Leading with security is nothing new to Manuel Medina and his team at Cyxtera, the newest player in the data center sector. At Terremark, Medina and his team leveraged their security expertise to become a leading providers of data centers for the U.S. military and federal agencies.
For his second act, Medina has teamed with BC Partners to create Cyxtera, offering next-generation security services across a global data center platform. The security technology is provided by Medina Capital’s stable of startups, while the data center footprint was acquired from CenturyLink in a $2.8 billion deal backed by BC Partners, a European private equity firm. The acquisition closed May 2, with CenturyLink taking a minority stake in the new business, and continuing to offer colocation services in Cyxtera facilities.
The Cyxtera platform features 57 data centers in the U.S., Europe and Asia, spanning more than 2.6 million square feet of mission-critical space. The company has 3,500 customers and a global workforce of 1,100 employees, including security and analytics operations in Boston, Dallas, Silicon Valley, Bogotá, Gothenburg and London.
The leadership team includes many alumni of Terremark, which Medina founded and grew into a leading player in cloud computing before it was acquired by Verizon in 2011.
“I’m proud to be able to say that we’ve put together a truly world-class team,” said Medina, the CEO of Cyxtera. “It’s great to be back with some old friends and colleagues from Terremark – I feel like the Blues Brothers putting the band back together.”
Software Meets Infrastructure
The IT landscape has changed since 2011. But Medina and other Terremark alums were busy scouting for new ideas in security, building a portfolio around an approach known as Software Defined Perimeter (SDP).
“We were focused on cybersecurity companies in growth phase with the capabilities we thought would be useful to larger customers,” said Nelson Fonseca, the Chief Operating Officer of Cyxtera. “We really stuck to the security aspect until we found an infrastructure portfolio that fit our vision. We’ve always loved colo and data centers as a foundational piece of the puzzle. We thought this was the right kind of infrastructure.”
“We liked the diversity of the CenturyLink footprint, with heavy density in major markets and also a strong presence in regional markets,” said Simon West, Chief Marketing Officer at Cyxtera.
Cabinets and containment systems inside a a data hall in one of Cyxtera’s London data centers. (Photo: Cyxtera)
The majority of the data centers are in the U.S., but the portfolio also includes facilities in London, Frankfurt, Tokyo, Shanghai, Hong Kong and several markets in Australia. The CenturyLink portfolio was built through acquisitions, and includes leases in Digital Realty properties that were once part of Savvis, leases from partnerships with IO and Australian provider NextDC, former Qwest data centers and facilities developed by CenturyLink.
“We know a lot of these facilities from the Savvis days,” said Fonseca. “I think the facilities are very well run and very well maintained.”
Security for the New Economy
Cyxtera’s focus on security is rooted in its belief that current practices are not keeping pace with the threat environment, a thesis borne out in the steady drumbeat of headlines about security breaches at major corporations. It sought a new approach for a digital economy that is deeply connected and distributed across a growing universe of facilities and mobile devices.
“From the security perspective, the main theme is the idea of a software-defined perimeter,” said Fonseca. “Our view is that enterprise CIOs will want a common security perimeter no matter where the infrastructure lives. This allows companies to secure the apps, regardless of where they are running.”
Software-defined perimeter is an approach that originated at the Defense Information Systems Agency, and is now being championed by the Cloud Security Alliance and Google’s BeyondCorp initiative. One of the leading startups focused on SDP is CryptZone, which was acquired by Medina Capital and is now part of Cyxtera.
SDP provides security for laptops and PCs, but can also be used to authenticate mobile and IoT devices, correlating device identity with user identity to make policy enforcement decisions.
“IT security is still hardware-bound and based on the notion of a physical perimeter,” said West. “Our vision is to bring together a broad set of security services and be platform-agnostic. The vision is to offer this software control plane.”
Cyxtera is also integrating security offerings from three other startups from the Medina Capital stable:
- Brainspace is an “investigative analytics” platform that rapidly ingests millions of pages of unstructured text, and uses machine learning to dynamically learning without taxonomies or ontologies. Early applications include e-discovery – scanning documents and email relevant to investigations and court cases..
- Catbird focuses on software-defined security optimized for hybrid IT infrastructure, protecting private clouds and virtual data centers using either WMware or OpenStack.
- Easy Solutions offers electronic fraud detection and prevention solution that works across all devices, channels and clouds.
“These are some really exciting security capabilities that have been focused in small companies,” said West. “Giving these security technologies a greater stage is important. There’s a certain segment of the security offering that are emerging products. Education is a big part of that. The entire conversation is too important to be isolated to the IT department or compliance.”
Building on the CenturyLink Network
One issue in taking over a data center footprint operated by a telecom carrier is the connectivity. Interconnection is a key differentiator in the colocation market, but carriers are not always incentivized to create a network-rich environments.
Cages inside the colcoation area of a Cyxtera data center near Toronto, Ontario. (Photo: Cyxtera)
“I think being a carrier-run platform is difficult,” said Fonseca. “As a telco, you’re not oriented to bring in other carriers to compete against your products. I just don’t think it’s been a focus of (CenturyLink).”
But Cyxtera says it is pleased with the current state of connectivity, which features 100 network service providers across the footprint (an average of seven per data center) and includes direct connections to leading cloud service providers. Fonseca expects to develop well-connected carrier neutral environments.
“We were actually very surprised by the amount of carrier diversity we found in these data centers,” he said. “We’ve already talked with some of our (connectivity) partners, and they like this footprint. We just think it’s an execution issue. We feel it’s blocking and tackling.”
He noted that several of the new Cyxtera facilities have a history as hubs for high-frequency trading, a particularly latency-sensitive customer segment. That includes the former Savvis proximity trading centers at 300 Boulevard East in Weehawken. Fonseca noted that the financial sector is keenly focused on security.
Government Seen as a Key Vertical
The Cyxtera team also sees opportunity in the government sector, where Terremark used its security focus to build a leading position in the market for secure hosting for federal agencies and the military.
“We were early in the cybersecurity arena,” said Fonseca. “From a vertical perspective, the federal government will be important. We see that as a huge market for us, particularly with our knowledge of that market and our relationships.”[clickToTweet tweet=”Cyxtera COO Nelson Fonseca: The federal government will be important. We see that as a huge market for us.” quote=”Cyxtera COO Nelson Fonseca: The federal government will be important. We see that as a huge market for us.”]
The company believes its offerings will be of interest to the service provider market, and sees opportunities for its various customers and partners to build relationships.
The Road Ahead
Describing itself as ‘the secure infrastructure company,” Cyxtera says it’s a new kind of data center company that sits at the nexus of enterprise IT and the cloud.
“The last two decades have brought seismic changes to enterprise IT availability, agility and scalability, and the next era must be underpinned by a similar revolution in infrastructure security,” said Medina.
“As the complexity of the IT environment grows and threats to its security continue to multiply, it is more important than ever before that institutions – both in the public and private sectors – integrate security into their core infrastructure strategy,” said Justin Bateman, managing partner for BC Partners. “Cyxtera is the first company to provide that integrated solution to customers around the world.”
With 3,500 customers and 2.6 million square feet of data center space, Cyxtera arrives with critical mass. But it also believes that it is forging new ground.
“We want to get out there and tell our story,” said West. “We feel like a $3 billion startup.”
