Eric Schwartz took the helm of CyrusOne in October, following a spate of high turnover in the colo firm’s C-suite. Schwartz sat down with DCN on Nov. 17 to share his perspective on the firm’s expansion into Spain, how his experience at Equinix prepared him for his current role as CEO, self-powered data centers, the supply chain issue, and the future of CyrusOne. He also addressed the leadership turnover at the company and his plan for longevity.
Eric Schwartz, CEO, CyrusOne
DCN: How did you come to CyrusOne?
Eric Schwartz: I was recruited to come here for the CyrusOne CEO role to bring both my experience and leadership. I think the company has been on a strong trajectory for the last several years and it is very much focused on the market of hyperscalers and others that are similar in size.
DCK: What’s in the future for CyrusOne?
Schwartz: From a strategy standpoint, I think the focus on markets and customers and the types of requirements that we address is going to stay consistent. The most important change isn’t about direction but it’s how we can continue to grow faster. The opportunity is substantial.
CyrusOne is very fortunate in that we have a very strong relationship with customers. They come to us not only interested in what we already are developing and the capacity that we have but also with requests and ideas about other areas. We can then work with them on their needs and that just builds a bigger pipeline of opportunity for the company. My focus is for us to be as successful as we can be executing against those opportunities.
DCK: Please tell us about your previous role at Equinix and how that will affect your tenure at CyrusOne.
Schwartz: For 11 years I served as president of Equinix EMEA and that was a period of very successful growth, both organic and inorganic, for the company. Then in 2019 I stepped out of that role and came back to the US and took on the role of chief strategy and development officer. This covered a number of things including the [Equinix] xScale program (Equinix hyperscale data centers). I’d say both elements of my career at Equinix were important in the recruiting process to become CEO of CyrusOne.
The majority of our business [CyrusOne] is in the US. We are growing at a good rate. In fact, the portion of our business in Europe, as a percentage of the whole, is growing. My experience in Europe, with the cultures, the markets, and the customers of the region, is going to serve us well as we continue to expand.
DCK: What’s an example of that expansion?
Schwartz: We’re under construction now in Spain, which is a new market for us. Spain is a nice addition to our historic presence in Frankfurt, London, Amsterdam, Paris, and Dublin. Throughout my time at Equinix I worked in Spain. I’m familiar with the market and with the site where CyrusOne is building the data center there. All that experience is an asset but then also just the experience of having been in the data center industry over the last 16 years is also important.
The experience of having led a team [at Equinix] through growth, understanding the investments that you need to make (not only in the actual capacity but in process capability), is directly applicable here at CyrusOne. The ambition for CyrusOne is certainly to continue our growth journey. I’m excited about the opportunities and I can also see the investments we need to make to ensure we’re scalable to fulfill all the commitments that we’re making to our customers.
DCK: How is CyrusOne facing supply chain issues roiling the data center industry?
Schwartz: Let’s separate the server or the technology supply chain from the data center equipment and power supply chain. Our offering to customers is very much about building the data center infrastructure in which they deploy their servers, storage, networking gear, and other technology. We’re attuned to the semiconductor supply chain because there are semiconductors in all of our equipment as well. We’re not managing supply chain for servers and the like. Our customers, who are the biggest technology companies in the world, are deep into that issue. They’re experiencing disruption between the stabilization of the world economy and the lessening of the impact of the COVID pandemic. They’re positioning themselves to manage supply chain issues in a better way over time.
It’s becoming certainly manageable and it’s becoming less of a challenge than it has been for us as in terms of our ability to deliver on our commitments to customers. We’ve been wrestling with the challenges of securing the equipment for all of this infrastructure that we’re committed to delivering. We’ve been dealing with that for years now and I’d say similar to the server and storage space the supply chain is not normal but it’s returning towards normal. We’re experiencing better performance and better deliveries.
This predates me so I’m congratulating the team who’s here: They were very aggressive early on in managing the supply chain. They did this by making and scheduling commitments and deliveries to better position the company to deliver capacity last year, this year, and on into the future. I think Cyrus one in general was probably better off than many others. Our company enjoys strong relationships with our customers not only because of our capabilities and our ability to deliver but also because of our transparency. We work with customers when we encounter issues and we’ve worked with customers through a number of those challenges driven by supply chain issues. We’ve earned a lot of trust along the way by being transparent and collaborative versus the alternative. We’re fortunate to have the financial position to make commitments in advance in line with our obligations to customers. That positions us far better to deliver than maybe some other companies who don’t have that set of resources.
DCK: Please address the high turnover in CyrusOne’s C-suite.
Schwartz: I’d offer a couple things here. First, I wasn’t here [during that time period of turnover]. It’s difficult for me to say what transpired and what led to those stages of turnover. The second thing I would say is I’ve been here at CyrusOne less than two months, and my observation is despite the disruption and turnover, the company has continued to execute well and deliver for customers. We’ve experienced steady revenue growth and investment in spite of that turnover.
I thought long and hard about the opportunity here at CyrusOne before I accepted and committed to the role. That was about understanding the opportunity, learning as much as I could about the team, and the various elements of this job. In taking this role, it’s a personal commitment on my part to not only invest in myself but to bring stability to this role. I’m sitting in the CEO office going forward in the recognition that there’s such a substantial business opportunity in front of the company. We need to ensure that we’re aligned around that opportunity and have the stability to execute. It’s my firm ambition that when we’re talking a year from now or two years from now the question you asked would be moot because of the stability that I intend to bring [to the role of CEO of CyrusOne].
DCK: What are your thoughts on self-powered data centers?
Schwartz: I’m pretty confident that all of the CyrusOne sites are on the grid today and none are self-powered other than the backup capacity that we have with generators. It is something that that we’re definitely exploring. I think there’s a discussion that I’ve seen here in CyrusOne about removing data centers from the grid and identifying ways to supplement the general capacity of the grid to meet the data center requirements.
There is potential in the demand response notions that when the grid is in stress data centers can remove themselves from the grid and or even become a net supplier of power to the grid. I expect that the evolution of the grid is going to bring more intelligence to how the grid gets managed versus historically where the grid was effectively a one-way highway of power going from generation to consumers.
