Iron Mountain buys archiving vendor Mimosa Systems

Iron Mountain announced today that it has acquired privately-held archiving vendor Mimosa Systems. The approximately $112 million deal significantly bolsters Iron Mountain’s archiving portfolio with on-premises software for email, file and SharePoint archiving. With the purchase, Iron Mountain also picks up just over a thousand existing Mimosa customers and a good talent pool with expertise in archiving and eDiscovery.

My preliminary perspective is that this acquisition will entail some near- and mid-term bumps for Iron Mountain customers and prospects, but will ultimately prove positive. The three main reasons:

• Message archiving remains critically important. Over the past decade, tens of thousands of organizations have adopted message archiving solutions. An array of vendors, providing archiving offerings for Exchange, Notes Domino, and other messaging systems, have helped these buyers comply with regulations, mitigate legal risk, and improve operational efficiency. While the message archiving market is mature, it’s changing and growing at a rapid clip. Although Mimosa made an impressive initial entry into SharePoint archiving last year, message archiving accounts for most of new customers the vendor signed in the last 12 months. With this acquisition, Iron Mountain demonstrates that it understands how important message archiving is to prospective buyers and its strong intent to capitalize on the opportunity.
• Functionality delivered as on-premises software (as opposed to SaaS-based solutions) matters to many archiving buyers. With the promise of lower total cost of ownership, more rapid deployments, and other advantages, message archiving vendors providing SaaS-based solutions report strong customer growth. In announcing its April 2009 partnership with Mimecast for SaaS-based message archiving, Iron Mountain sought to take advantage of this market growth. While the vendor has had some traction with this partnership, prospective buyers with a preference for on-premises solutions due to privacy, security, legal, and other concerns remained out of reach. Now, with Mimosa’s on-premises message archiving software, Iron Mountain can more effectively target these buyers as well as organizations interested in exploring hybrid solutions, combining a mix of on-premises infrastructure and cloud-based services.
• Message archiving buyers struggle with eDiscovery challenges. From a series of podcasts I’ve recorded with message archiving customers (e.g., Canaccord, Media General, and Rohm and Haas) over the past few months and from ongoing exchanges with enterprise buyers, it’s clear that many are achieving legal risk mitigation objectives but most organizations struggle. Interestingly, top challenges typically don’t include issues with insufficient message archiving features or other application-specific factors. Instead enterprises report difficulties in synchronizing eDiscovery, archiving, and records management efforts along with issues in establishing policies for retention management and legal hold as key challenges. Effectively incorporating Mimosa’s archiving products and expertise into the broader Iron Mountain portfolio holds potential to ease these difficulties. For example, a solution that tightly integrates message archiving, preservation, and legal review along with solid best practices guidance would go a long way in easing enterprise eDiscovery pain.

Enterprises report frustrations in integrating applications that support disparate steps of the eDiscovery process. If Iron Mountain successfully incorporates the Mimosa product set into its portfolio, the vendor has good potential to address enterprise legal risk mitigation headaches. This is a considerable effort, however, and success is certainly not assured. I’ll be monitoring Iron Mountain’s execution on this deal and will be looking for examples of customers leveraging multiple Iron Mountain archiving, records management, and eDiscovery offerings in production environments. If your organization fits this description, please send me a note at bhill@forrester.com.

What do you think the acquisition means for the message archiving market? I welcome your comments here. Also, Forrester is currently conducting research on message archiving trends, budgets, and user expectations. We’re wrapping up an online survey now and value your message archiving insight. If you would like to participate in an online survey to support this research, please click on this link. (No vendors please.) We plan to publish key summary findings in early 2010.