In a previous blogpost, I suggested that a new breed of consulting and professional service firms are in a very good position to capitalize on the transformation of the technology industry from a product-centric to a web-based services orientation.
Now, even established players are beginning to recognize the importance of their consulting groups in today’s rapidly changing market. No, I’m not reversing my view that companies like Dell (NASDAQ:DELL) and HP (NYSE:HPQ) are on the wrong path by trying to fortify their wholesale outsourcing businesses with their acquisitions of Perot Systems (NYSE:PER) and EDS (NASDAQ:EDS) respectively. Instead, I’m referring to more specialized consulting units of domain/subject matter experts who can serve as ‘trusted advisors’ to customers, and are a subtle channel-to-market for the broader vendor’s products and services.
This point was brought home yesterday during Iron Mountain’s (NYSE:IRM) annual analyst day. I reported on the company’s first annual analyst day three years ago, when I suggested that Iron Mountain had an unusual opportunity to ‘cross the chasm’ from the physical storage business to the brave new world of digital services.
While the company has made progress over the past three years in building its digital services business, it hasn’t fully realized its vision of a highly integrated portfolio of physical and digital services because of a combination of external and internal factors.
The company realigned its executive team in 2010 and is now putting more emphasis on the value of its consulting capabilities as a catalyst for the delivery of integrated physical and digital services. This move is also being driven by the new corporate leadership’s bolder mission for Iron Mountain of becoming the leading provider of information management services rather than its narrower focus on data storage alone in the past.
The timing of this move could be very advantageous given the explosion of data, escalating compliance concerns, uncertain economic climate and confusion surrounding cloud-based services. Organizations of all sizes, but especially mid- and large-scale enterprises in specific industries, are grappling with these issues. Rather than turn to the technology leaders who are viewed as biased product vendors, many of the IT and business decision-makers in these organizations are more comfortable asking their trusted service providers for help.
Putting more emphasis on the company’s consulting capabilities will be particularly timely for Iron Mountain in the healthcare and other industries which are plagued with inefficient systems, tightening budgets and changing market requirements. This was illustrated during panel sessions at the analyst briefing which included Iron Mountain customers at Biogen Idec (NASDAQ:BIIB), CSX Transportation (NASDAQ:CSX) and the New England Baptist Hospital.
Disclosure: No positions. Author has published whitepapers on behalf of Iron Mountain and participated in Iron Mountain webcasts.