Autonomy, a provider cloud-based legal and eDiscovery services, plans to buy certain assets of Iron Mountain Digital which, when combined with Autonomy's operations, has the potential for building one of the world's largest data clouds.
However, the size of the customer data in Autonomy's cloud is expected to be dwarfed in importance by the ability of Autonomy to use its technology to derive meaning from the data to apply a wide range of regulatory compliance, legal discovery and analytics services to private clouds around the world.
Under the terms of the deal, which is expected to close within 60 days, Autonomy plans to pay $380 million in cash to acquire certain of Iron Mountain's digital archiving, eDiscovery, and backup and recovery services.
Boston-based Iron Mountain last month said it plans to cut its Virtual File Store service and its Archive Service Platform offering no sooner than the first half of 2013, and that it stopped taking on new customers for the services as of April 1.
On the archiving side, Autonomy will get Iron Mountain's NearPoint midrange and enterprise archiving solution for on-premise e-mail, SharePoint, and other files, as well as Digital Record Center-Compliant Messaging, a comprehensive and integrated compliant archiving service
Autonomy will also get Iron Mountain's eDiscovery SLDS, a comprehensive suite of solutions including legal discovery, litigation support, legal review, litigation preservation, and archiving.
Also included in the deal are Iron Mountain's backup and recovery solutions including Connected, an enterprise cloud-based backup solution for PCs and Macs that ensures security of critical data assets, and LiveVault, a cloud-based, large scale server and application data backup and recovery service.
The deal will also add over six petabytes of data under management and more than 6,000 customers to Autonomy's customer base, bringing Autonomy's private cloud data to over 25 petabytes and total customer base to over 25,000.
After the acquisition, Autonomy expects to be hosting 70 billion files hosted in Autonomy systems and ingesting 3 million new files every hour into its storage cloud.
With the acquisition, Autonomy will be running 25 petabytes of data in the cloud, said Michael Lynch, CEO of the Cambridge, U.K.-based cloud services provider, during a financial analyst call to explain the deal.
"We believe that that is probably the largest platform for cloud data of a meaningful type of data in the world," Lynch said.
The data will allow Autonomy to run multiple meaningful services in the cloud, including regulatory, eDiscovery, search, and audio and video and text analytics, Lynch said.
The ability to run those services comes from Autonomy's Intelligent Data Operating Layer (IDOL) Server. The IDOL Server collects indexed data and stores it in its proprietary structure, which is optimized for fast processing and retrieval of data.
As the information processing layer, IDOL automatically forms a conceptual and contextual understanding an enterprise's content by analyzing any piece of information from over 1,000 different content formats and even from users' interests. Over 500 operations can be performed on digital content by IDOL, including hyperlinking, agents, summarization, taxonomy generation, clustering, education, profiling, alerting and retrieval, Autonomy said.
"We believe that by injecting our dark server IDOL technology into these assets. . . this will lead to a significant improvement in the growth rates and margin of the assets as well as allowing much more powerful functionality to the customer base," Lynch said.
Next: It's Not The Size Of The Cloud, But The Value Of The Data
Whether Autonomy will be running the largest number of petabytes in the cloud is arguable, Lynch said. However, what Autonomy is doing with those petabytes is the most important differentiator.
"(Autonomy has) access to all of the messaging and e-mail, the very lifeblood of the operations of the company (for which) we are holding the data," he said. "With this acquisition, we add to that the data that is available on the desktops, the Macs, the PCs, and the mobile. We do not believe that anyone else has the view on enterprise corporate data approaching this."
"The acquisition puts us in the position of owning the data in the cloud at a time when we are just beginning to see the possibilities of creating new functions and businesses around that," he said.
Lynch also said that Iron Mountain was charging too much for basic functionality, which led the company to the point where it decided it had to leave the market. Autonomy will drop the cost of the basic service, making it easier for customers to consider adding more of Autonomy's services, he said.
The deal also represents Autonomy's first venture into the online data protection market, Lynch said.
Autonomy will invest in growing its new backup and restore business. "(It) puts into our cloud a whole set of new types of information on which we believe we can offer a whole series of new functions to customers by virtue of meaning, really reeling analytics into a new age," he said.
Autonomy said it will continue to support active Iron Mountain Digital customers without disruption.
Iron Mountain declined to comment on the story.