Some may have been surprised to see Iron Mountain selling it’s digital assets (read source code) for records management to Autonomy. But not if you were looking at the big picture it’s not a surprise. Well really it’s only the price tag that was a surprise. For what Iron Mountain bought Mimosa last year for $112 million and their Accutrac Software acquisition back in 2007 they just got $380 Million or a 300% return in one year. We’ve been pointing out that Autonomy has a billion dollar war chest, well $700 million now.
Yes autonomy has now entered the records management game. But for $380 million Autonomy has acquired technology that has been sold twice in little over a year. And you know what is not mentioned in this release? There’s no mention of any staff that Autonomy might have gotten out of this deal. How do you manage a software product if you don’t have the people to staff the help desks or write new code? We’ll have to watch.
The big picture here is that Iron Mountain was never a software company nor really a records management company. They are a storage company, and I don’t mean the computer kind. They are a logistics company that’s used to managing locations (buildings, warehouses, and empty mines) and shifting boxes inside them. They don’t know how to do software. They can maybe sell software, but not build and manage software. It brings me back to my days doing mergers and acquisitions for Documentum when someone tried to pitch me a 50-year old document management company. I couldn’t imagine who it was so I took the meeting. The company they wanted me to review sold steel file cabinets.
We’ll just need to wait and see how Autonomy takes this to the market. To think had Autonomy acted on Mimosa last year they could have saved $268 million.
Hi Marko – I think that this is actually the 3rd time that Autonomy entered the Records Management game – first when they acquired Meridio in 2007 and then again when they acquired the compliance technologies from Computer Associates last year. Actually, I think that Zantaz had some records management too though I’m not sure anymore…
PS: I love the steel cabinets story 😉
I missed the CA acquisition but I now do recall the Meridio and Zantaz ones. I wonder if Autonomy’s acquisition team forgot that this was their fourth RM purchase. Zantaz’s product alone should have been enough for the start of any real RM story.
With most of ECM looking at collaboration, mobile, and the cloud, I think their money could have been better spent. I’m sure there will be a partnership where Autonomy will provide RM services to Iron Mountain but I’m sure that could have been done without this deal.
Autonomy is filing bubbles in a feature matrix, bulking up its maintenance stream and trying desperately to be thought of as something more than just a search platform. Competitively in eDiscovery I think they will be far more aggressive than Iron Mountain but they have a lot of work to do around creating a coherent platform message that adds the eDiscovery page to the IDOL playbook.
It’s not just Mimosa but Connected, Stratify, LiveVault as well. I think autonomy didn’t pay a premium at all.
IRM Digital has got a good customer base and entrenched products but hasn’t been able to evolve them against the new competitors. Hope Autonomy can pitch in there. Can’t say anything about the people at IRM Digital though.
IRM took a bath on this.
Connected = 117 mil
LiveVault = 50 mil
Stratify = 158 mil
Mimosa = 112 mil
Paid $437 million. Sold for $380 million. Not including any other assets part of the sale. Where did you get a 300% return????
The fact Marko didn’t take the all of the acquisitions into account is discussed in the comments – but not really the point or even the interesting part of the discussion to me. Evernyone agrees IRM lost their shirt on this. The point was that IRM was getting out of a business they probably should not have gotten into in the first place and Autonomy was picking up a lot of disparate pieces – that now in light of the HP deal get dumped in the mix with Tower et.al. Wonder if the RecMgmt and compliance pieces will fair any better as part of HP.