Data center developer CyrusOne has embarked on a bold leadership change, naming a new CEO who has no direct experience in the data center industry. CyrusOne announced Monday that it has named veteran real estate executive Bruce Duncan as its new President and Chief Executive Officer.
Duncan will take the helm next Monday, succeeding interim President and CEO Tesh Durvasula, who has been leading CyrusOne since the abrupt resignation of Gary Wojtaszek in February. At the time, the company said Durvasula would be considered for the permanent position. Instead, Durvasula will leave the company after working with Duncan to ensure a smooth transition.
In hiring Duncan, CyrusOne appears to be signaling the importance of the supply chain in its vision for the future of the wholesale data center market. Supply chain management has played a key role in CyrusOne’s leasing success in recent years, helping it deliver large-footprint data center space in six months or less.
The leadership decision is also likely to be watched for signs about the company’s stance on persistent media reports that CyrusOne has received takeover offers. Wojtaszek said last year that the company was not for sale, but since his departure the company has declined comment on sale speculation.
Logistics and Supply Chain Come to the Fore
Duncan has led several public real estate investment trusts (REITs), most recently as chairman of First Industrial Realty Trust, which specializes in distribution centers and logistics real estate. That experience will be relevant, as the COVID-19 pandemic is testing the resilience of the data center supply chain, placing a premium on managing lead times for provisioning large equipment like generators and UPS units. See our recent Executive Roundtable for more insights on current supply chain stresses.
Duncan has more than 40 years of diverse real estate management, development, and global investment experience across numerous property types. He has held leadership and board positions with companies in residential and office real estate and hospitality, and currently serves on the boards of Marriott International and Boston Properties.
“Bruce is a proven real estate executive with decades of experience as a REIT CEO and public company director,” said Alex Shumate, Chairman of the Board for CyrusOne. “We are confident that Bruce is the right person to lead the company in our strategic execution, continued growth, and international expansion.”
“We are confident that Bruce is the right person to lead the company in our strategic execution, continued growth, and international expansion.”
CyrusOne Chairman Alex Shumate
While many real estate skills are transferable across asset classes, leading companies in the data center sector have a long history of hiring from within the industry. Data centers sit at the intersection of real estate and technology, which has helped data center REITs outpace other asset classes during tech-fueled stock market rallies.
The dual nature of data centers places a premium on getting the technology piece right and understanding the requirements of hyperscale tenants, who have been the largest customers for CyrusOne and other leading data center REITs. Earlier this year CyrusOne reduced its workforce by 12 percent, citing slower demand from the hyperscale sector.
As new players have entered the data center industry in recent years, large global real estate investors like Macquarie (Aligned, Netrality), Brookfield (Evoque), Colony Capital (DataBank, Vantage), IPI Partners (STACK Infrastructure) and Stonepeak (Cologix) have turned to industry veterans to guide their data center initiatives.
Depth on the Executive Bench
In charting a different path, CyrusOne is giving a clear vote of confidence to the capabilities of its broader team and its ability to execute.
“CyrusOne is an industry leader because of an extraordinary team of professionals who are passionate about developing innovative solutions to support the significant demand for data center infrastructure,” said Duncan. “I am excited to join CyrusOne, one of the top performing REITs since its inception, to help lead the company’s global expansion and deepen our partnerships with an incredible roster of customers.”
Durvasula will end a tenure of more than seven years with CyrusOne, serving as Chief Commercial Officer and his most recent role as President of Europe. Prior to joining CyrusOne in 2012, Durvasula served in CMO positions for QTS Data Centers and Telx.
“On behalf of the entire board, I would like to thank and recognize Tesh for his contributions over the last eight years, including his recent leadership as interim President & Chief Executive Officer,” said Shumate. “We were fortunate to have an executive of Tesh’s caliber step up, particularly during these challenging times. We wish Tesh the best of luck in his future endeavors.”
“It has been my privilege to lead CyrusOne, and I am proud of our accomplishments, especially in the way our team rallied together during these last few eventful months,” said Durvasula. “CyrusOne has a tremendous track record, and I have no doubt that the Company will continue to succeed and reach new heights in the years ahead.”