By Heidi Biggar
Iron Mountain last month announced its intent to acquire Connected Corp., a provider of online backup-and-recovery products and services, in an all-cash transaction valued at about $117 million. The deal, which has been approved by Iron Mountain's board and shareholders, is expected to close by year-end.
Iron Mountain believes the move will help it break out of its traditional off-site data-protection mold and into distributed data environments (i.e., laptops, desktops, and other edge-of-the-network devices), strengthening its position as a provider of online data backup-and-recovery products and services.
"This is an opportunity for Iron Mountain, which is primarily in the outsourcing business, to enter into the product and licensing business," says Pete Delle Donne, president, enterprise solutions and services, at Iron Mountain.
Strategically, Delle Donne says the acquisition will help the company further its vision of "protecting customers' information not only from themselves but throughout the entire information life cycle, regardless of its format or location."
"Iron Mountain currently gets 99% of its revenues by protecting paper. They clearly see the need to get into the electronic age, so for short money they just bought millions of electronic clients," says Steve Duplessie, senior analyst with the Enterprise Strategy Group consulting firm.
As much as 60% of corporate information resides on laptops, desktops, and other edge-of-the-network devices, according to International Data Corp., an industry research firm in Framingham, MA.
Why did Iron Mountain choose to go after Connected and not LiveVault, with which it also has a reseller arrangement? Delle Donne says that a key factor in its decision to go with Connected was the fact that it offers both a subscription and a product-/license-based offering and LiveVault didn't. Officials for both Connected and Iron Mountain also said that the deal was further cemented by the fact that the two companies also shared a similar business culture, business model, and strategic vision.
"We've found that our customers like to 'do it themselves' by buying product off the shelf and then installing the components themselves," says Delle Donne.
LiveVault dropped its software offering about three years ago in favor of a pure subscription-based approach; Connected recently added a stand-alone product offering to its services lineup. (For more information about online backup and recovery and a list of vendors in this space, see "Is online backup a fit for SMBs?" InfoStor, July 2004, p.1.)
Iron Mountain currently resells Connected's desktop DataProtector product as well as LiveVault's server subscription service (LiveVault Online Backup and Recovery Service) as part of its Electronic Vaulting Services offerings. Iron Mountain says it plans to continue to resell LiveVault's server subscription service after the close of the Connected acquisition.
As for Connected's road map, in particular its plan to extend support from the desktop to larger Windows environments and to a variety of file types, John Clancy, chief operating officer for Connected, says users can expect to see a product announcement as early as year-end. "Our road map stays the same," says Clancy. "The strength of Iron Mountain will simply allow us to bring products to market faster."
In addition to its DataProtector products, Connected also offers an e-mail archiving product called ArchiveStore, which reportedly complements Iron Mountain's Digital Archives outsourcing service.