Iron Mountain Shedding Discovery Platform?
Old/new CEO Richard Reese said that the digital business would likely be on the auction block with the exception of healthcare initiatives. Iron Mountain promises to support their existing digital customers through partnerships. They are also exploring partnerships that enable them to keep the corporate hand in digital services without having responsibility for a major digital division.
This may well mean that Iron Mountain's entire Enterprise Discovery Platform will be up for grabs. I’d be surprised if the platform survives as a whole since it’s already made up of integrated component parts that largely came from previous acquisitions. Incidentally this is one of the issues with building an eDiscovery/information governance platform. Sure platforms offer single-vendor efficiencies but what happens if one of the product families isn’t doing well? Or the company goes under, or sheds the division that makes the platform? Customers frankly run much less risk when they invest in best-of-breed point products for a complex workflow like eDiscovery.
Question: who will buy the eDiscovery products? Mimosa NearPoint could launch on its own again although they were not yet profitable when Iron Mountain bought them in the first place. If Iron Mountain maintains a close partnership with NearPoint then Mimosa might be viable, although I expect another buyer to step in. Dell might be a good purchaser since they already have a close relationship with NearPoint on Dell’s DX object storage system. IBM is a possibility as they have made a few eDiscovery purchases (PSS Systems) but only partner around indexing and collections. They may want to keep it that way but we hear occasional acquisition rumblings from Big Blue’s direction. (Note that NearPoint isn’t a strict eDiscovery play but does have solid eDiscovery and Compliance options that provided a large portion of Mimosa’s pre-acquisition revenue.)
Stratify is another matter. It is a review platform for the enterprise that used to be independent and perhaps could be again. But review platforms are not prime candidates for acquisition on the enterprise vendor side. It’s rare for a collection-side vendor to invest in review technology. Even though Iron Mountain did it, we now know what happened to that.
Is shedding the digital business a good thing or bad thing? Depends on where you’re coming from. It is a good move for Iron Mountain’s shareholders in the short term but how about the long term? Iron Mountain makes billions – literally – from its physical storage offerings. That business is not going anywhere any time soon. But are they shedding a division that will grow appreciably in the future? Some background pieces claim that Iron Mountain started its digital business back in 2002 and today demonstrates a measly profit in the millions. However, Iron Mountain only launched its Enterprise Discovery Platform last fall. It’s too bad that they have been shoved in a direction where they cannot give the platform the time and investment it deserves.
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