Iron Mountain, Virtustream Partner to Develop Backup Cloud Storage

September 7, 2016 Jeff Ferry

Putting the Last 20 Years of Corporate Data Into The Cloud

8x8 communications

Backup and archiving storage leader Iron Mountain (IRM) is partnering with cloud and software provider Virtustream to add cloud capabilities to Iron Mountain’s international storage infrastructure, according to executives at both companies. “This is an exciting deal for both of us,” said Virtustream president and CTO Kevin Reid (above, left). “Data protection and long-term retention is Iron Mountain’s strength and the majority of the enterprise world has used them for those services, whether knowingly or not, and if we can bring together compute power on demand and high-performance storage, and now on top of that long-term retention, you can connect an entire world of past data stores, and that becomes very powerful.”

Iron Mountain runs a huge storage operation, comprising 1,400 facilities and more than 26,000 employees serving 220,000 customers, including 94% of the Fortune 1000. Its revenue in Q2 2016 was $884 million, up 16% on the year-earlier quarter. It claims a 26-year compound annual growth rate of storage rental revenue of 16.5%. Most of its vast storage library is maintained on tape, but it has begun building a cloud facility to store secondary storage data in online storage arrays, which are more easily accessible than tape on a shelf. To manage that cloud, it’s purchasing Virtustream’s proprietary software package, xStream.

Virtustream is best known as a cloud service provider but it has been selling its xStream cloud management software to other service providers since well before its 2015 acquisition by EMC for $1.2 billion. Iron Mountain Data Management CTO Eli Almog (above, right) explained to the Daily Cloud that Iron Mountain is building a cloud infrastructure and using xStream software to cut storage provisioning times down “from months to minutes.” “Customers are getting smarter, they expect to consume services on a self-service basis,” Almog told the Daily Cloud. “We are partnering with Virtustream to use xStream to deliver multivendor storage, whether it’s block, file, or object storage. Our goal is to provide a much better customer experience.”

Eileen Sweeney, General Manager of Iron Mountain’s Data Protection business unit (above, center), explained to us that while the bulk of Iron Mountain’s storage archives reside on some 55 million tapes, the cloud storage infrastructure is growing much more rapidly, at around 30% a year, from a small base. Tape is still growing though, at some 3%-4% a year. While Amazon Web Services and Google Cloud Platform have pushed storage prices down to pennies per gigabyte, Sweeney said Iron Mountain did not consider public cloud providers, and is building its own cloud infrastructure. “Our brand is associated with security and trust,” she told us. “Our customers want to know exactly where their data is, and how they can get their data out. For a lot of industrial companies, their number one issue is getting the compliance they need.”

That makes Virtustream a good fit. Virtustream built its cloud business catering to the needs of larger enterprises running complex applications like enterprise resource planning (ERP) and databases. xStream provides those multitenant capabilities with a high level of security for every customer in the cloud. “xStream gives us isolation all the way down to the hardware layer,” said Almog. “A customer doesn’t share any physical resources with any other customer.”

The Iron Mountain executives acknowledged that the xStream deal has a value in the seven-figure range, but stressed that it is more of a partnership than a simple software purchase. “We’re going to be co-designing additional features,” Almog said. Virtustream’s Reid said the partnership with Iron Mountain helps Virtustream build out a broader set of services for enterprise customers: “Longer term, our plan is to have an ecosystem of a number of very capable service providers with a global footprint, offering mission-critical capabilities, all using xStream software and all deployable from a single console. With Iron Mountain’s specialized skillset, we’re looking at this deal to broaden our global reach, to develop more capabilities for xStream, and to expand our ecosystem. It’s a win-win for both of us.”

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