Iron Mountain (NYSE: IRM), today announced the signing of a
definitive agreement to acquire Stratify, Inc. for approximately $158
million in cash. (See press release)
Iron Mountain and Stratify have been courting for several months. In January of this year they announced an alliance. Today this “common law couple” announced their officially tying the knot. The big winner here is Stratify, a company that began as Purple Yogi, offering dynamic taxonomy construction and management technology. After floundering in the taxonomy space for a few years Stratify re-branded itself as an e-discovery service provider, leveraging their expertise and technology in a SaaS model.
Iron Mountain’s position in the paper records storage business is unparalleled. They are in an enviable position from which they can turn these “paper customers” into “e-customers" as well. Of course, in order to do this they have to establish a level of credibility and services in this new space. The turning of the alliance with Stratify into an acquisition strengthens that position somewhat.
The SaaS model of Stratify complements the traditional Iron Mountain role as “custodian” of records, i.e. they will physically house and manage the electronic records and documents. It is interesting to note, however, that in our recent Market IQ on Content Security, 78% of the 600 organizations polled indicated that they would not likely implement their content security (read records management, compliance, etc.) system in a SaaS model. As we stated in the Market IQ, this is more likely based on immaturity among the public, than legitimate concern for the model. Iron Mountain will nonetheless, along with other players in this space, have to educate the market and overcome this resistance. The reputation they have built in the paper world can only serve to help.
