BREAKING FREE SERIES

Article 2: The Broken Cost Model

By George Nedwick / CEO & Founder of GeorgeJon / July 15, 2026

Article 2: The Broken Cost Model

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In the first article of this series, we looked at why the eDiscovery market is Ready to Move.

Costs are rising. Demand is unpredictable. And the flexibility promised by cloud-based platforms has not fully reached the people actually using and paying for eDiscovery capability.

That pressure leads directly to the broken cost model.

For many buyers, eDiscovery economics do not work the way they expected. The cloud was supposed to help organizations scale more easily and align spend with actual usage. In practice, many users still face premium pricing, recurring storage costs, and limited flexibility to adjust spend as matters change.

The result is a market where buyers are asking not only what platform they should use, but whether the underlying cost structure still makes sense.

The Cloud Did Not Deliver Elasticity to eDiscovery Users

The enterprise move to the cloud delivered real benefits in many domains.

Organizations gained faster access to technology, reduced infrastructure ownership, and more flexible ways to manage capacity.

In eDiscovery, though, the users of these platforms have not seen the elasticity they were promised.

Instead, many buyers face premium pricing and recurring storage costs without the ability to scale their spend cleanly to actual usage. A matter may slow down, but storage charges continue. Data may no longer be active, but it still carries cost.

The elasticity story has largely not reached the people who use eDiscovery platforms.

That is one of the clearest disconnects in the market.

The value of the cloud is real. But for many eDiscovery users, the economics still feel fixed, recurring, and difficult to control.

The Visibility Problem Drives Buyers to Vendors

A major part of the problem is visibility.

eDiscovery cloud platforms charge premium rates and recurring costs for storage, but the users of those platforms often do not have clear insight into their own actual data volumes.

Without that visibility, buyers cannot easily predict or control their costs.

They may not know how much data they are carrying across active and inactive matters. They may not know how quickly storage is accumulating. They may not know which volumes are driving the most cost. And they may not be able to forecast what future matters will require.

That uncertainty makes direct platform ownership risky for many buyers.

It is also one of the reasons many eDiscovery users turn to vendors and managed service providers instead.

Vendors absorb some of that uncertainty by buying capacity in advance and reselling it across many clients. They are betting that they can recover their costs across a broader base of matters, users, and demand.

For direct buyers, this can reduce the burden of owning the full platform commitment themselves.

But the uncertainty does not go away.

It moves through the market.

The Two Buyers and Their Different Positions

The eDiscovery market has two primary purchasers, and they sit in different positions relative to this risk.

The first group is vendors and managed service providers. These organizations buy capacity in advance and resell it. They take on capacity risk deliberately as part of their business model. Their goal is to recover those costs across many clients and matters.

When utilization is strong, the model can work.

When demand falls short, unused capacity becomes cost with no offsetting revenue.

The second group is direct buyers, including corporations and law firms. These organizations purchase eDiscovery capability for their own use. They face the same visibility and cost challenges, but their options depend heavily on scale.

A large enough direct buyer may be able to maintain a smaller owned footprint and lean on vendors for excess capacity, surge demand, or specialized support. That blended model can create more flexibility than full ownership alone.

But many direct buyers do not have the scale, predictability, or internal visibility to make that model easy.

That is why the broken cost model matters across the entire market.

Vendors are managing capacity risk. Direct buyers are managing visibility risk. Both are responding to the same underlying pressure: eDiscovery demand is unpredictable, but many of the costs remain recurring, premium, and difficult to align with actual usage.

The broken cost model is not just a pricing issue. It shapes how buyers manage risk, how vendors manage capacity, and how the market thinks about flexibility.

That pressure becomes even greater when buyers are locked into long-term commitments they cannot easily change. In the next article, we will look at the multi-year commitment problem and why unpredictable demand makes rigid platform agreements harder to defend.

Cost pressure is only part of the problem. Follow along as we continue the series and look at what happens when buyers are locked into commitments they cannot easily change.

• Article I: The Market is Ready to Move
• Article II: The Broken Cost Model
• Article III: The Multi-Year Commitment Problem
• Article IV: Where AI and Data Reduction Create the Win
• Article V: Portability and the Freedom to Choose
• Article VI: What It Really Takes for Buyers to Switch Platforms
• Article VII: Where the eDiscovery Market Is Going Next
• Article VIII: The Market Is Open for an Independent Expert to Lead
• Article IX: Why Expertise Still Matters in a More Flexible Market

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• Email: info@georgejon.com