Iron Mountain going back to roots in storage services

A week afterwards Iron Mountain announced it had replaced its CEO, the company said it's considering selling its archiving, e-discovery and online backup and recovery business to return to its roots in document and tape storage services.

If Iron Mountain sells its digital business, its online backup offering that includes LiveVault online server backup service and Connected desktop backup service would go with it.

Iron Mountain entered the digital business 10 years ago to address a clear customer need, Reese said, however that business has not been profitable.

"We've got good margins. The problem is, we eat them all up in the redevelopment costs," Reese told investors. "We were not successful at building an efficient development shop. Or said another way, it just cost us too much to continue to develop and redevelop our own innovation."

Reese said those cloud vendors want his company to use their software research married with Iron Mountain's distribution channels "to get access to markets deeper than they can get into."

Arun Taneja, principal analyst with The Tenaja Group, said it was a minor shareholder in Iron Mountain, Elliott Management, that forced the change in strategic direction, calling for the company to go back to its roots.

What do best

"They know what do best. They create products, nevertheless they don't want to be in service provider business," Tenaja said. "I'm not surprised Iron Mountain figured out they we're good at services yet they just didn't know how to build products."

An Iron Mountain spokesman told Computerworld that during Elliott Management spurred on the change, the company had been considering selling off its digital business since last fall.

In the future, Iron Mountain will focus on its core digital and paper document archive and digital tape storage business, and it will use third party software to provide online storage services, the spokesman said.

"Those are examples today of how we want to provide cloud services to clients moving forward," the spokesman said. "We're exploring alternatives for digital business. If this process results in a sale, I don't know if we'll continue to store customer's data."