Q&A with Evoque Data Centers Solutions’ Tim Caulfield

MIAMI, FL — Tim Caulfield is CEO and President of Evoque Data Center Solutions. He is a globally versed IT professional who has profitably built IT intensive companies ranging in size from Fortune 500, to small-cap, emerging, and start-up, and is now using that collective experience to guide companies through their IT strategies and implementations. Evoque Data Center Solutions, a global data center provider, with 31 data centers in 11 countries and 25 markets. Tim was named ‘Most Admired CEO’ by the San Diego Business Journal in 2012. In this Q&A, we connected with Tim to showcase Evoque’s journey as the new player on the scene as well as explore the latest dynamics setting the pace in the data center arena.

New SquareCAPRE: Thanks for chatting with us today, Tim. How are things going at Evoque?

Caulfield: We’re the new player on the market. We’re the end result of an investment by Brookfield Infrastructure Partners in to the data center assets of AT&T. The deal was announced in Q1 of 2018 and we closed in December. We’re essentially 1 quarter old. Evoque is a true carve out. What we acquired from AT&T was 31 data centers around the world and the employees operating them. We did not get sales, marketing, legal, IT, HR, or an executive team. Or any of the systems. So we’ve been very busy standing the company up, and operating independently of AT&T.

CAPRE: What are the takeways from this very busy quarter?

Caulfield: We’re very pleased with the activity from Q1 and the engagement from our customer base, and the excitement there about what we’re doing. AT&T was largely invisible. Most of us didn’t think of them as a direct competitor. So we’re revitalizing the business, and the market has been very accepting of what we’re doing. Everybody is very pleased, over 1 quarter into it, at this point.

CAPRE: What kind of strategies are you employing as you establish your new brand?

Caulfield: The business owned by AT&T was not carrier-neutral. They had a few providers but for all intent and purposes, if you were a data center customer with AT&T, you were probably utilizing the AT&T network. So one of our big initiatives right now has been to drive greater carrier diversity into the facilities. We’ve been building out meet-me-rooms in our center as well as speaking with many of the major and secondary carriers, to have them start building into our facilities.

That project is going extremely well. We expect to be ready to accept new carriers in any of the facilities by the end of April or early May. So that’s nothing new from an industry stand point, but it’s a key component of our go-to-market strategy, and it will put us on a better posture.

CAPRE: What else is important in these early days, perhaps regarding connectivity?

Caulfield: We’re also bringing in folks like Zayo, Packet Fabric, and Megaport. We’re in early stage talks with some hyperscalers about building out their on-ramps. So for us, it’s all about allowing our customers to have greater choices with the providers, and the ability to reach the cloud companies.

CAPRE: Are you anticipating playing in any new spaces, tech-wise?

Caulfield: We’re very much looking at what’s going on with the whole Edge concept and what it means to be, or what’s needed to be, an Edge data center player. That conversation is continuing to evolve, depending on the type of use cases. The requirements of an Edge data center changes. We’re engaged and talking with other members in the industry, and we do think we have a unique opportunity. Our investors, our parents if you will, are Brookfield Asset Management, one of the largest commercial real estate owners in the world. So if you think about it, they already have a lot of property all over the globe. And one thing that most people would agree on is that data centers at the Edge are smaller – either a little smaller or a lot smaller. So we already have, through our parent, access to potentially hundreds of thousands of locations around the world. We’re hoping to bring data center expertise to the table. There’s definitely the potential that it could help us to build out a compelling Edge solution.

Tim Caulfield, President & CEO, Evoque Data Center Solutions

CAPRE: Do you think the data center industry is on the precipice of a new era? Will we see even more consolidation?

Caulfield: I think there are a couple of things going on. Number one, the industry continues to be very attractive for a lot of investors, including new investors. There’s still a lot of new money on the sidelines that is working to get in. There’s also, certainly, a lot of players who have been in the market for many years, and understand it very well, and they continue to look for opportunities.

CAPRE: Tell us more about the capital markets — what’s the latest?

Caulfield: There are a couple of things happening. One is that the market is maturing. For the last 10-15 years, we went from the early stage data center companies being started by founders, if you will, to private equity coming in and making investments in the sector. By and large, private equity has dominated the investments in the data center sector. And now, with Brookfield, who is an institutional investor that invests in infrastructure, coming into the market, and others like them, they’re take a much longer-term approach to the market.

Whereas as private equity investors might be looking for a return in 3-5 years, Brookfield is probably thinking more 10+ years. So that has changed the dynamics in the market, and you’re going to see more and more of these types of investors coming in.

CAPRE: Who will survive and who will thrive as we head into 2020 and beyond?

Caulfield: Because there’s all this money and the aforementioned consolidation, companies are getting bigger. So it’s harder and harder for some of the smaller data center players in the market to compete. Some of them have great offerings, but they simply don’t have the cash flow to make the investments that they need, to continue to grow.

So I’d expect to see more consolidation, perhaps with those making $100 million in revenue and below. Those local players and the smaller national players. So you’ll see a lot more focus on scale. And with that, the number of players will start to shrink.

CAPRE: Do you anticipate a slowdown anytime soon? What might cause that?

Caulfield: The sector has weathered a number of downturns over the years. I’ve been in it for a long time, and I remember back in the early 2000s when everyone thought the tech sector was dead after the dotcom bubble burst. But it came back better than ever. And certainly in 2009 after the financial downturn, it slowed. But it didn’t stop. And I would expect the same type of trends going forward. There’s going to be a global economic downturn. I’d expect that data center growth will slow, but demand will still be there. As long as we have this tech in our lives, there will be a need for data centers and technology infrastructure. At the end of the day, it does not live in the Cloud. It lives in a data center.

CAPRE: Finally, how is Evoque poised to make a name for themselves?

Caulfield: One of these things we bring to the table is a global footprint. We’re on four continents. North America, Europe, Asia and Australia. This comes back to scale. We’re already seeing that having that global presence definitely matters to a subset of customers. I was recently in Europe, touring the various markets, and came away even more bullish on Europe than I was, and how it can play into what we’re doing.

CAPRE: Got it. Thanks so much for your time Tim. We’ll see you at a CAPRE Data Center Summit soon!