CyrusOne Scales Up its Team and its Data Centers

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CyrusOne, the colocation business of Cincinnati Bell, is mobilizing for growth across its data center infrastructure.

Cincinnati Bell may seem an unlikely candidate to become a data center colossus. But when Gary Wojtaszek arrived as the company's new chief financial officer in 2008, he recognized an opportunity in the telecom company's colocation business.

"It didn't take long to realize the data center business had a lot of potential," said Wojtaszek. "It was clear to me that if we invested more in data centers, we could transform the company from a landlocked phone company into a global player in the data center industry."

In 2010 Cincinnati Bell acquired Texas-based colocation specialist CyrusOne for $525 million and began positioning the business as the company's growth engine. The deal kicked off a flurry of deals in which telecom companies bought up data center providers, incuding Verizon’s $1.4 billion purchase of Terremark and CenturyLink’s $2.5 billion acquisition of Savvis.

Massive New Dallas Project

Now Wojtaszek is ready to take the initiative to the next level. In August he took the helm as President and CEO of CyrusOne, and is now assembling an experienced team and preparing to build some very large data centers, including a massive new project in the Dallas market.

In October former Microsoft and Yahoo data center executive Kevin Timmons joined CyrusOne as chief technology officer, and last month the company hired Mike Duckett (a veteran of Terremark and Corelink) to serve as chief operating offficer. Another recent addition is VP of construction John Hatem, who previously managed data centers for Beart Stearns and JPMorgan Chase.

Now that CyrusOne has built a team, it's ready to build some more data centers. The company is currently working on expansion proects in Houston, Austin, Dallas, Cincinnati and Phoenix. It has also opened facilities in London and Singapore.

Wojtaszek sees large opportunities in the growth of high-performance computing and the emergence of cloud computing, which drive demand for industrial-strength infrastructure.

"Our cloud strategy is basically to be the sky to everyone's cloud," said Wojtaszek. "We're just focused on just the infrastructure."

Blue-Chip Customer Base

CyrusOne specializes in high-density colocation services, with a strong focus in the energy and financial services sector.  The company’s customers include 15 of the top global 100 companies and five of the top 10.  "We're focused on enterprise customers looking to outsource their primary data centers," said Wojtaszek.

The company's new facilities will evolve to offer more options to those enterprise customers, including the ability to lease colocation space or larger dedicated suites of wholesale data center space. CyrusOne also plans to offer the option of either raised-floor space or slab designs, based on customers' preferences and efficiency goals.

"What enterprises are trying to do is gain some of the same economies of scale that Microsoft and Google have created," said Wojtaszek. "We're working on a lot of different ideas right now. We're trying to innovate and offer something that really sets us apart."

That's where Timmons comes in. In his tenures at Yahoo and Microsoft, he worked on cutting-edge facilities like the Yahoo Computing Coop and Microsoft modular design. At CyrusOne he will be working to design facilities that offer the best of both worlds - the efficiency of the huge cloud centers delivered in a form that works for enterprise customers.

Timmons' first project will be a new CyrusOne data center near Dallas. "We've got what we believe will be the largest data center in the Dallas area," said Timmons, who said the project will span "hundreds of thousands of square feet."

Despite its scope, the project isn't a speculative endeavor, according to Timmons, who said details on the project will be available in coming weeks. "We're being driven to do this by our existing customer base," he said. "We've got customers that want to continue to grow with us."

Timmons described elements of the Dallas project in a presentation Tuesday at the Garner Data Center Conference in Las Vegas, including plans to use indirect evaporative cooling, which will allow CyrusOne to leverage outside air in its cooling system. An indirect evaporative cooling system typically uses cool outside air in a heat exchanger. "Indirect has the benefit of not injecting the outside humidity into the data center," he said.

Flexible Design Approach

The CyrusOne team is still finalizing its design plans, but Timmons said the design will be flexible. "I think we can save significant amounts of money by not using raised floor," he said. "But there are those enterprises that will always want to see a raised-floor when they walk into their data center space. Part of the challenge is to come up with a design that has some capacity in raised floor, and some in what we call 'uber-efficiency' mode."

Timmons said the feedback from his Gartner presentation reinforced his impression that enterprises are cautious about new technologies, but focused on opportunities to improve their data center operations.  "They want efficiency and cost-effectiveness and sustainability," he said. "These things are important to them."

CyrusOne has also announced plans for a campus in  Phoenix that will eventually house 1 million square feet of data center space. That space will be built out gradually, Wojtaszek said. In the meantime, there are other expansion possibilities. "We need something on the East Coast to round out our U.S. infrastructure," he said.