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You are here: Home / Cloud / Iron Mountain Steps Up Its Data Center Ambitions

Iron Mountain Steps Up Its Data Center Ambitions

By Rich Miller - September 19, 2017

Iron Mountain Steps Up Its Data Center Ambitions

It seems like the more companies work on renewable energy, the more they realize how important collaboration is.(Photo: Rich Miller)

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MANASSAS, Va. – As you arrive at the newest data center in Northern Virginia, it’s hard to miss the name of the facility operator. Iron Mountain’s name is emblazoned on the front of the building, a change from many data centers that bear no exterior identification. Iron Mountain sees the value in leading with its brand.

Iron Mountain is ready to make its presence felt in the data center business. After several years of building its operations and proving out its business assumptions, the company is ramping up its investment in data centers.

Iron Mountain envisions several paths to growth, including new construction as well as acquiring other service providers and existing facilities, including underused enterprise data centers.

On the new construction front, the company opened the doors Friday on the $80 million first phase of its data center campus in Manassas, Virginia. The VA-1 data center is a down payment on a larger commitment to the Northern Virginia market, where Iron Mountain plans to build four facilities totaling $350 million in investment.

“The data center business is Iron Mountain’s fastest growing business,” said William Meaney, the President and CEO of Iron Mountain. “This represents a major expansion of our data center business. I think you can expect we will build more campuses like this.”

Iron Mountain is an example of an experienced company that sees opportunity in the data center industry. Iron Mountain has spent 60 years building a reputation as the leading provider of document storage, with more than 230,000 customers around the globe. It believes it can leverage the power of its brand to win data center business, particularly with customers in the government, healthcare and financial sectors that already partner with Iron Mountain to meet regulatory compliance requirements.

“The data center business is Iron Mountain’s fastest growing business,” said Meaney. “This as an area that makes sense with our customers, our brand and our history. At Iron Mountain, it’s our job to be the trusted guardian of the assets that matter most for our customers. If you put a different logo on the door, there would be a different fill rate.”

Big Plans for Manassas Campus

Iron Mountain is opening its Manassas facility with half of the first phase pre-leased. One of the customers is Virtustream, an enterprise cloud provider owned by Dell Technologies that focuses on cloud migrations. Last week Iron Mountain also launched its Iron Cloud, a cloud storage offering optimized for enterprise “big data” requirements.

VA-1 is a 165,000 square foot, 10.5 megawatt data center. With 83 acres of land, Iron Mountain has enough property to build three more data centers like it. The abundant land enables Iron Mountain to design its campus as a high-security data center, with generous setbacks and access control that can meet the stringent requirements of federal agencies. Iron Mountain offers multiple layers of security, starting with a fence and manned guard booth at the entrance to the campus. Iron Mountain has extensive experience working with data center customers on compliance with standards including HIPAA, FISMA, ISO 27001, PCI-DSS 3.1 and SOC 2 Type II.

Iron Mountain's VA-1 data cenetr is a 165,000 square foot, 10.5 megawatt facility, with room for expansion on the campus. (Photo: Rich Miller)

Iron Mountain’s VA-1 data center is a 165,000 square foot, 10.5 megawatt facility, with room for expansion on the campus. (Photo: Rich Miller)

“This data center, like our others, is especially suited for heavily-regulated enterprises, cloud providers and government agencies who seek a highly secure, highly compliant environment for hosting their data center operations,” said Meaney.

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The initial buildout features two data halls, which are each 11,000 square feet and support 1.5 megawatts of capacity each. Iron Mountain said Friday that it is commencing the second phase of construction at Manassas, which includes two more data halls, with a third phase to follow. Once the building is filled, Iron Mountain can add buildings to expand capacity, with 60 megawatts of electricity available to the campus. Power is available from NOVEC at about 5.5 cents per kilowatt hours, the company said.

The power and cooling infrastructure is housed in separate equipment rooms, allowing the entire data hall to be used for customer IT equipment. The VA-1 facility received Tier III certification from the Uptime Institute for both its design and construction.

“We loved the physical location,” said Chris Bair, Vice President of Sales & Marketing at Iron Mountain Data Centers, who noted that the the company hires and trains its own team for physical security, rather than using contractors. “It’s a cultural issue.”

A Brand Built on Data Protection

Iron Mountain was founded by Henry Knaust, a mushroom farmer who had acquired an underground iron ore mine to expand his operations. When the mushroom market struggled, he refocused his business, converting part of the mine into “vaults” to store documents and microfilm. The company steadily grew into the market leader for secure storage of documents and magnetic tape storage for disaster recovery. In 1998 the company acquired the National Underground, which operated a 130-acre storage facility in a 200-foot-deep limestone mine under Boyers, Pa.

One of the customer data halls inside the Iron Mountain VA-1 data center in Manassas. The facility will have six of these 11,000 square foot halls. (Photo: Rich Miller)

One of the customer data halls inside the Iron Mountain VA-1 data center in Manassas. The facility will have six of these 11,000 square foot halls. (Photo: Rich Miller)

Around 2008 Iron Mountain began leasing wholesale and retail colocation data center space in its massive underground facility in Pennsylvania. It also operates a data center in a subterranean facility in Lenexa, Kansas. In 2013 the company began seeking to expand its data center business, partnering with Compass Datacenters to build a new multi-tenant facility at an Iron Mountain campus in Northborough, Mass.

Iron Mountain has carefully tracked the financial progress of its data center business, and Meaney likes what he sees, especially the 25 percent organic growth rate.

“We’ve been growing at roughly two times the pace of the broader colocation sector,” said Meaney. “If you look at it from an investor standpoint, you want to make sure Iron Mountain is offering something better and different.”

Meaney believes Iron Mountain is positioned to build a strong business atop its relationship with security-conscious customers in highly-regulated industries. Iron Mountain says it can offer a higher-touch support experience than the data center REITs that represent their competition in Northern Virginia. Meaney sees support as a key differentiator for enterprises looking to outsource their data center infrastructure to the cloud or a colocation facility.

“We think that as the speed of outsourcing grows, customers want more confidence in their data center provider,” said Meaney. “This is part of our DNA. It is natural to us, and it is an important part of what customers want.

“More than 60 percent of highly-regulated customers are in-sourced today,” Meaney added. “We believe our site offers a compelling proposition for federal agencies.”

Iron Mountain: We’ll Be Active in Data Center M&A

Iron Mountain has a history of growing through acquisition, and that will be the case for its data center business as well. In July, Iron Mountain acquired FORTRUST for $128 million, adding 9 megawatts of capacity in Denver. FORTRUST’s historic focus on high reliability and security aligns with Iron Mountain’s heritage in information storage and data retention.

Meaney says that building data center campuses like the one in Manassas offer the best return on investment, offering economics of scale and highly-efficient infrastructure for customers. But he said Iron Mountain will also focus on acquisition opportunities, which enable the company to scale more quickly and enter new markets, including key global finance hubs.

Iron Mountain CEO William Meaney speaks Friday at the opening of the company's VA-1 data center in Manassas, Virginia. (Photo: Rich Miller)

Iron Mountain CEO William Meaney speaks Friday at the opening of the company’s VA-1 data center in Manassas, Virginia. (Photo: Rich Miller)

“You can expect us to continue to look at M&A,” said Meaney. “Part of the calculus is that we think that it is important for us to grow faster than greenfield opportunities.”

“There’s definitely a vendor consolidation beginning to take place,” said Mark Kidd, senior vice president and general manager, Iron Mountain Data Centers.

Iron Mountain is taking a close look at the potential to grow through sale/leaseback transactions, which provide a combination of recurring revenue from an anchor tenant (the former owner) and upside from leasing vacant space.

“Many companies have a grossly underutilized but technically relevant data center,” said Meaney. “We are having discussions with large, sophisticated global customers with partially empty data centers serving their applications. We can engage in buying those data centers. I feel really confident that we will find some assets and punch above our weight when these opportunities come up.”

Government facilities and financial services data centers are among the possible growth areas for sale/leaseback deals, and the company’s search will include international sites.

“We look globally now,” said Meaney. “We’ve been focused on the U.S. until now, but we operate globally. In some place, this may be the best way in.”

“Clearly that strategy has to be the right markets and locations around the world,” added Kidd. “As we think about sites, it’s about how you make sure it has enough scale. The opportunities need to be of a scale that’s relevant to Iron Mountain.”

"I love data centers," says Virginia Governor Terry McAuliffe, speaking Friday at the opening of the new Iron Mountain campus in Manassas, Va. (Photo: Rich Miller)

“I love data centers,” says Virginia Governor Terry McAuliffe, speaking Friday at the opening of the new Iron Mountain campus in Manassas, Va. (Photo: Rich Miller)

Iron Mountain is entering the fastest-growing data center market in the world. Northern Virginia is also the most competitive market, and much of the development focus has been in Loudoun County, and particularly Ashburn.

The Manassas facility boosts the data center presence in Prince William County, which also includes CloudHQ and several campuses for Amazon Web Services. Friday’s launch announcement featured an impressive lineup of government officials, including Virginia Gov. Terry McAuliffe, and U.S. Congressmen Robert Wittman, Gerry Connolly, and Kevin Yoder and Prince William County Supervisor Jeanine Lawson, who described Iron Mountain’s investment as “manna from heaven.”

“Since 2006, more than 6,600 new jobs and over $11.8 billion in investments have been announced in Virginia’s data center industry and we are thrilled to add this important project to that roster,” said Gov. McAuliffe.

“I love data centers,” McAuliffe added.

According to Iron Mountain, there will soon be more data centers to love, all bearing its distinctive brand and logo.

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Tagged With: Iron Mountain, Manassas, Northern Virginia, Prince William County

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I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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