“Who Wouldn’t Want to Buy CyrusOne?” Stuart Dyer Comments on M&A Speculation at CAPRE’s Mid-Atlantic Summit
LEESBURG, VA – CAPRE always keeps a finger on the pulse of the most disruptive and intriguing developments in the data center industry, and that’s why Up Close: The CyrusOne Growth Story was a central session at CAPRE’s Seventh Annual Mid-Atlantic Data Center Summit at the Stone Tower Winery in Leesburg, VA last week. Moderated by Jeffery Ivey of Strategic Development at CPG, the session featured the input of two CyrusOne insiders, who shone a bright light on the meteoric rise of CyrusOne.
After some slides by Craig Deering, CyrusOne’s Director of Design & Construction, Ivey asked Stuart Dyer, Business Development Manager at CyrusOne a clutch question. “What would you say is the biggest differentiator for your business for different verticals?” he posed.
“From a sales perspective, we have two focuses in the organization. One is to go after the traditional data centers, which historically we’ve been very good at,” replied Ivey. “Another is to go after the hyperscalers, which in the past handful of years, we’ve exceled at and has really driven our growth.”
“Per Craig [Deering]’s point earlier, our design and our topology, in deploying these 3,000-60,000 square foot data halls [means that] we’re very well-situated to capture both of those types of customers,” he explained. “We continue to do very, very well in the enterprise space.”
Next, Dyer zoomed into the state of the Cloud. “As I think you’ll see throughout the day today, the Cloud was a wave that came into Northern Virginia four or five years ago. It slowed down a bit this year, and it’ll eventually and inevitably pick back up,” he predicted. “But it’s a little bit lumpy. Customers are coming in and taking down those 36,45 MW data halls, so what’s really kept our growth consistent is those enterprise customers and our ability to meet both demands by the way that we build.”
According to Dyer, getting build costs to such an efficient level — the best in the industry — means that CyrusOne was able to pass those pricing benefits directly to our customers. “We’re able to provide our customers, whether they’re in enterprise or Cloud, a wholesale rate in a truly robust, 100% SLA type of facility” he concluded. “That’s provided us with a true competitive advantage in the market.”
At that point, Moderator Ivey pivoted further into the future. “The hyperscale providers have shifted to somewhat of a build-your-own model, building their own powered shells with massive land grabs. How do you see yourself continuing in the market with that shift?” he asked Dyer.
“Every customer is special, every customer has got some wacky requirement, whether it’s security or power infrastructure. Whatever it is, this is where the balance and the magic is,” he replied. “I can take a set of requirements, which no one has ever seen before, to Craig, and Craig will look at them, give them to our sub-contractors, and we’ll show consistently the ability to do one-off type of customer projects that meet specific customer demands. That very simply has differentiated us in pursuits – whether it’s in timelines, or in our construction bill, this team has the ability to look at these things, and then work with the customer collaboratively on customizing that solution.”
“I truly feel that whether it’s a SKIF or a Cloud project with a tight timeline, or a private suite in one of our data halls, that ability to work with the customer – and not just say, this is our project, take it or leave it – that has led to some of the most exciting projects I’ve ever worked on,” Dyer stressed.
Finally, Ivey cut to the chase. “We’ve all seen the news about recent speculation on [an acquisition of the] company,” he mused. “Where do you see things going in the future?”
“This is the deal. In 2014 a lot of people didn’t know who we were and now everybody is talking about, are we going to get sold? Look at our continued growth trajectory – as a publicly traded company I certainly cannot comment on the rumors, but what I can tell you publicly is, who wouldn’t want to buy CyrusOne?” he asked the room of 250+ attendees.
“Look at the way we’ve been growing and with our continued growth. We’ve invested very heavily in Western Europe, I think I saw in Allen [Tucker]’s presentation, he used the term FLAP (Frankfurt, London, Amsterdam, and Paris), and those are the markets that we recently made an acquisition in, and we’re starting to go big on these European cities,” Dyer shared. “And you may have heard me say this before out there today, but if I’m looking at the data center as a whole as a baseball game, I think we’re at the bottom of the third inning. And I think there’s a whole lot of game minutes left to be played. The work we’ve done here in this market at CyrusOne is not going to slow down.”
In other words, it’s no surprise to Dyer that there are parties interested in acquiring CyrusOne, especially since the industry has seen so much M&A over the past couple of years. “We saw the Terremark-Equinix thing, and the Dupont Fabros-Digital Realty thing, and there’s going to be more and more M&A,” he forecast. “All we can do is what we do best, which is delivering a service to our customers, both Cloud and enterprise, and continue growing like a weed.”
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