Hyperscale Group Predictions for 2024
Happy New Year all. Given the pace of change in the market we thought it might help to share a few predictions for 2024 and beyond:
Firms will question and revisit their tech architecture and licencing models given the increase in Gen AI and Microsoft dominance. Priorities will change as will the ability to find insights. Does every lawyer need access to every system or just interfaces to some linked via the Power platform?
Suppliers who have a credible plan re AI will thrive where others will perhaps struggle. We will see some thinning of suppliers given interest rate challenges and the toughening of the Private Equity Market.
We will see further M&A activity and consolidation of suppliers – Many will broaden their offerings and more products will be end of lifed. To subscribe to our M&A tracker please click HERE
The SaaS market will perhaps be looked at by regulators. There are a huge number of advantages to SaaS but under old licencing models the balance of power perhaps used to be too much in favour of the customer whereas now some of the price increases we have seen are perhaps showing that this has swung too far the other way. Treble digit price increases/corrections don’t land well and whatever the numbers, IT teams need more forward looking budget certainty. Perhaps we will see the emergence of a SaaS lease with price agreement mechanisms as we do for conventional leases.
The death of the lengthy RFP and move to “smarter procurement” – some of you will know exactly what I mean by this. A level of governance needs to be applied on procurement but increasingly people are querying whether or not lengthy RFPs add any real value when looking at established products. As one contact said, “by the time you get to implementation, and given the rate of change, RFPs are a waste of time as they are out of date”. I suspect this is not 100% true but we need to be smarter in how we make selections and use everyone’s time better.
Firms will rip up the rulebook on business transformation, productivity and innovation – they will find very new ways of doing things in some areas which will affect their shape and size. Law firms will be much smarter at linking price to liability.
We will see changes in how in house clients buy - with a greater focus on understanding tech and how Gen AI is utilised. They will increasingly look to outputs more than buying by the hour.
Education of their people will become much more critical and important than ever before.
Playbook tools and embedded AI will do increasingly well as the work profile of lawyers will alter i.e. they will need to review much more incoming content. Data lineage, poisoning and governance tools will be widely adopted.
Data strategies will become much more critical and real.
IT and Innovation teams will transform and reinvent themselves given the wave of Gen AI.
The main cloud providers will dominate and private cloud will diminish.
Regulations and standards in AI will become more critical (inc ISO 42001/The European AI Act) and will start to become buying requirements.
We will see the battle of tech titans continue to work itself out with new developments such as Google Gemini – we need to remember we are only at the start of this journey.
The growth of Gen AI Cyber fraud/attacks – I recently asked some experienced IT professionals what they would do with Gen AI if they were “Bond Villains” – it was horrifying.
As I found myself saying to a client the other day, this will prove to be the very best or worst time to be in Legal IT – we have no choice though and need to deal with it and I for one am very hopeful given the experience and judgement I see from professionals in the industry.
Hyperscale Group are an Independent Digital, Innovation, Operational Advisory and Implementation Business with over 25 years plus deep market experience. We work for In-House Legal teams and Professional Services Firms all around the world and support them developing and implementing their strategies. We help our clients to make the right things happen.
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For more information, please contact Dereksouthall@hyperscalegroup.com
