gigabyte of data for $1.00. That’s a double cheeseburger on the dollar menu.

So there is an example of a low-end price point due to efficiencies that Amazon has built into its service, and which, by the way, is not even being touched by Google. Does that help us figure out what the right price is for processing?

The market and the customers would be better off if vendors were competing based on the total project, or total cost of product ownership, or value of the platform solution. That is, using the value there to save clients hundreds of hours of review time, and therefore money. Who cares about some silly line item? It’s frustrating to know that no matter what price you put in the proposal, it will be criticized. As I have mentioned before, it’s time to start looking at the entirety of the case and all of the efficiencies vendors can bring to the table, not just one commoditized aspect of a very complex process.