Bruised Iron Mountain gives up on storage cloud

It's weird: Gartner is now Iron Mountain's news outlet and tells us that bruised Iron Mountain is giving up on its public cloud storage and closing the business down. The beleaguered company has also set up a poison pill defence against any takeover attempts.

The background here is that Iron Mountain screwed up and had to write off a lot of money with its digital record (file) storage and eDiscovery offerings. This prompted it to re-evaluate what it was doing. It is also facing action from activist hedge fund investors that want it to stop all its digital internet cloud and overseas expansion nonsense and become a real estate investment trust (REIT) focused on physical record storage.

It has set up a poison pill defence so that anyone mounting a take-over attack will face much higher costs. In a release the company said this was: "designed to reduce the likelihood that any person or group would gain control of the Company by open market accumulation or other coercive takeover tactics without paying a control premium for all shares."

Now Gartner, the magic box company, tells us:

On 8 April 2011, Iron Mountain confirmed that it is sunsetting its public cloud storage business. The company said that the official end date for the service would be "no sooner than 1H13," but said it stopped accepting any new customers as of 1 April 2011. Iron Mountain says it will continue to offer services to its current cloud storage customers, help them migrate to another provider or return the data.

Virtual File Store customers that stay with Iron Mountain will be transferred to a higher-value offering, File System Archiving (FSA) in 2012. The new offering will be a hybrid that leverages policy-based archiving on site and in the cloud with indexing and classification capabilities.

Archive Service Platform customers have no migration path and are being terminated or moved to an alternative service provider.

The Virtual File Store cloud-based file service was announced by Iron Mountain in February 2009. The Archive Service Platform enabled independent software vendors to integrate an Iron Mountain API in their products so as to use the Virtual File Store.

There's a hint in Gartner's alert that Iron Mountain's cloud storage was not profitable. We don't know what Iron Mountain itself is saying because it's not saying anything, except through Gartner.

Competitor Nirvanix has leapt into the fray, saying: "It will offer all stranded customers free data migration services into the Nirvanix Cloud Storage Network—plus unlimited storage—free for 30 days ... [It] is also offering stranded Iron Mountain customers the option of implementing a Hybrid, Federated Cloud or Private Cloud Storage solution—all with the same usage-based pricing, global namespace and elastic flexibility of its public cloud."

Gartner's report points out that three public cloud storage providers have now exited the market: EMC's Atmos Online and a startup called Vaultscape, both in 2010, and now Iron Mountain. To date, it says, "public cloud storage IaaS (Infrastructure as a Service) has had a modest level of adoption," and only Nirvanix and Zetta remain as pure-play cloud file storage service providers. ®