“Any agency and any customer that is looking for a robust enterprise data center co-location facilities across all of our locations, big or small, we have the ability to service them.”
EM: Let's start with your background and experiences and how that prepared you for your current role.
Stu Dyer: My career has been in building business relationships in new verticals for IT companies. Before CyrusOne I helped create an indirect sales model at Apptix, a reseller of Microsoft cloud based products with revenue at the time in the $40 million range. In 18 months I boosted the channel revenues from $4 million to over $30 million.
That experience in forming strategic alliances set the stage for my move four years ago to CyrusOne, a premier provider of colocation space to the federal government in partnership with federal systems integrators to deliver data center services. Timing is everything, and my move coincided with the company's newfound focus on conducting business with system integrators that are doing business with the federal government, these ongoing relationships continue to grow.
What aspects of business development do you believe to be the most difficult? What type of difficulties are you facing today?
Dyer: The changing approach to data center services in the federal world is much more of an opportunity than a challenge, and CyrusOne is uniquely positioned to deliver important services in line with the current strategies of the federal government. With data center transformation and cloud adoption being strongly encouraged, government agencies are outsourcing their applications and infrastructure. We are just at the beginning stages of that evolution, as the federal government continues to leverage the benefits of the cloud by modernizing their legacy infrastructure and applications. While the federal procurement cycle can take years, and with the budget continually being impacted by Congress, it creates unique challenges for a commercial company trying to enter the federal sector. However, through perseverance and the establishment of some key strategic partnerships, the CyrusOne team is realizing the benefit of being in the federal space.
Technology professionals in the federal government are navigating the cultural hurdle of allowing their infrastructure, applications and hardware to be off premise entrusting the integrator community to support their future requirements. At CyrusOne, we are working closely with the GSA on the new DCOI (Data Center Optimization Initiative) that will continue to push the agencies to modernize by leveraging best available commercial products for their modernization efforts.
What aspects of cultural hurdles are you referring to?
Dyer: Like most organizations, historically federal agencies have preferred to maintain physical control of their IT assets, infrastructure and physical security in their own facilities and are now being encouraged, if not mandated, to outsource. It isn't a unique challenge. Nearly all large private organizations operating on-premise legacy infrastructure have dealt with the same issues. The objectives of the GSA's Data Center Optimization Initiative, which include power monitoring, lower PUE's, and a more efficient usage of data center space are challenging. In the next evolution of the Federal Data Center Consolidation Initiative, agencies are now mandated to take a different approach as they modernize their infrastructure. Instead of having physical ownership of the infrastructure and the data itself, there is now more of a focus on SLA-driven contracts. It is a departure from the way that the federal government has been conducting business over the past few decades. This evolution is in its early stages and the migration towards cloud computing will only increase in the years ahead.
Can you characterize the types of solutions and services that you focus on and some programs related to FedRAMP and Fisma?
Dyer: CyrusOne focuses on providing enterprise-class, robust co-location data center facilities to the systems integrator community in their support of providing cutting-edge technology back to the federal government. Our focus is providing the core infrastructure environment that includes, space, power, cooling, security and facilities to the integrators and the agencies. Whether the integrator is supporting the DoD, the intelligence community or a civilian agency, they can use and leverage CyrusOne as the underlying infrastructure provider for that agency.
For example, we recently partnered with Red River, a technology transformation company, to help a large federal healthcare agency create a lab environment that showcases how the agency could modernize their aging storage environment and meet the provisions of the government's Cloud First mandate. CyrusOne provided the core infrastructure and network connectivity, while Red River provided enterprise-class data storage, managed IT services, software/firmware regression testing, solution development and life-cycle management. Our lab environment demonstrated that the agency could keep patient data on-site, while delivering flexible, scalable as-a-service storage options on demand. These are the kinds of programs that are being developed in CyrusOne facilities. They can be in a small cage environment with a handful of racks all the way up to a customized build-to-suit data center campus for one dedicated client. Any agency or commercial customer that is looking for robust enterprise data center colocation facilities, we have facilities of various scale both in the DC-area and nationally to serve them.
Could you explain what it means that your approach to engineering is ‘massively modular’?
Dyer: A CyrusOne we've learned to leverage the economy of scale that comes with large, purpose-built data centers. As a result, 9 of the 10 largest cloud providers are CyrusOne customers, and we've been working with several of them for years in optimizing design and construction processes with the requirements of large data center users in mind. These repeatable processes lead to the commissioning of data center infrastructure that suits their needs, budgets, and speed-to-market requirements. Today, we have over 2.5 million square feet of data center facilities under management with the ability to expand to over 7 million square feet on the land CyrusOne currently owns, and those numbers are growing by the month. We are currently the third largest data center provider in North America, as well as the fastest growing. In addition to the large cloud providers nearly 20% of the Fortune 1000 are CyrusOne customers. What has differentiated us in the market over the past couple of years and fueled our explosive growth, is our industry-leading ability to build at a low cost per megawatt, and our ability to build faster than anyone else in the market today. These same processes allow us to do the same on-time, on-budget build for federal agencies as well.
What does the future look like? What are your predictions?
Dyer: The federal government's IT infrastructure future is likely to be very similar to what CyrusOne is experiencing with our cloud and large enterprise customers. Our vision of the future is the federal government starting to take down significant footprints across the various civilian, defense, and intelligence agencies. This is a proven model in other sectors and the success that the government will have with this approach will further accelerate the velocity of modernization, data center consolidation, and cloud adoption. The federal government's mission is not building, operating or managing their IT infrastructure. The federal government is beginning to leverage commercial best practices, whether colocation, private cloud, public cloud, or some hybrid blend of these services, depending on the applications and the requirements.
We'll see the IT integrator community continue to mature and expand to meet the growing needs of the federal government today. It is safe to say that there will be a continuing increase in opportunities for service providers supporting the federal government as well as state and local governments, which will mimic the approach as it succeeds at the federal level. There will be requirements for massive data centers for cloud hosting along with build-to-suit opportunities. Large consolidated data center footprints will be required in the coming years. There is a Cloud First policy being adopted and every federal agency is trying to find a way to get to the efficiencies and financial benefits of the cloud. All cloud roads lead to a data center, and as the demand for cloud computing continues to evolve, companies such as CyrusOne that support that cloud growth stand to directly benefit from these trends.