Data center industry growth drives expansion, cloud use at CyrusOne

In 2018, data center industry growth is real. The global market for physical space to store servers is projected to swell to $54.8 billion in 2020, according to a report by BCC Research published earlier this year -- that's a 77% increase from $30.9 billion in 2016.

Part of the reason companies that build data centers are doing so well is cloud providers are doing well. And many of them are storing and processing and analyzing data in massive buildings owned by CyrusOne, which runs more than 40 data centers worldwide. (See the numbers on data center industry growth in the report.)

Another reason, said CIO Blake Hankins, is companies don't want to deal with powering, cooling and connecting servers. Leasing space in a CyrusOne facility "allows the CIO or the IT department to focus on what their core business is and not focus on data center infrastructure," Hankins said.

The Dallas-based company saw 32% year-on-year growth in the first fiscal quarter of 2018 and is expanding its global footprint, with new data center acquisitions in Europe and investments in China.

Data center industry growth is also a result of the ballooning mass of data generated by mobile devices and the internet of things. The more data there is, the more room that's needed to hold it, Hankins said. And, of course, "everybody is looking at getting all of the data we have and analyzing it."

In a recent interview, Hankins discussed what's driving his company's expansion, its internal use of cloud computing and how it is tackling multi-cloud complexity. Here are edited excerpts of that conversation.

You're in the data center business. How does cloud fit in?

Blake Hankins

Blake Hankins: We look at ourselves as a real estate investment company. Essentially, we build massive data centers and we lease space to customers so they can have their equipment in our data centers. We give our customers the ability to scale up, and we can use our scale and size to drive down prices. It allows the CIO or the IT department to focus on what their core business is and not focus on data center infrastructure. We're responsible for making sure our data centers have power, have cooling, have connectivity and are secure so our customers can focus on what they need to do best in terms of the data and the equipment that they have in our data centers.

In terms of the cloud, we have top cloud providers in our data centers. And we're in the business of connecting their customers into our data centers and into the public cloud with our internet exchange and connectivity products.

How much cloud computing do you employ in your own IT operations?

Hankins: We deploy a fair amount of cloud-based applications. Most of our back-office applications, so sales and marketing, financial, HR, email, are cloud-based applications. So, I don't have to worry about the infrastructure that they sit on. And the teams that work on those worry about business processes and data and getting more focused on what we actually need to do with those applications and how we can improve the business processes and the information associated with those -- how we process information to get the data and analytics out. We don't have to worry about the infrastructure of it: the backups, the servers, the upgrades -- all of that. The risk of doing that is outsourced to our cloud providers.

So, you have multi-cloud operations. How do you manage such complex cloud environments?

Hankins: The biggest thing that we face with multi-cloud -- the different systems and the different clouds -- is getting data between the clouds. For instance, our Salesforce data and our ticketing system are on two different clouds. We combat it in two different ways: using the APIs that the clouds offer -- getting data out of one and putting it into another with the APIs. We also use a data warehouse. We do batch processing and pull down the data from those clouds. We use it in a variety of different ways in our enterprise data warehouse, such as reporting and data analytics, especially if the information is coming from two different systems.

What's driving CyrusOne's global expansion?

Hankins: We build to provide faster, more efficient service and 100% uptime to all of our customers. And we customize our product that we offer to fit their needs. We can have the customer that just wants a couple of cabinets in a cage in our data center all the way up to a customer that wants to take a whole building. We have all those customers in between, and we really understand what their needs are and what they're looking at and help them be successful while we're successful as well.

The data center industry in general is growing as well. As a CIO, I look at risk and I want to outsource risk as much as possible to the people who do it best. We do data centers best, so [CIOs look at us and say,] 'They know how to do it. They do it on a massive scale. They offer 100% uptime' -- all of that where it's less risky if I give it to the outsource provider. So, people outsource data centers to us; I outsource other things to different people as well, so I can focus on what I really need to do to help drive the business.

Is the massive increase of data spurred by the internet of things contributing to the need for more data center space, and, hence, more data center industry growth?

Hankins: Absolutely. Everything is gathering data and sending it back to a server someplace, where that data is stored and analyzed. As little as five years ago, we didn't have all of the connected things that we have now. I've got the Nest thermostat. My toothbrush is connected to the internet. I've got a security system, [Amazon] Alexa and [Philips] Hue lightbulbs that are all connected. That's just me personally.

That data has grown significantly in the past few years, and it's contributed to the growth of data centers, because everybody is looking at getting all of the data we have and analyzing it. I think about pictures. When I was a kid, you'd have to take a roll of film to get it developed. My parents would say, 'It's got to be a good shot before you waste the dollars on developing the picture.' Now, it's on the phone -- we take pictures all the time, and all that data is stored in the cloud. So, the internet of things, the amount of data that everybody produces on a daily basis has combined and contributed to the growth of data centers.

For Blake Hankins' take on the changing role of the CIO, read part two of this two-part interview.