Iron Mountain quits IaaS market

Storage and recovery firm Iron Mountain has announced plans to shelve its public cloud offering.

Having been in the market for two years, it is the third infrastructure-as-a-service (IaaS) provider to phase out its services over the past year. The others are Vaultscape and Atmos Online (from EMC), both of whom withdrew their services in 2010.

Adam Couture, research director at analyst firm Gartner, said that public cloud providers operate on extremely thin margins.

First, IaaS tends to be lower volume than other cloud services such as software-as-a-service and platform-as-a-service, meaning the margins are tighter.

And second like all public cloud providers, IaaS providers must compete with Amazon.

"Iron Mountain were charting 25 cents per gigabyte per month, while Amazon charge only 15 cents for the same service. It's extremely aggressive. Everyone has to compete with Amazon," Couture said.

Couture explained that Amazon is able to charge so little as it has not set up its centres specifically to enter this market, but is leveraging existing storage capacity.

"Amazon didn't build an infrastructure to provide IaaS, they built it to support their retail business. They're simply selling their excess capacity."

He added that to be profitable, an IaaS provider should look to offer additional services on top of storage.

"You need to look at what else you can leverage to bolster the low margins associated with public cloud storage. Amazon charges extra for networking. AT&T does analytics. Dell see storage as a way of selling hardware."

Offering compute services also makes a storage solution more attractive.

"Web 2.0 developers want compute in addition to storage. Iron Mountain didn't offer that."