One may perceive DISCO’s comments about the slowness, unintuitive experience, and outdated technology of legacy competitors like kCura contentious, competitive name calling. Any perceived hostility by DISCO is unintended. In marketing, it is often difficult to describe nuances in technology innovation without sounding aggressive in its comparison (recall the Apple vs PC campaigns). Luckily, if we look in the rearview mirror, it’s easy to see patterns that emerge; patterns that can shed objective light into the present and future trajectory of legal technology.
The adoption bell curve
In his book, Crossing the Chasm, Geoffrey Moore discusses the idea that products move along a bell-curve: from an innovative stage, through to a majority position, and finally to a laggard position.1
Let’s take a look at the consumer cell phone market, for example. Circa 2000, the Nokia phone was king of the hill. We all enjoyed playing Snake on our Nokia 5130 and the Motorola flip phones were on their way out.
Fast forward to present day. Give an iPhone owner a Nokia phone and they would say the technology is slow, unintuitive, and outdated. This isn’t an insult to Nokia. The reason we don’t use Nokia phones anymore is because they failed to innovate against new competition.
Are all companies doomed to become irrelevant, in time?
Not necessarily. To illustrate the primary reason companies fail to innovate, Guy Kawasaki tells the story of ice. Originally, ice was sold through a harvesting business. In the early 1900s, during winter ice sellers would go to a frozen body of water, cut out large blocks of ice, and then sell it to consumers in town. A few decades later, ice 2.0 – the ice factory – was created. With the ability to freeze water centrally, at any time, the factory meant that you could get ice anywhere (not just in cold climates) and anytime (not just in the winter). Ice harvesting became obsolete. Fast forward another few decades, and ice 3.0 – the refrigerator – is developed. The ice factory becomes a legacy, outdated business model. In each case, the legacy solution was so focused on their existing product that they failed to innovate. As Guy notes, they were a ‘slave to the revenue’.2 It would not have mattered how much you improved the efficiency of the previous solution because the entire market had shifted.
The technology adoption lifecycle is true for any industry. Take a look at ediscovery. Circa 2007, the dominant player in the market was Concordance. A new company in Chicago – kCura – introduced an innovative (at the time) product, Relativity.
Jump forward to today. Again, we see that shift in the marketplace where Concordance has moved into the laggard position, Relativity has moved to being more of the majority tool, and a few, next-generation tools have become the innovators in ediscovery.
Everything old is (not necessarily) new again?
Realistically, the only way a legacy company can beat the adoption curve is to be willing to start fresh, abandoning the old model. Companies rarely do. However, there have been a handful companies who have broken the cycle and jumped successfully to the next curve. Apple chose to cannibalize the iPod in favor of the iPhone. At their core, Apple wanted to democratize computers; they wanted to bring computing power to everyone. Because their meaning went beyond a product, this allowed them to move forward with the iPhone, even at the peril of their wildly successful iPod.3 Similarly, Netflix killed their mail-in DVD service by introducing the streaming of TV and movies.
Ediscovery solutions such as Everlaw and DISCO are gaining momentum in the market due to a new paradigm shift – cloud-native computing. While kCura has hurried to announce the development of RelativityOne, instead of starting fresh they have ported the old infrastructure to a new location. Apple did not create cell phone technology for the iPod. Similarly, cloud-enabled applications will never function the same way internally as cloud-native solutions and will not be able to keep pace with market demands. While it may be easier to change the existing application (on-premise Relativity) to meet demands such as Software as a Service delivery (cloud-enabled RelativityOne), “in the long term it will be harder to maintain. New technologies (social media, mobile, sensors) continue to appear and it is becoming more important to integrate them. Doing this will require additional and continuous effort and may exponentially increase development and supporting costs” for cloud-enabled software.4 KCura and other legacy models are now four years behind cloud-native software, slaves to the revenue of their original model.
With the rate of innovation moving forward rapidly, cloud-native infrastructure is the only operative standard that can keep the pace. The market standard will inevitably be one of today's next-generation innovators.