Iron Mountain Magnetic Again?
September 26, 2010
Iron Mountain is an unusual company. The firm’s business is built on moving paper from a file cabinet to a secure location. Put those documents in a box and store them in a cave, an “iron mountain”. From paper, the company moved to digital content and entered the digital archiving business. Along the way, the firm snapped up Purple Yogi (now known as Stratify). Purple Yogi was an early “automated classification” and search system for content. The Purple Yogi folks had an interesting approach, but like many of the early “automatic” systems, humans were needed. As a result, dealing with “big data” was not the system’s core competency. Purple Yogi morphed into Stratify and focused on the legal market where the content domains were bounded and billable human labor was part of the business model. Iron Mountain acquired Stratify (né Purple Yogi) in 2007 as I recall. then in a somewhat surprise move to the goose, Iron Mountain acquire Mimosa Systems, another document processing outfit. According to the Iron Mountain news release:
The deal provides Iron Mountain with an integrated archive for email, SharePoint data and files, and gives the company an on-premises archiving option to complement its existing cloud-based archives. The ability to archive and manage data both onsite, inside the customer’s firewall, and remotely in the cloud makes Iron Mountain a one-stop shop for data capture, archiving and management. It also provides the company’s customers with greater flexibility and choice for managing their information. Additionally, the company can now capture and manage a broader range of enterprise information from so-called “edge-of-the-network” devices like desktop PCs and laptops as well as from company repositories like email stores, SharePoint servers and file systems. Many larger businesses still prefer to keep this data on their premises today. Finally, the acquisition allows Iron Mountain to extract intelligence from the information it manages both on-premises and in the cloud, advancing the company’s larger strategy to help enterprises lower the costs and risks associated with storing and managing information.
The search and content processing company has quite a few players. My experience is that most of today’s search wizards wearing their azurini T shirts and selling their advice to search-challenged procurement teams don’t know much about Purple Yogi or Mimosa.
The reason is that specialist firms deliver narrow solutions to segments of the market too small or esoteric to trigger a reading on the English majors’ Geiger counters.
Upon reading “Are Iron Mountain Shares Ready to Climb?”, I asked, “What’s the PR push all about?” The link to the story is likely to go dead because the source is Barron’s, a Murdoch property so you may have to pay to see the info when you read this post.
The reason for the “excitement” about Iron Mountain is that Iron Mountain’s share price has not exactly set the “recession is over” world on fire. Nevertheless, Warren Buffet likes the stock and that’s enough for Barron’s. Toss in the promise that Iron Mountain will win big in the cloud computing space, and you have a PR opportunity.
Barron’s notes that Iron Mountain has some challenges. These include management policies, a revenue base built on paper documents, and lots of competition.
My view is different. I think Iron Mountain is a company that can generate a hefty return with a shift in management focus and a rebuild of its core technical approach. I think that buying companies like Stratify and Mimosa do not solve problems; they create more problems. Without a more robust technical vision, Iron Mountain is not likely to have the magnetic pull that savvy folks like Warren Buffet require. Therefore, if Mr. Buffet wants to make a killing, he is going to have to make slow, methodical changes that first affect management and then technology. Without these shifts, Iron Mountain is going to have some difficulty dealing with the Amazon-type or Rackspace-type of approach. A Yahoo or Google style approach to next generation technology will be tough to make work. How patient is Mr. Buffet?
Stephen E Arnold, September 26, 2010
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i actually use polycarbonate based file cabinets because they are much ligther than steel cabinets “”