By Kevin Komiega
—Iron Mountain continued its transformation from a paper-based records protection company to an online backup service provider this week by announcing that it has inked a $50 million deal to acquire LiveVault, a disk-based online backup-and-recovery services provider for small and medium-sized businesses and remote offices.
The acquisition follows a five-year partnership between the two companies. Iron Mountain has offered Server Electronic Vaulting services through a licensing deal with LiveVault since 2000 and claims that more than 2,000 of its customers are already using the LiveVault service.
An investor in LiveVault since 2000, Iron Mountain currently owns close to 14% of the company. It will pay approximately $42 million for the remaining share of LiveVault, valuing the deal at about $50 million. The transaction is expected to close within a few days.
LiveVault will become part of Iron Mountain's Digital Business Unit, which is one of the fastest growing segments of Iron Mountain's business, according to John Clancy, executive vice president of the Digital Business Unit. Clancy cited Iron Mountain's desire to own LiveVault's intellectual property as one of the key motivators for the acquisition.
This isn't the first move Iron Mountain has made into the online backup-and-recovery market. The company began its push into the market in October 2004 when it bought Connected Corp., another online backup provider, for $117 million.
Iron Mountain's Digital Business Unit now offers electronic vaulting software and managed online data backup-and-recovery services for protecting distributed data stored on PCs and remote servers, including Connected's DataProtector/PC and LiveVault's Server Electronic Vaulting.
The company also offers an outsourced electronic records management service dubbed "Digital Archives." It offers the service in tandem with Data Restoration, Electronic Discovery Support, and e-Records Management Consulting.
Iron Mountain will provide more details on the acquisition during the company's annual investor conference on December 7.
Steve Duplessie, founder and senior analyst at the Enterprise Strategy Group, says Iron Mountain is the largest online backup services provider. But he believes the company is just getting started down the path of digital information management. "I think that they have much-grander aspirations to be the kings of managing all your information assets [whether they be] paper, tapes, or electronic data. I see this acquisition as just a step in that direction." He adds that Iron Mountain's primary competitors are vendors such as EVault and Arsenal Digital Solutions.
Duplessie expects Iron Mountain to continue adding technologies and companies to accelerate their plan to be a one-stop-shop for all external information protection and archiving.
In addition to EVault and Arsenal Digital, other online backup-and-recovery vendors include AmeriVault, BluePoint Data, ManagedStorage International, NovaStor, and Storactive.