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.