Technology

Iron Mountain returns to cloud storage, with EMC as a partner

Iron Mountain in Hollywood, CA. on January 3, 2013. (Eric Grigorian for The Boston Globe)
Eric Grigorian for The Boston Globe/File 2013
Iron Mountain has no choice but to be in the cloud business, one analyst says.

Five years after it gave up on storing corporate information on the Internet, the Boston data-archiving company Iron Mountain Inc. is back in the cloud, ready to compete with a host of big-name rivals who have gotten a big head start.

Iron Mountain has launched a new service, Cloud Archive, that uses hardware and software from Hopkinton-based EMC Corp. to support long-term storage of a company’s vital records. In a cloud archive, the records are stored “live” in a data center, where they can be instantly accessed through the corporate network. Cloud Archive will reside on computers in a former mine in Boyers, Pa., and on a backup system in Kansas City.

This is the second cloud initiative from the company in the past year. Last April, Iron Mountain launched a data-backup service that also runs in the cloud and lets companies quickly restore lost or corrupted files that are in active use.

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Cloud Archive is a far cry from Iron Mountain’s traditional archiving business, in which magnetic-tape cartridges are stuffed in boxes and stashed in warehouses.

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Phil Goodwin, a data-recovery analyst at IDC Corp. in Framingham, said many companies are looking for a more reliable alternative to tape storage. “Tapes break. Tapes get lost. Tapes get stolen,” Goodwin said. “So a cloud repository is generally considered more secure.”

Eileen Sweeney, Iron Mountain’s general manager for data management, said customers are moving to cloud archiving because they need faster access to archived data. And she expects them to pick Iron Mountain because it has 65 years of experience in secure data storage. “They’ve trusted Iron Mountain with their data in the past,” Sweeney said. “Now they can trust Iron Mountain with their data in the future.”

Iron Mountain’s previous foray into cloud storage began in 2002, when there were few such offerings available. Iron Mountain tried its hand at data backup, data archiving, and “e-discovery,” a service that lets a company’s legal department easily locate files needed in litigation.

Still, by 2010, the business had generated only about $231 million, less than 10 percent of annual revenues. And by then, the company faced competition from massive technology companies like Amazon.com, IBM Corp., and Oracle Corp.

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Pressured by an activist investment group, Iron Mountain sold the business in 2011.

“We are not a technology company,” said Sweeney, who joined Iron Mountain in 2014. Problems with the previous effort included being late to the market with products that cost too much. But with Cloud Archive, the company will rely on EMC to get the technology right, while Iron Mountain focuses on running the service.

“That makes it very, very different this time,” Sweeney said.

According to IDC, cloud archiving was a $299 millionbusiness worldwide last year and is expected to grow to $398 million in 2018.

Goodwin said it’s a business with fat profit margins of 30 to 40 percent, because data-storage gear is cheap and getting cheaper.

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But Iron Mountain must compete against Amazon.com and other big-league technology companies. “They’re definitely going up against the heavyweights,” Goodwin said.

Jason Buffington, a data-protection analyst at Enterprise Strategy Group in Milford, said Iron Mountain has no choice but to get into the cloud business, because its traditional customers need online storage as an option.

“Anybody who wants to stay relevant in data custodianship . . . needs to have cloud in their portfolio,” Buffington said.

Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him on Twitter @GlobeTechLab.