Up Close with Flexential’s Chris Downie at CAPRE’s Carolinas Data Center Summit “The Industry Has Evolved, But We’re Still in Early Innings”

CHARLOTTE, NC – One of the hallmark sessions of CAPRE’s Carolinas Data Center Summit was an up-close Q&A with Christopher Downie, Chief Executive Officer and Board Member at Flexential, formerly Peak 10 + ViaWest. Moderated by CAPRE’s President and Founder Brian Klebash, the session kicked off with a broad question for Downie about his perspective as a long-time, and highly respected, industry leader.

Chris Downie, CEO, Flexential

“Tell us about the times you’ve witnessed things change more quickly than others,” Suggested Klebash. “And what is your perspective on where we are in IT today?”

“Let me start by saying that it’s great to be here and it’s great to see everybody, including both industry colleagues and friends,” began Downie. “I’ve been at this for 28 years, but who’s counting? Just a little bit about my background – I spent 10 years as an investment banker, basically raising capital for emerging technologies. Back then, it was things like cellular, so obviously things have changed pretty dramatically.”

From there, Downie just jumped head first into the operating world. “I started a telecom company – BroadStreet Communications – and saw it through a period of hyper growth and restructuring – a character building experience for sure. I was ultimately then recruited into a company called Telx,” he shared. “At the beginning of 2007, even though I’d been focused on technology and internet-related businesses for some time, I wasn’t really that familiar with the data center concept. And to be honest, I don’t think there was a very wide market of knowledge, if you will. So when I came into Telx, it was a pretty small company. $50 Million, based in New York, and it had some very interesting assets. But the business model was very much being developed.”

Flexential’s CEO, Christopher Downie, participating in CAPRE’s Second Annual Carolinas Data Center Summit on May 14, 2019 in Charlotte, NC.

At that time, according to Downie, there were only two public companies – Equinix and Digital Realty. “Both of them were probably second-guessed fairly frequently, just given the whole debacle about the internet in the early 2000s, about whether they would survive as companies,” he mused. “Equinix had $500 Million in revenues and Digital Realty was probably a little bit north of that. Obviously, you fast forward twelve years and it became a very different profile.”

“So there was a lot of trepidation in those early days, in 2007, for what we were focused on at Telx, which was the data center businesses, but small colo and lots of interconnect,” recalled Downie. “Obviously we built a lot of colocation around the interconnection, which is basically just network resources that enable the data center. It was not very much appreciated at all. It was probably an 8% line item on Equinix’s P&L, and one that was never talked about in the earnings releases. Digital Realty trust ultimately leased a number of their interconnection-centric environments within their buildings to Telx, which became a foundation of what we did for the next nine years.”

“So, there wasn’t very much awareness. There was really no enterprise-outsourcing of any material extent,” asserted Downie. “No appreciation of the networks, and no appreciation of the utilities that a data center ultimately affords its customers. Over the next nine years we really saw not only the business come into its own in terms of its ability to manage mission critical environments in scale, but also leverage the network resource to enable not only the federation of data all over the globe, but also enable it in geographic architectures that enable latencies within geographies that weren’t available.”

And we can all guess what happened next – the Cloud. “In 2007 the Cloud wasn’t really a word that was used. I don’t remember exactly when it came into being but probably midway through, around 2009 or 2011,” he recollected. “And it obviously became a new utility that had significant demand. But it required a network resource as well, which made the network resource even more important.”

“It’s definitely been an evolution and I think it very much is still an evolution,” asserted Downie. “One of the prior panels talked about the innings we’re in, and I’ve always said that we’re in the early innings. And I think there is tremendous growth ahead, not only for the existing customers that have engaged in these environments already but for new adopters as well. There are different statistics, but the enterprise is probably in its early stages of taking advantage of these environments.”

“It’s the new entrants on the digital stage that are really disintermediating legacy business models, which is going to force the enterprise to come into these environments. It’s all about the new age companies who are leveraging this new utility called compute and utilizing it incredibly dynamically,” concluded Downie, before moving onto the second question. “Legacy companies, like some retailers – some of which have unfortunately gone out of business — are rapidly figuring out how to catch up. A lot of happening and there is a lot more to come.”