Smoke Clears for Iron Mountain

NEW YORK -- Iron Mountain gave financial updates and revealed new product plans at its annual investor meeting today. (See Iron Mountain Hosts Analyst Day.)

The company is still counting the cost of fires this year at its facilities in London and Ottawa, according to execs. (See Iron Mountain Feels the Heat and Archiving Goes to Blazes.)

"It was devastating to us as an organization," said CEO Richard Reese, adding that the cause of the London fire, which completely destroyed one of the firm's main U.K. facilities, is still a mystery. "We're spending a significant amount of money on professionals of all types to investigate [the cause of the fire]."

The fires will have a $7 million impact on the firm's operating income for the second half of 2006 and could shave as much as three cents off the vendor's earnings per share for the same period, according to Iron Mountain execs.

Nonetheless, Iron Mountain also raised its guidance for fiscal 2006 today, upping its revenue forecast to between $2.3 billion and $2.35 billion. Previously, the firm had anticipated revenues in the region of $2.27 and $2.32 billion.The CEO also confirmed that he is still working through issues of compensation with customers at the London site. "We did have customers lose records, some are understandably upset about it, and I don't blame them," he said, in response to a question from an analyst. "We're working through it customer by customer."

An analyst attending the event, who asked not to be named, told Byte and Switch that Iron Mountain may have to work hard to get customers on its side in the aftermath of the London fire. "People do worry long-term about whether they can trust the company," he said.

Despite the review of the fires, no mention was made by Iron Mountain execs about another recent problem: The firm's spat with the State Fair Of Texas, which alleges that eight employees of a Dallas-based Iron Mountain shredding facility resold tickets to the 2004 State Fair that should have been shredded. (See Iron Mountain in Hot Water Again and State Fair Sues IMIM.)

But the company did lay out plans for new records management and archiving products. Later this month, the vendor will launch a solution called Retention Center, which execs claim will boost storage managers' ability to control their records. "It allows customers to create a map of everything that is under management," said Bob Brennan, the Iron Mountain COO.

This, he explained, lets users quickly find specific records, manage their retention policies, and also place a "hold" on information, preventing it from being moved from one place to another.Iron Mountain also said that the product/service, which appears to pack a customer-based software element, can deal with both physical and digital records, as well as Iron Mountain's own data repositories and those of its competitors.

"Retention Center allows our customers that three-hundred-and-sixty-degree view," explained Brennan. "You can't hide that ball anymore," he added, alluding to the slew of regulatory and legal constraints users now face. (See Top Tips for Compliance , Storage Goes to Law School, and The Upside of Compliance.)

Although Iron Mountain did not reveal pricing for Retention Center, the product is a clear attempt to extend its presence at the expense of traditional content management vendors. At the moment, Iron Mountain is up against a number of competitors in the records management space, from technology players like IBM and HP, to specialists such as Zantaz and Fortiva. (See Fortiva Guarantees Search, Zantaz Offers On Demand, Outsourcers Beef Up Email Archives, and Email Archives Arrive.)

Execs have also embarked on a major overhaul and expansion of Iron Mountain's digital archive and associated services, starting with email. "It will be significantly faster and bigger than what the market has now," said John Clancy, executive vice president of the firm's digital division.

Competitor Zantaz, for its part, claims to store 11 billion emails within its own archive, although Clancy told Byte and Switch that he is looking well beyond these figures. "We believe that this will be the most scalable platform for email archiving and electronic records in the industry," he said, adding that the system will handle an array of electronic data, such as images.Although the service will initially be managed by Iron Mountain, the exec says that control could be handed back to users. "We do envision a day when customers can run this on their raised floors as well."

But, the souped-up archive is still some way off, and Clancy would not provide even a tentative launch date, explaining that the system is still in the "engineering" stage.

Email archiving is fast emerging as the bane of many storage managers' lives, and users have already voiced their concern about the risks of sending sensitive data to a third-party vendor. (See Outsourcing Email Not an Easy Choice.)

James Rogers, Senior Editor, Byte and Switch