Suppliers Snap Up Services

The storage M&A boom these isn't just about products, it's also about services and expertise.

Indeed, if you're a small services company in the storage market you may be a hot acquisition target. Check out the activity within the last week alone:

These deals are hardly setting a trend, but they're certainly continuing one. Earlier this year, EMC -- the most voracious storage acquirer in recent years -- made it clear that services rate high on its hit list by buying Internosis for its Microsoft expertise as well as Interlink for IT professional services. (See EMC Buys Windows Expertise, EMC Acquires Interlink, and FTS Picks Vox.)

Now others are doing the same. MDY is known more for its software than services, but CA storage management VP Bob Davis says services play a major role in managing records for compliance.

"It's not just a product that we acquired, it's really a program," Davis says. "Software is extremely important, but knowledge and expertise is also an important part to align regulation compliance with a storage strategy."MDY's main product is FileSurf, which helps store and track email and other digital records as well as paper documents. But MDY also offers consulting around implementation and integration of records systems -- something that CA intends to build on.

CA will eventually rebrand FileSurf under its BrightStor product line, but MDY's 70 employees will remain at its Fair Lawn, N.J. office -- an hour or so away from CA's Islandia, N.Y. headquarters. MDY CEO Galina Datskovsky will become CA's senior VP for BrightStor.

Iron Mountain's goal in buying DigiGuard is to increase its service presence in Asia -- specifically India, China, and Japan. "We're keen to move aggressively into Asia," says Bob Miller, EVP of Asia Pacific for Iron Mountain.

Like Iron Mountain, DigiGuard takes physical tapes from customer sites and transports them to vaults where they are barcoded and processed into the system. But DigiGuard does this in Asia. DigiGuard's CEO MacGregor Thompson and its 50 employees are staying on board.

Iron Mountain has already made inroads in Asia in the records and document management services space. It acquired the Australian and New Zealand operations of service provider Pickfords Records Management last October and merged two Indian services firms under the banner of Iron Mountain India last February. (See Iron Mountain Expands and Iron Mountain Expands Into India.)Notably, services firms like CA and Iron Mountain are getting calls for records management, an area Forrester Research projects will grow at a compound annual rate of 84 percent, reaching a forecast $1.3 billion by 2008.

It's an area in which there is likely to be an ongoing need for consulting and implementation help -- particularly as both MDY and Pickfords still build services around paper records in this age of digitization.

"Yes, we do physical records as well," Datskovsky says. "Fortunately, or unfortunately, those aren't going away any time soon."

Dave Raffo, News Editor, Byte and Switch

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