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Well, as I would design it, Hero Lab classic running on your system would offer up it's API, or possibly the web UI. You could, if you choose, connect direct to that, but if you are not comfortable with that, the cloud service would act as a relay. Your own instance is still doing the math, and still housing the .user files, just the UI is separate from it.
Doesn't really matter at this point - I doubt they are going to change course at this point.
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