Conversation with Terremark Co-Founder and Current Cyxtera Chairman Manny Medina
Insight by Colby Synesael
In this episode, Manny Medina, Chairman of Cyxtera speaks with Colby Synesael, Communications Infrastructure and Telecom Services Analyst. They discuss the founding of Terremark and the opportunity for Cyxtera to fill the void in the publicly traded data center market. Press play to listen to the podcast.
Transcript
Speaker 1:
Welcome to Cowen insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Colby Synesael:
My name is Colby Synesael. And today we’re speaking with Manny Medina, the former founder of Terremark and current chairman of Cyxtera, as part of our leaders, legends, luminaries, and visionaries podcast series. With that Manny, thank you for joining me today.
Manny Medina:
Hey, thank you Colby. It’s a great honor for me to be here. I mean, I’ve known you for many years. So it’s great for us to be sharing a little bit of our history together.
Colby Synesael:
Yeah, I love these because even though I’ve known you for as long as we have, I’ve never really heard the Terremark story. So I’m really kind of excited to get into that. But before we do, just a few other questions. So after successfully selling your former company Terremark to Verizon in 2011, rather than retire, you form Medina capital and you remain active in the data center space today as chairman of Cyxtera. Among some of the other ventures you’re working on. My first question is, what do you attribute your strong work ethic to?
Manny Medina:
Oh, So listen, Colby. I was very fortunate that my parents: my mother and my father had the fortitude to put me and my sister on a boat when we were 13 years old and brought us here to the United States. Thank God, because if not we would not be doing this podcast right now. My life would’ve been totally different. And what I saw them do when we arrived here was really work their behinds of.
I mean, basically my mother had two jobs. As a hotel made Pete shrimps. To today, she still does issue because she said she still smells the shrimp. My dad drove a cab for 16 hours a day and I saw them and that kind of work ethic got us through these early years. And that’s how my work ethic started.
It’s really a hundred percent attributed to them. And one of the things that was really important is that we were very poor at that time. In a way that is kind of difficult to imagine today. And my goal was I didn’t want to be poor. So basically, I began working as soon as I arrived and I attribute to that.
Colby Synesael:
It’s funny that I also don’t come from wealth and as a result I also perceive myself as having a very strong work ethic. But it’s interesting how people who didn’t come from wealth, because of that have this really strong work ethic. I always get concerned quite honestly because I’m in a better situation today than I was when I was a kid. That my kids today aren’t going to have that same strong work ethic because they don’t have the same struggle if you will. Do you get concerned about that? How did your kids turn out?
Manny Medina:
There’s no question. There is a concern. I mean, I’m blessed because I have two kids and they both have. In different way, my son is a musician. He lives in Nashville, but he has worked harder than anybody to try to make it. And he’s actually made it. My daughter works with me and she works harder than me. So I honestly believe that a lot of it has to do with you.
And the example that you set, I think that a lot of parents get so blinded by the trappings and they want to live vicariously through their kids. And instead of showing the kids that work ethic from the very beginning and show them and infect them with it in a good way. I think that they just kind of get trapped. So I think a lot of it has to do with you.
Colby Synesael:
You’re now either 69 or 70, I don’t actually know exactly how old you are, but I know you’re somewhere in that area. And you’re still going at it. You’re doing a podcast with us right now. Where’s the energy come from? How do you kind of go about finding the energy to do this day in and day out still after all these years?
Manny Medina:
Yeah. Look I love. I’ve always had this incredible amount of energy, and if I’m doing something that I like. Like for example, I wouldn’t be doing this podcast with you. I mean, I’m blessed enough at this stage of my career that I do what I want to do. So I wouldn’t be doing this podcast with you if I didn’t appreciate you, if I didn’t appreciate our relationship, if I didn’t know that and it’s fun. I mean, for me to be able to have a conversation, get to know you a little bit better along the way.
So that energy comes from within. It’s an energy that I deploy in whatever I’m doing in a very passionate way. I’m a passionate individual. I think you need to be passionate in life. Whatever you’re doing, you need to be passionate. And I’m something that I recommend to people be passionate about whatever you’re doing. And I’m blessed that my passion is something that I deploy in ways that I like doing. So it really is something that it comes naturally.
Colby Synesael:
You’re right. You’re in a position where you get to have a little bit more choice in terms of what you do. And certainly being chairman is very different than being CEO of company. So that also kind of frees you up to be a bit more strategic and kind of choose where you insert yourself in certain things.
Manny Medina:
Of course, which is also what I really love. I mean, I’ve operated. You’ve known me as an operator but my real passion is not really operating. I’m very blessed that I have a great team. I mean, Nelson Fonseca, the CEO of Cyxtera has been with me for over 20 years.
The CEO of AppGate, Barry Field has been with me for well over 16 years. So I have a great team. But what I really love is kind of looking at the forest and looking at the big picture and strategically where do we move? And how do we get there? And stuff like that. And I really enjoy that. That for me is not work.
Colby Synesael:
So you mentioned this a little bit, but you were born in Cuba and you immigrated with your family to Miami in 1965 when I think you were 13 years old. And later you attend and graduate from Florida Atlantic University in 1974. What did you major in and what was the plan coming out of college?
Manny Medina:
So, look it’s funny because I’m not a CPA by devotion. My goal was very early on to get out to the business world. I began devouring kind of a high finance novels, and I just wanted to get out into the business world. I didn’t know exactly how, but I just wanted to get out there. I really am more of a people kind of marketing, but what happened was, I didn’t want to graduate from college and be selling Xerox machines or barrels computers at the time.
Because some of my friends had graduated before. So I actually said, well let me go to law school. I didn’t really want to be a lawyer either. And then the idea came to me. I said “you know if I graduated with a CPA, I’m going to have credibility” which is really what I need to have getting out an early stage.
So I did. I pivoted in my last year and a half in college. I decided, let me go out become a CPA. And of course I joined Pricewaterhouse, which was really the genesis of my business. And I’ve always said, Colby that the best two decisions I ever made in my life, was once to become a CPA and go to work for Pricewaterhouse.
And the other one was to quit. In that order because the CPA and the Pricewaterhouse taught me an excellence of work that has lasted the rest of my life. On the other hand, I was very anxious to get out into the business world and take advantage of all the opportunities existed.
Colby Synesael:
So a few things there. One is… By the way, Manny, I don’t think anyone becomes a CPA by devotion. I’m not sure that that person-
Manny Medina:
I don’t know, nothing wrong with it. On the contrary. It’s a great career.
Colby Synesael:
The second thing though that you say is that getting that great job early on and the lessons you learn, and the people you meet could serve as a springboard for so many people in terms of the next thing that they do. For me, it was working at Thomas Weisel. So at Thomas Weisel, when I was 22 years old, I got to cut my teeth if you will. I got to understand what it was to be in equity research.
I got to work with some fantastic people and really it was a combination of what I learned and the people that I met that created my next apathy, which by the way, you’ll appreciate this was with Vic Grover [crosstalk 00:08:27].
So Vic ended up coming over to Thomas Weisel [inaudible 00:08:31] the time. And then when he ended up going to what was Merriman Curhan Ford to go into banking. They recruited me to go in there and serve as the equity research analyst and the rest is history. But it’s interesting about those key jobs right out of school.
Manny Medina:
Yeah.
Colby Synesael:
Having such an impact
Manny Medina:
A hundred percent Colby I mean, the reason I joined Pricewaterhouse. Pricewaterhouse at the time it was the big eight. Basically they’ve been cut in half. I started Pricewaterhouse because I realized early on the importance of Latin America. So they recruited myself and a few others. Very small team and created something called Pricewaterhouse Latin American department.
And when you typically started with one of those big accounting firms. All you did was ground work. Pricewaterhouse did the reverse. They actually gave us business cards. They gave us credit cards and they basically said, go tell everybody how great Pricewaterhouse is.
Something else that they did is, which I was very anxious to travel. And I traveled all over Latin America with price. And so very early on the same way you were 22. When I was 21, 22, I was traveling to Santiago, Chile and doing all this exotic work. And that really was the foundation of my business later on.
Colby Synesael:
So in the mid to late seventies, you’re doing this. And then in 1980, you start a consulting business that you named Terremark that I believe evolved into a real estate development company. How did you go from Pricewaterhouse to a consulting business? And then that consulting business being focused on real estate development and kind of like what’s the bridge?
Manny Medina:
When I quit price, I actually started with a partner of mine. He used to work for Deloitte a firm. But the focus of the firm, where there was a lot of money, the same way that a lot of money is coming into Miami now. There’s been waves of this amount of money coming through the years. And in the late seventies, there was a very big wave of money. The Petro dollars, there were just all kinds of money.
And people investing in real estate. With the credibility at a very young age of having the CPA and Pricewaterhouse. We began a practice kind of advising investors coming into south Florida to invest in real estate. But our niche was, Hey, listen, we will never take a penny from the property.
We’re going to charge you a fee, but we’re going to be your eyes and ears. You live in Santiago, you live in Peru, you live in Bogota, but we’re going to be your eyes and ears here as a very credible extension of you as a CPA. That’s that was the Genesis of the business.
The business flourished. I had a lot of contacts by then. And of course the vast majority of it was buying real estate and taught us the real estate business. And that led into begin playing around with buying properties ourselves and continue and then led into development and led into bigger development. And really just totally a hundred percent focused on developing a lot of both mostly commercial but residential and was a developer all through that eighties and actually all the way through to the nineties. So that’s how the pivot was.
Colby Synesael:
It’s amazing is that in all these stories, in terms of people that start their own company the biggest thing is just taking the leap of faith. It’s leaving the paycheck behind that at this time you’re getting from Pricewaterhouse and saying I want to be my own boss. I have a business plan to which I could start from.
But it seems like in so many of these success situations that where you start with your business ends up becoming obviously so much more. But you had to have the guts to just go out there. And I guess my question to you then is, what’s the advice you would have for anyone who wants to start their own business today? Do you think that that’s the best way to being successful? Or just your thoughts on it.
Manny Medina:
Well, look, I mean, I have a duty. So I spend a lot of time talking to young kids today about to graduate, get their MBAs about this. Everybody at the end of the day and the one thing that they all ask is, “what’s the secret?” What’s the secret. And then how did you do it and how do you do it? Something that-
Colby Synesael:
I want to know the secret too Manny.
Manny Medina:
Yeah. So I got to tell you. I want to tell you the way I start my conversation with them. There is no secret. That’s the disappointment. There is no secret. And the way I say it is, look at the weight loss industry. There are billions of dollars spent every year in the weight loss industry. Is there a secret? No, eat less and exercise more. But basically it’s very difficult to do. What I’m saying is, so what I tell everybody, it’s very difficult for you to be tentative about it.
I’m not saying that you got to quit your job today, but you’re certainly at a point you got to make a strategic decision and say, I’m going to be all in. I just did this for a kid whom I’ve known since he’s 14. He’s now 28. He’s done a great job. And he was kind of theatering between… He actually had a huge job with Boston consulting, but on the side, he started a car website, which is now blossom and boomed.
And my decision was, you got to go all in. It’s very difficult for you to do these tentatives. Now, if you do that, you got to be able to have a very high risk tolerance because it is risky. You got to be able to know that and have the ability for you to be able to pivot. And that’s really one of the most difficult things, how long do you actually stay on a course?
And is there a point that you really become delusional or not? And there’s no real secret to it, but you have it inside of you. If you’re determined, if you’re passionate about it and you know and believing what you’re doing. Then you need to go for it because what’s the downside. You’re always going to be able to get a job.
The downside is not doing it. That really is what I tell them. That doesn’t mean that you need to start as a founder of a company. It could be that you’re doing that in a bigger organization, on a bigger job. And just kind of succeeding that way. There’s nothing wrong with that either. For me, that was never an option, basically. And I do recommend strongly. And I see it today. It’s crazy. This whole COVID thing, how the myriad of entrepreneurs that we’re dealing with today, particularly as the flood of come down here to Miami.
So I think you got to be passionate about it. You got to make that jump. You got to take the risk and you got to realize and say, Hey, if the worse happens, am I going to be living under a bridge? The answer is probably no, the answer is you’re going to be able to do something else.
Colby Synesael:
Yeah. You’ll figure it out. Have confidence in yourself. So the first 15 years you largely focus on office development. So call 1980 to the mid nineties. But sometime in the mid nineties, you pivot the business. Can you talk to us about that pivot and what drove it?
Manny Medina:
Yeah. Something else that you learned from is kind of very difficult times. So I’ve had two periods of very difficult times financially. After my career began going like this at the very late eighties, very early nineties. My financial world came crumbling down because of reasons have nothing to do with me development by its nature. You’re as good as your last deal. So basically, and the RTC, there was a lot of financial stuff.
And I ended up… I had a very great Lebanese partner who was in the middle east. Kuwait was going to be liberated. So I ended up going to the middle east. I was actually in Saudi Arabia going to be liberated. We wanted to go wait immediately after the liberation.
And so, while I was there in that period. It was a period that for me, personally, was a very transformational period. Not something that I would like to do again. But basically, I’ve always been interested in technology. And in the very early nineties, I began getting fascinated with the internet. Just began to getting fascinated.
While I was there during the period, just when the internet was just beginning to be commercially kind of feasible. And I began fascinated by it. By the time I came back, I wanted to play. I’ve always thought that if you stand in front of waves, you’re going to get wet no matter what happens.
Even today, I think about what is the next wave? I’ve always thought about that.
[inaudible 00:16:59]
what is this wave that is coming? And I just felt inside of me that the internet was going to be this thing that was transformational. So not knowing really a lot about technology at that time. I began by doing what I knew how to do best, which is basically build the infrastructure where the internet sits. And that was my first foray into the internet world in the late nineties.
Colby Synesael:
And was that in the middle east? That was the first?
Manny Medina:
No, the middle east just taught me more. There’s no tech support, so you need to become yourself more. So I spent a lot more time in the technology side of things. So that was just a foundation. It was here. When I started, it was here in the US. When I was back that I began then playing with building telecom hotels.
Colby Synesael:
So you’re already in real estate development. You’re learning about the internet on a personal level and you’re interested in it. And you kind of meld those two things together, where you take what you do know, which is development. And you take what you’re becoming passionate about, which is the internet. And you find the middle ground, which is at that time building these telecom carrier hotels.
And that’s how you kind of start to pivot the business. But one of the projects that you bid on was to construct what now is known as NAP the America. The Network Access Point of the Americas.
Can you tell us what made that project? So specialties, I mean, that’s, I think what most people think of when they think of the legacy Terremark.
Manny Medina:
Yeah. So look, and there’s no question that the NAP of the Americans was the most important thing that we did. Almost cost us our lives but it was definitely without a doubt. And the way we jumped all over this in the year ’98, ’99, which is when the NAP began being articulated.
People didn’t comprehend what we were talking about but we did. We kind of saw Latin America, there were tens of during the Google days of the late nineties, you remember the global crossings and you know, all this, there were billions and billions of dollars of fiber optic later over Latin America to light up Latin America. It was not lit up. And basically all that massive amount of infrastructure guaranteed that the search of utilization of infrastructure was going to be through their mood.
Actually the traffic was going to increase significantly. It didn’t take a genius to figure that out because all the billions of dollars and you were lighting up all this major capitals that up to the moment didn’t have any fiber optic. So it was very difficult at the time for you to exchange traffic. Meaning if you like, for example, we did a test one time, if you send an email in Panama from the eighth floor of an office building to the ninth floor of the same office building, it would take 17 hops to the Virginia of Chicago and then come back up to the ninth floor. It just didn’t work. So the industry came together, led by global crossing and said, we need a new exchange point. We basically saw the potential of the NAP the Americas.
The analogy that I used to use Colby was, Hey, if I had the opportunity to own Miami international airport in the early 1920s, would I have owned it? Yes. Right. So we saw it, everybody in the industry didn’t care because all they really wanted was a neutral exchange point. And in other words, they didn’t want a carrier to be the authority. All the other exchange points were control of the time by carriers.
So we saw this and I said to myself, if we able to win this. And then this is where the Terremark model really started. And then at the time Equinix was already going. But I began to say, if we exchange traffic here, it really makes a lot of sense for you to put your infrastructure here. And then if you put your infrastructure here, we basically should provide you a lot of other services.
So the model started because of the NAP the America. So we fought very hard to win it. And we did. We won. What happened, all these companies had signed an M-O-U saying that they would bring their networks and terminate their networks into the new exchange point. The new Network Access Point of the Americas. And we thought that that would be incredibly valuable in the future.
Colby Synesael:
So you end up winning the contract to bid the NAP the Americas. And I believe that you won that partly in partnership with Telcordia. But the timing is interesting. As you’re finishing this project in 2001, the world starts to kind of crash around you. The internet bubble burst. You made reference to this already but how did you survive?
Manny Medina:
Yeah. So no question about. Colby, this is one of the most difficult things that I’ve ever done. So my CFO at the time, Jose A. Segrera and myself, we were a hundred percent convinced that NAP the Americas was going to be incredibly valuable eventually. We just needed to survive this period. And the period, like you said, the bubble burst, the telecommunications’ industry were all filing bankruptcy and then September 11th on top of it.
And we were a public company. There was no funding anywhere. I mean, wall street was out to lunch. And so we basically, one of the first things that I did is, when I speak to kids today, I tell them, we were talking a little bit earlier about going all in and so what I made a decision is, listen, I cannot do both. I still have some real estate holdings.
So I liquidated everything that I had at the time. And I went all in. Literally went all in and kind of in Terremark. I also begged borrowed, pleaded. I had made a lot of money for people before. So I went back to all of them just to get rid of me. They would help me do something. And for us, look, we had many people trying to come in and save us, but it was diluting ourselves to the point that it wasn’t worth it.
So we were not going to do that. So it was just basically struggling to trying to live week by week. And everybody here on top of that, we were fighting just this huge, incredible battle with BellSouth. And anyway, so it was a matter of whether… When not if luckily we survived. I mean, one of the funniest stories that we have is going to wall street, I mean, Jose and I would get off at LaGuardia flying economy.
And then at the time it wasn’t like today where we had this technology. We’re carrying around 40 pound laptop and a 40 pound projector. And basically, and we would go, and we would literally pitch the cab driver from LaGuardia to anybody that would listen to us. So it was just a very big struggle, but we just needed to make it and make it because we believed of the value of the NAP.
So we wouldn’t give up. There are many angles of this story that funny and another time I’m happy to share a lot of them, but it just take too much time. But that’s basically what we did. We just wouldn’t take no for an answer. And we were determined until we finally were able to take the model.
Colby Synesael:
It’s wild. I mean, a few things there. Number one, is that you did. You went all in. You had other real estate holdings from what I’ll call legacy Terremark which you liquidate and use that to fund the new business model. Which is really based at that time around the NAP the Americas.
And secondly, I didn’t appreciate you were actually public already, which creates a whole other set of scrutiny that you’re doing this in the public view which actually makes it much more difficult when you’re going through situations like that. So that-
Manny Medina:
It was much more difficult, but on the other hand it helped us. Because it was very difficult no question that aspect of it. Because there was certain amount… There are certain people that did believe, and we were able to bring in equity in a public way that we couldn’t have brought in if we were a private company. And I think finally funding ourselves private could perhaps would’ve been even more difficult.
Colby Synesael:
Oh, interesting. Okay. So one of the more unique aspects of the Miami facility is the federal government business. And you mentioned September 11th. But did the federal business come kind of already, that was going to be part of the model when this project was being put together in RFP by global crossing or did that come after? And maybe September 11th played a part in that?
Manny Medina:
Yeah, so absolutely the latter. We had no federal businesses in our business plan at all. We didn’t even contemplate it. What happened was that as sad as those towers being hit on September 11th. If those planes would’ve hit just up the street at 60 Hudson, which is the main exchange point. It would’ve been chaos for the way that they go and communicate. Remember it was very early on. So what happened was, the government went out and said, at that point, we already had a very big critical mass of carriers.
We already had all kinds of. So the government went out to places like us and said, you know what? We need to distribute our infrastructure because we, the US federal government can never put ourselves in a position where our infrastructure is so vulnerable that if somebody blows up one of these exchange points our infrastructure may be secure in a mountain somewhere in Utah, but the traffic is being exchanged in a very vulnerable place. So they basically did that distribution.
We, at that point, obviously that was actually one of the things that helped us the most. Because basically at that point, them coming in, it was very credible for us to have the federal government as a customer. And that helped us with enterprises. And that was a big part of it. So September 11th, as sad as it was actually was very helpful to us as a company.
Colby Synesael:
Oh, interesting. So the business starts to take on a lot of success, and then you make a 10 year run from 2001 until 2011. But then in 2011, you guys elect to sell Terremark to Verizon. And at that time you’re operating 13 data centers. Including some other notable ones such as the fortress in Culpeper. Why sell and conversely, why do you think that Verizon bought it?
Manny Medina:
Yeah. So look, we saw we were a public company. We were doing very well at the time, and it was something that we considered long and hard. I think the more we kept saying no, the higher the price got. And we were not looking to sell the company, but basically there comes a point you have a lot of investors. I, myself and a lot of the team members have been working very hard. And when the price got to a point, it would’ve been irresponsible of us to say no at the time. So we sold for a very good price. Why did Verizon buy it? I think there were three broad points.
First of all, is they loved our cloud. And we were at the point. We had a very robust enterprise cloud that we had launched in 2008. And it was very successful at the time. They liked our infrastructure. I actually flew with the Verizon CEO and their whole team and went to Culpeper, obviously NAP the Americas. We were building in Amsterdam. So they liked our infrastructure. So that’s number two.
And number three, they loved their cyber practice. Our cyber practice was very advanced. Something that we had been doing since the early 2000. I mean, we went into cyber when cyber wasn’t even called cyber. It was InfoSec. So basically, and we went in there and by the time that we had one of the most advanced cyber practices of anybody. Forget about the data center industry, just basically in the industry. So I think those three factors was the thing that actually got them to really wanting to buy us.
Colby Synesael:
Yeah at some point you have a fiduciary duty to sell a company of the price is so high, even whether you want to or not. Regardless of where you may see the company in five or 10 years from now. And then the second thing from Verizon is, it is interesting how these telcos, and it wasn’t just Verizon. It was AT&T and CenturyLink, and even others who just had this very broad strategy for how they were going to participate in cloud. And really by the way, in 2011, shortly, before AWS gets off the ground in any meaningful way.
Manny Medina:
No, if you take a look at the magic partner at the time, AWS and Terremark were right at the same.
Colby Synesael:
Yeah.
Manny Medina:
All the enterprise cloud.
Colby Synesael:
That’s wild. So five years after you sell Terremark, you partner with BC partners, which is a private equity firm out of I believe UK. And long view to buy CenturyLink status center business, which I believe largely at that time consisted of the service portfolio that CenturyLink had bought right around the same time that you sold Terremark to Verizon. I guess the first question is why get back in?
Manny Medina:
Yeah. So look, we believe Cyxtera is a phenomenal opportunity at the time. Now it wasn’t even called Cyxtera because they had no name. But we knew these cyber assets well. I knew [inaudible 00:29:54] and I competed against them and the assets were extremely well maintained assets. And they were great assets.
So first of all, that was one thing. Two is if you had a portfolio of data centers around the world that would be very difficult to replicate and it would take a long time. You had an opportunity. You had a demoralized sales force because basically it’s an inherent conflict probably with these big carriers. Is their number one priorities to sell their network.
And the Kolo aspect of the business becomes totally not important. So the Kolo sales force was really demoralized. They were more like order takers. And so you had to demoralized, you had good assets and we strongly a hundred percent believe this is a big early inning still for the data center industry. We believe that what’s happening in this digitization of the world is just early inning.
And basically, so we felt that if we took this company, used their experience, shake it up, restructure it, set it up, that it will be a great opportunity as it’s turning out to be. I mean, basically, and for me personally it was a big deal. And it was a deal that had a lot of potential upside.
And it wasn’t really just the money. Just that I like doing big deals. And I liked creating all this stuff. So the team got together and I said this is a great opportunity. We were doing really well in the sense of investing on our partly owned capital. We had raised a fund. But it was just an opportunity to just go to a whole different level.
Colby Synesael:
Yeah, you did. I mean, this was even much bigger transaction than what the size of Terremark was at the time. I think that this had over 50 somewhat data centers. And I guess, the question here though is, do you see the same opportunity for Cyxtera that you did for Terremark?
In other words, if Terremark had stayed an independent company, they’d have a business plan similar to what that is for Cyxtera? Or is there a different angle if you will to this?
Manny Medina:
Look I think that the industry has matured from the Terremark days. I think one of the things that is more important is that Cyxtera is more of a pure data center play. Now, we are always very innovative in data centers. Like for example, our bare metal. All our digital exchange. All of this are great differentiators but I believe that Cyxtera is a lot more pure in the sense of everything related to the data center.
We don’t have the cyber business. We don’t have the managed services business. We don’t have the hosting. And I believe that’s where the industry is going. And as you digitize the rest of the infrastructure of the world. I think the need for that will continue to grow exponentially. And this is why all our peers are doing what they’re doing. So I believe Cyxteras opportunity is bigger but in a different way.
Colby Synesael:
Yeah. It’s interesting. Is that in Terremark you mentioned in 2008, you started broadening the products that getting into more what we’ll call generically managed services. And there’d always been some type of security component to what you guys were doing. And even with Cyxtera there’s a bare metal component.
And to your point, you look at Equinix with what they refer to as digital infrastructure services. Which today is predominantly their bare metal solution. You were ahead of the curve back in 2008 and 2009 and 2010. And to some degree, what you’re seeing with Cyxtera is an extension of that similar strategy to which you started in those later years of Terremark.
Manny Medina:
Yeah. It’s a hundred percent. And listen, we started this funny when Equinix, which is a great company by the way, bought their bare metal. They basically [inaudible 00:33:29] 80 million, this is something we created organically. The moment that Cyxtera hadn’t even closed yet. We were already working on all this. On an exchange point et cetera, because what we do is we want to be the ones that really facilitate all these large government agencies and enterprises to buy the infrastructure. In a way that is seamless.
I believe that you’re seeing it already frost and Sullivan in a recent report, put that 48% of their customers had already said that they’re migrating apps away from the cloud into infrastructure. The cloud right now, particularly as you look at AI and some of these other apps, it doesn’t work well. It’s not designed for that. I’m not suggesting the cloud is not going to continue to grow, but I do believe that the infrastructure that we’re providing with the bare metal and the co-location and the ease of you being able to point and click and consume that, with the same ease and you spinning off Vms. I think that’ll make it a very compelling strategy for us. It’s happened right now for Cyxtera and for our customer base.
Colby Synesael:
Well, it’ll be exciting to see how Cyxtera progresses going forward, but as we’re coming to the conclusion here of our podcast. I need some advice from you. So we’re going to start to wind it down a little bit. But Manny, as a sale side analyst, I just lost core site. I lost Cyrus one. I lost QTS earlier this year. You’ve been a man who’s reinvented himself a few different times throughout your career. What’s your advice for a sale side analyst who just lost some of his key names? What do I do?
Manny Medina:
Well, listen, to begin with, it’s time you launch coverage on us. I mean you have all this time in your hand. What are you doing? So basically now, but oh, kidding aside, Colby look, I talk about this with young folks all the time and I will tell you. I think there’s two broad areas here. If I am fascinated by blockchain. I’m fascinated by the opportunity of blockchain. I believe everybody today is a hype cycle.
You remember the hype cycle of the internet, the same way that I did. But I believe there’s just so many opportunities of just early innings. You talk about waves. I mean, every wave that… This is a major wave that you cannot stop. Basically, if you think about what’s happening, not just, I mean, forget about Bitcoin and whether it’s going to be worth 20,000 or 200,000, I don’t know.
But the blockchain technology itself is revolutionary. And I think it’s going to change every aspect of our life. No different than the internet do. So I would be consuming. If I were you consuming and learning and if you were to leave, if you were going to leave your sales side, getting to a early startup, that actually gets into this incredible future that has so many potential.
The other one is cyber. I believe cyber is the problem of the next 50 years. And I believe cyber is the last part of the infrastructure stack. This is why we are also so excited about [inaudible 00:36:39]. The last part of the infrastructure stack that hadn’t really yet changed.
And it’s today early innings in cyber. I mean, if you see the Z-skaters and the crowd sites of this world, and you see this massive valuations people say is it over? I don’t know if it’s worth X or Y, but I will tell you is that this whole transformation of cyber is something that is really just in early eighties as well.
And so those are two huge opportunities that if you wanted to play. And if I were to suggest to somebody who has technology background. Who understands the industry, where would I go if I were myself? This is where I would go. And one of those two areas.
Colby Synesael:
On the blockchain, it’s interesting at our communications infrastructure summit, which we host every August in Boulder. I remember Dan Caruso, I think it was three years ago, got up on stage and talked about blockchain and how important it was. And it’s interesting, even three years ago that somebody like that was talking about it.
And here we are and it’s still very new. But so far all I’ve done Manny is I’ve opened up a Coinbase account. That’s as far as I’ve gotten.
Manny Medina:
Listen, Hey, what I suggest is you open a Coinbase. You open a OK-coin, open blockchain.com, open an account. You can do it with a few hundred dollars each. I would buy a couple of NFTs and just small. Just we can buy several of the coins, recommend our grand and just become part of this world and go to some of the-
Colby Synesael:
Put yourself in front of the wave.
Manny Medina:
I’m telling you that is it. You’re going to get [crosstalk 00:38:20]. You think about it. Look in your history. Start with internet, then virtualization. We stood in front of that virtualization. Then the cloud. Then mobility. So you start. This is just the beginning of the wave. There’s two big waves that is much bigger. And the other way is side. I believe cyber Is just a big one.
Colby Synesael:
We’ve now approached the lightning round. So I’m going to ask you to keep each answer to less than 30 seconds. And I’m not going to follow up with any follow up questions or wise guy remarks. But my first question, do you think you’ll ever want to retire?
Manny Medina:
No I will never want to retire. I took a break when I sold Terremark and the first thing I went off the grid. The first thing I really realized is that retirement is way overrated. And I don’t consider what I’m doing working right now. Basically. So no, I’m never going to retire.
Colby Synesael:
And then question number two, what’s your favorite sources for news on the data center sector today? Where do you go for your information?
Manny Medina:
So I have a good marketing department but data center knowledge, Rich Miller’s new publication. I think is data center frontiers. I mean, 451 I get a lot of information from you guys from the analysts until reading up on all that. So basically all of that keeps me pretty up to date.
Colby Synesael:
Okay. And my last question, what’s a better company. Terremark or Cyxtera?
Manny Medina:
I think they’re both great companies in a different way. I think Cyxtera is going to be. Right now we are the third largest publicly traded data center company in the world. I do believe that the sky is the limit in a very pure play as I just finished describing. So in a different way, they’re both great companies.
Colby Synesael:
Great answer. With that we’ll conclude. Manny, thank you so much for your time. Always a pleasure.
speaker 1:
Thanks for joining us. Stay tuned for the next episode of Cowen insights.
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