Article by Joe Davis. Posted via the ILTA blog
Alvin Tedjamulia sleeps only about 4 hours per night. "My mind is always thinking how can we solve this, how do we improve security, how do we improve reliability..." As CTO and co-founder of NetDocuments, Tedjamulia spends the other 20 hours of the day working on perfecting the cloud-based document management system (DMS) that seeks to breathe new life into the way law firms handle documents.
NetDocuments was started in 1999 by the team that had created the Soft Solutions document management system, which was then sold to Novell. "[NetDocuments] was always based on the internet, SaaS," Tedjamulia explains. "The term 'cloud' didn't even exist at that time. We knew that it would take some time for the cloud to mature. It took a little longer than we hoped, but it has been built from the ground up with the concept that it should be a shared application and the infrastructure that is common on the internet and the cloud. It was very early, we had to do a lot of pioneering and learning because doing things on-premises requires a completely different infrastructure and thought process than doing things in the cloud."
While the cloud certainly forms the foundation for NetDocuments' service, it is only a means to an end for Tedjamulia. "I view the cloud as a fundamental technology solution option that truly solves all kinds of things - innovation, security, global availability, etc. Law firms right now want the efficiency, the security and the global access of the cloud, but they also want to satisfy that bank and that defense contractor." It is this struggle that keeps Tedjamulia preaching the NetDocuments gospel. "It's exciting," he says with a laugh. "I'm all excited about this!"
At its core, one of the key benefits of the NetDocuments solution is that it stores its documents in the cloud. But it is this very feature that raises objections from law firms and their CIOs who claim that if even just one of their clients takes issue with this practice, it is a deal breaker. In response, NetDocuments now offers multiple variations on the cloud storage theme. Tedjamulia explains "we have the flexibility of four places [to store a document] - you can place it in global storage with NetDocuments, you can place it in regional storage either in NetDocuments or in Azure when compliance requires certain documents must be stored in certain locations for data sovereignty, we can store it locally at the firm for true isolation for compliance reasons. Or we can even allow the law firm to store it in their own customer's data center. So if a law firm has a bank as a client, you can store it in [the bank's] data center." Each of these options is controllable by administrators, but is completely transparent to the end user. "We have certain customers that have implemented data classification policies," he continues, "so documents can be public or private or sensitive, or classified or secret. If they have a policy that secret documents can't go to the cloud, fine. You can have private storage, and those documents will be stored inside the customer's own firewall. Or we have certain customers of law firms that are demanding that there is no co-mingling of documents with their competitors. Maybe a defense contractor says they don't want [their documents] to be co-mingled with another defense contractor. Today, it's very difficult under a single document management system to completely segregate and isolate those documents so that they are not co-mingled with other documents in the DMS under a physical storage infrastructure or a virtual storage infrastructure. In this case, we can say you can store your own documents in in your own facility, and then only your employees and the lawyers that are working on that document can share that storage infrastructure at the customer's location. The customer has the advantage in that every outside counsel operating on that set of documents can share that infrastructure, but under a true no-comingling scenario."
When the topic of co-mingling comes up, Tedjamulia cannot help but take the opportunity to point out that the cloud is not the problem, but rather the solution. "For years, everybody has been co-mingling customers' documents in the same document management infrastructure." He points out that even in a hosted model, where the documents and traditional DMS servers are essentially outsourced and reside in a remote data center, "the concept of data segregation across law firms is elusive. You're going to have a single storage infrastructure like a NetApp or an EMC that virtually allocates space but they are all in the same infrastructure. It is economically totally unfeasible in a hosted model for every law firm to have their own EMC or NetApp infrastructure. You still have the same servers that have virtual machines that are running the software, so it's still being co-mingled."
"So the concept of data co-mingling can only be resolved under two types of architecture," he continues. The first scenario is when documents are hosted by the law firm's client. The second gets into one of NetDocuments' features: cryptography. "Cryptography is the strongest boundary you can have, especially if it is the law firm or even the customer that holds the encryption keys. Hardware based segregation will never be as effective as cryptographic segregation where the key is being held by the law firm or by the customer. So by having very strong cryptographic boundaries, and the option of having data being stored at a customer's site as an option, then you have truly solved the issue of data co-mingling."
Cryptography is just one example of NetDocuments' focus on security. "Frankly the whole security infrastructure is key," Tedjamulia explains, "because the security is not really being driven by the lawyers themselves, but driven by the customers of those lawyers - the banks, the insurance companies, the defense contractors and governments are demanding certain requirements that are very high." The company has again turned a potential cloud weakness into one of its strengths, providing layers of security that might be out of reach for law firms. Tedjamulia believes that law firms will have no choice but to meet these requirements in order to maintain their clients. "Infrastructures that involve cryptography and unique encryption per document and entropic random number generation - they're not attainable or economically feasible with just a single installation - you have to leverage the cost and the know-how and the administration across multiple [firms]."
"Security consists of multiple aspects - it's the back-end infrastructure of security and cryptography, it's the perimeter defense, meaning that you cannot let the bad guys in or the nation state attack you. I do not usually emphasize perimeter defense as much as data cryptography, but the perimeter defense of NetDocuments is a beauty to behold," he says, smiling like a proud father, "just because you cannot replicate in a law firm the layers of perimeter defense." He also brings up distributed denial of service attacks, or DDoS. "Right now we have 300 GB DDoS attacks against a particular network, and that will overwhelm any single law firm's bandwidth of 100 MB or 1 GB. If you have a 300 GB attack, your DDoS protection software can't process information as fast. But in the cloud we can have terabits of DDoS protection."
The next security goal for NetDocuments is the SOC 2+ certification, which requires the company to meet a set of particularly stringent requirements. "We're getting close to the banks getting together and giving us a shared assessment on the SOC 2 +, which is 30-40 additional controls that the banks have imposed on top of the SOC level 2. No bank can endorse any particular vendor, but on a combined basis they can say this meets 95% of all our requirements in the document and email management space. That's going to be huge."
To hear Tedjamulia go on about the levels of security protection baked into NetDocuments' solution, one almost gets the idea that NetDocuments is really a security company that also happens to manage documents. "I like that perspective," he says. "I'm a dreamer, and we want to constantly embrace security. Now, truly, there are some things that are not economically feasible or practical, but that's today. It doesn't mean that tomorrow it won't be practical with new enhancements and technologies and computing platforms. Security is a journey, it's not a destination. So as long as we can push, we will."
Tedjamulia knows that all this back-end technology is useless if lawyers don't embrace it. "That's why we have focused quite a bit in 2 or 3 areas for improved user productivity. If you look at one of the very strongest aspects, it's predictive email filing." He goes on to explain that filing emails via "drag and drop" may work on the desktop, but not on a mobile device, which is why NetDocuments purchased the Decisiv Email engine from Recommind early last year. This technology suggests the destination folders into which an email should be filed based on its content and metadata. "It displays the folders you should drop this [email] to in descending order of probability with you being able to select 2 or 3 of them just by clicking, and you move on. And giving that kind of flexibility on your mobile device is just huge."
Predictive mail filing is one way users interact with the system, but NetDocuments continues to add other integrations. For example, ND Office allows users to save and retrieve documents from within the Microsoft Office suite, including the iOS version of Word. ND Sync allows for Outlook folders to be synchronized with the NetDocuments system. "We had a very high adoption ratio of 85% in law firms with the HTML5 browser interface," Tedjamulia explains, "but when you offer [integration with] Word, Excel and PowerPoint, it increases by another 10%. ND Sync is a new product for us, but we think it's going to make a difference for us in the last 2 or 3 percent."
In the NetDocuments model, the cloud is not just critical to the back-end storage and servers, but also to the user-facing client software. Tedjamulia points out "we only have a single virtual client because every client that we have runs the same software, [and] runs the same infrastructure. A law firm that adopted the service 12 years ago runs the very same version of the software as the one that adopted yesterday, and the one running in Singapore runs the same software as the one in New York. We can think about it as a single virtual client as opposed to 2000 different customers each with their own version of the software, each with their own license of the database, each with their own location for backup and for clients. How do you get ISO 27001 compliance if all of your customers are running under a different infrastructure? You have to certify each one of them. If we had to implement quantum random number generators in 2000 customers, holy cow, how do you do that? For us, this is huge, and I think it is a fundamental reason why everybody will be forced to move to the cloud [for document management.] The vendors that do not leverage a single service will not be able to compete with those that do."
Even with cutting-edge technology and its focus on security, NetDocuments still encounters firms that are concerned about making the leap to a cloud-based DMS. "A lot of it is just lack of truly understanding what this technology can do," Tedjamulia explains. The fear he hears most often is that firms are worried that their clients might object to having their law firms storing documents in the cloud. "But I have to say, frankly, that I have been taken by some absolutely gigantic firms to some of the biggest international banks and the biggest customers that have objections. All these objections can be addressed, like the issue of documents not going into the cloud and the issue of subpoena defense. All of that can be solved, so a lot of it is lack of knowledge of what this is about."
"It's hard to educate people about all these concepts, because there are a lot of concepts. And we're still the little guys." Despite its size, NetDocuments is seeing growth, having adding over 130 new customers in the fourth quarter of 2015. "We have been seeing diminishing friction over time. This was a huge, difficult process 10 years ago. It was hard 5 years ago, but we still got customers. Right now, I wouldn't say it's easy, but it's a lot more acceptable. When a law firm takes a stance and says 'I want this because this is the way we're going to work in the future', it's a strategic decision, not just a technology decision." Tedjamulia often asks customers which part of the NetDocuments solution is the one that they found most compelling, and he is particularly proud that many answer that it is the whole offering they find appealing rather than a particular feature. "It's a strategic decision because they cannot truly be what they want to be without all of this modern technology, without this modern platform. When a firm makes that decision, and then they inform certain strategic customers that's what they want to do, I have not seen any huge customer complaints. If one or two of their customers raise the issue, I have been in those conversations, and I have not seen one that says no. Everybody says 'yes, I can see how this will improve your legal services to us'. This has been with some of the most restrictive banks in the world."
Tedjamulia knows that there is still plenty of work to be done, but is confident of the future. "I think it's just a matter of time before the cloud will be the default choice," he says. In the meantime, he and his team focus on both innovation and execution. "I truly believe that the pace of innovation in the cloud is 8 times faster than a hosted or an on-premises implementation. I predict that those that are truly cloud will continue to accelerate the pace of innovation as the infrastructure becomes more mature. Our infrastructure is getting more mature all the time so that it's easier to innovate. Once you get out of the legacy databases and do more with NoSQL, once you start getting out of the very-difficult to run search engines and go into the cloud-based search engines, when you start getting out of enterprise storage of NAS and SAN and get into the object store, you just do that over and over again with multiple technologies, the technology becomes more nimble."
"That's the beauty of the cloud", he continues. "The only pain is the initial step of going to it. Once you get there, you're just propelled automatically because every quarter there is a new release, and the new release is small - bite size - so people always stay [current with the latest] innovation." He says this also keeps firms from having to constantly deal with the challenges of an on-premises DMS, including "what are my pain points, and how do I solve the issue of security and email adoption and working within Word, Excel and PowerPoint and Microsoft Office 365 integration, and how do I make it so that every lawyer can access everybody's documents subject only to security, and the issue of low adoption, and how do I deal with infrastructure. Once they take the step, then they just ride."