At a time when technology journals are reporting on a weekly basis about advances in cloud computing, ongoing cloud deployment and how lucrative the cloud market is and will be, the announcement that Iron Mountain (news, site) is stepping out of the public cloud storage market is somewhat of a surprise.

The news broke at an event recently when, according to Gartner, Iron Mountain confirmed that it had stopped taking new customers as of April 1 and that it would help existing customers either migrate to another provider, or move to its higher-value offering, File System Archiving, next year sometime.

Customers also have the option of having their data restored to them, which will come no doubt as a relief, while the new Iron Mountain offering will provide them with a hybrid system that offers a mixture of on-premise policy-based archiving and cloud storage with indexing and classification.

Public Cloud Storage Market

While there has been a lot of head-scratching around the decision and a number of possible reasons have been put forward, Gartner says that this is not the first company to make such a decision even if it is by far the highest-profile company to make it.

In fact, Iron Mountain is the third such announcement in recent times, the other two being:

  • Vaultscape: Closed its doors in 2010 after launching its service in 2009
  • EMC: Took Atmos Online out of service only a year after setting it up in 2009, citing conflicts of interest

Worth noting at this juncture is that all three service providers went to market without any other cloud computing services to offer.

Iron Mountain’s Virtual File Store file service was also launched in 2009, well in advance of many other vendors,  and one might have thought that it had enough time to establish itself in such a way so as to be well-grounded there before the rush; it seems not, though.

But is this the real reason it is divesting itself of this service? A further announcement this week might also provide some food for thought in this regard, and if it’s not the principal reason, which no one seems to be able to agree upon anyway, then certainly it must have had some bearing on the decision.

Boardroom Battles?

That announcement was that CEO of Iron Mountain Bob Brennan has stepped down to be replaced by Richard Reese, who was CEO of Iron Mountain beween 1981 and 2008 and is generally credited with having grown the company that recorded a net profit of US$ 220.8 million in 2009 -- which dropped to a net loss of US$ 53.9 million in 2010 even though revenues hit US $3.1 billion that year.

There is also the fact that there has been fighting at the board level, with the Boston Business Journal reporting that one of its investors,  Elliot Management Corp., has been pushing over the last few months to change the direction the company is going.

According to the Journal, Elliot has been putting pressure on the company to get rid of its digital storage interests and reincorporate itself as a real estate investment trust.

Whatever, the reason, though, this particular battle is a long way from over, and, with the immediate reinstatement of Reese as CEO, it looks set to rumble on for a while.

The bottom line, from a technology perspective, is that Iron Mountain is effectively out of the public cloud storage market for the foreseeable future at least. Where it goes from here is anyone’s guess.