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Cloud computing has become white hot.  Television ads from Microsoft, IBM, and others tout their cloud efforts.  Google and Apple and investing billions in their video and application cloud services.  Apple is even going so far as to create an “App Store” for Mac applications.  Microsoft has been very aggressive in their use of hosting SharePoint and other applications in their cloud infrastructure.

For federal agencies, cloud has become the big push thanks to Vivek Kundra, US CIO.  Kundra has made cloud the centerpiece of his efforts going so far as to develop a cloud-centered app store for federal agencies and publishing a report on cloud computing in the public sector.  http://www.cio.gov/pages.cfm/page/State-of-Public-Sector-Cloud-Computing

Vendor like SpringCM, Nuxeo, and others are taking advantage of this.  (Full disclosure: my company is deploying SpringCM deployments for various government agencies.)  Government and commercial firms are faced with the challenge of uncertain budgets and the need for quick implementations.  Cloud solutions, especially for ECRM, address both of those.

But ECRM in the cloud poses certain additional challenges.  Who is responsible for the data?  Do the processes of the cloud vendor satisfy legal and regulatory requirements?  Who pays for the cost of discovery?  Because price is so important in this market, the cloud ECRM vendors tend to focus on being robust and scalable  - sometimes at the expense of other features.  Just as there are a wide range of traditional ECRM vendors to sell software licenses, the cloud vendors will all have different capabilities and price points.

Cloud-based ECRM holds certain challenges for both vendors are end-users.  For traditional vendors, the model of buying software is rapidly changing and cloud is certain to prevail.  That means vendors who rely on economic pricing models that get large portions of their revenue prior to implementation will have to change their business models to move to cloud or run the risk of being overwhelmed.  A few smaller vendors have already begun this transition (Hyland being an early traditional vendor who began to diversify several years ago), but the large vendors have made tentative bets on cloud.  If they wait too long, they could become irrelevant.

For end-users there are the usual functionality issues and additional questions regarding security, certification, service level agreements and more.  But one area of critical concern is how vendors are free to change their agreements at any given time.  Just as Google and Facebook control vast amounts of data, so do the cloud ECRM vendors.  If your vendor changes their policies to something that is unacceptable to you, there is a real dilemma (and cost) for transferring the content to a new system.  Most companies will just go along.  (When Google changed the terms for YouTube videos not many people took their videos down despite having several other free hosting choices.)  That also means that industry norms can change – and have a legal implication.  If someone using Google Docs says they keep everything and enough people are doing the same thing, do they become the legal baseline instead of the company following a rigid “accurate, reliable, and trustworthy” records management plan?  Such changes in the legal “norm” are not uncommon.

Ultimately it could mean that organizations do just keep everything.  There is a very real argument to made that the costs of records management can exceed the risk mitigation benefits.  In one project, we talked with the end users about various companies that had higher discovery costs or unintended legal consequences.  Instead of being concerned, these end-users took a different view and thought that all information is good and that only bad organizations gets punished by having information that proves they behaved wrongly.  Records managers know this view is misguided, but if it becomes the prevailing view then look for the norm to be to keep everything and ignore records management.  Add the cost advantages of cloud and lack of controls to manage the content and cloud computing really could bring fundamental changes to the ECRM industry.