U.K-based Autonomy Corp. took a large step into the cloud backup service market Monday when it acquired Iron Mountain’s digital data storage business for $380 million. The deal hastens Iron Mountain’s exit from cloud storage, which began last month when it closed its file and archiving public cloud storage services.
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When the deal closes—probably in late June or July—Autonomy will take over Iron Mountain’s Connected cloud-based backup and recovery for PCs and Macs, LiveVault cloud backup for servers and application data, NearPoint on-premise email and SharePoint archiving, and its e-discovery/compliance suite of products and services.
“The acquisition will propel Autonomy into cloud computing,” Autonomy CEO Michael Lynch said. “It will drive us into more structured data into the cloud.”
By selling its digital businesses, Iron Mountain will refocus on its core business of physical data media while Autonomy expands its market base in archiving, backup and the cloud. The deal brings Autonomy about 6,000 more customers and 6 petabytes of data.
The acquisition of Iron Mountain's digital storage assets is Autonomy’s third largest acquisition in its 15-year history. In 2005, the firm acquired competitor Verity for its enterprise search and process management technologies for approximately $500 million. In July 2007, it acquired email archiving and litigation-support company Zantaz for $375 million.
Autonomy may have another acquisition coming. During the conference call to discuss the Iron Mountain deal, Lynch said the deal was one of two possible acquisitions Autonomy has been working on. He also said Autonomy discussed buying Iron Mountain’s digital assets in late 2009 but the companies did not reach agreement.
The sale is among several changes Iron Mountain has made recently. In April it closed its Virtual File Store and Archive Service Platform cloud services, switched CEOs from Bob Brennan to Richard Reece and said it would look to sell its digital assets. In a press release issued Monday, Iron Mountain said that exploring strategic alternatives for the digital business was in the best interest of the company’s stockholders.
An Iron Mountain spokesperson Monday said the company would not comment further on the acquisition until it is closed.
Consultant Jon William Toigo, founder of Toigo Partners International, said companies such as Iron Mountain and hybrid cloud storage startup Cirtas are bailing out on the cloud.
“My attitude toward cloud computing tends to be critical,” he said. “I’m not a fan of this thing. I’ve been in this business for 30 years, and we always go through this cycle. Then customers start to get concerned with the typical things like security and service-level agreements. With cloud storage, you get more and more requirements. It’s the same old song. If you want a cloud, then get a mainframe and get rid of these x86 servers.”