The long-rumored acquisition of Mimosa Systems by Iron Mountain is now official.  As a former Mimosa employee, I’m happy to see my former colleagues taking the next step.  As an industry-watcher, this acquisition holds a lot of promise, in theory:

• Iron Mountain has brand recognition with the important records management crowd.  Adding email and file archiving offerings will help Iron Mountain satisfy expanding records management requirements.
• With Microsoft Exchange 2010 mitigating some of the need for the mailbox management functionality that email archiving provides, there is increasing emphasis on using archiving to truly the reduce the long-term cost of storage.  One of the ways to do that is to move archived information into the cloud where storage providers can deliver cost-savings through economies of scale.  The combination of Mimosa and Iron Mountain will give customers the hybrid on-premise/SaaS archiving solution that they are becoming increasingly interested in.
• Iron Mountain’s Stratify division is a well-respected eDiscovery provider.  Mimosa will complement that offering and vice-versa, though there will be some product overlap between Stratify’s eVantage and Mimosa’s file archiving product.
• Because Mimosa provides Exchange backup in addition to archiving, Iron Mountain can now think about offering backup in the cloud, which holds potential as a cost-saving measure.
• Iron Mountain has a large customer base that will serve as a huge channel for Mimosa.

All of this promise exists in theory; execution is another matter.  Iron Mountain is taking its first steps into the world of on-premise software.  While the Mimosa technology is good, the company was not able to establish itself as a truly successful software company.  Stratify has traditionally been a SaaS provider and only recently went to the model of delivering on-premise software (though in it original incarnation as Purple Yogi, Stratify did offer on-premise software).  The question remains whether Iron Mountain could have purchased a more experienced software company like CommVault (CommVault would have been much more expensive than the $112 million Iron Mountain paid for Mimosa).  Iron Mountain will have a tough road ahead to compete with the likes of Autonomy, which bought successful archiving company Zantaz and has now had almost two years of development time for its hybrid on-premise/SaaS archiving offering – that’s a significant head start.  Plus, Autonomy has more complementary eDiscovery capabilities.

If Iron Mountain can successfully get Mimosa and Stratify into its paper records management customer base, there is a good possibility that this acquisition will pay off.  It will be challenging for Iron Mountain to get product development right in its first real go-round as a software company.  But, as is often the case in life, timing is everything – a lot of trends are converging at the moment (eDiscovery and records management coming together, hybrid on-premise and SaaS archiving, backup in the cloud) and this acquisition could be taking place just in the nick of time.