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Philbert Shih on Cyxtera and the colocation market

  • November 7, 2018

Source: Miami Herald

In many ways, Cyxtera is a next-generation Terremark. By the time of its 2011 sale, Terremark hosted more than a dozen data centers —large, bunker-type facilities that house thousands of computer servers—in addition to the Network Access Point of the Americas, through which all Internet traffic in the region is routed.

In creating Cyxtera, Medina’s team bought 57 data centers from telecom firm CenturyLink, which was looking to shift its business emphasis. Cyxtera also bought five different cybersecurity and data-management companies, most previously parts of Medina’s Medina Capital investment firm portfolio. The total tab: nearly $3 billion. Ownership is held by Medina Capital and private equity group BC Partners, which owns the majority.

The combination of so much physical infrastructure and cybersecurity software is unique in the marketplace, says Medina.

“You have data center companies — all physical data centers — and you have [cyber]security companies,” he said. “We fundamentally started with…[cyber]security carved into the physical data center.”

Cyxtera is banking on what Medina calls a software-defined perimeter. It’s software that allows a company to control all of its data, regardless of the third-party software they’re using (like Gmail), or the device used for access. Cyxtera reduces the available “surface” a potential attacker can even see. (Think of it like a “Star Wars” cloaking device. ) And what hackers can’t see, they can’t attack.

“The basic concept is, users of a resource or an app should only be given access to what they’re entitled to without seeing anything else,” he said. “Everything else is obfuscated.”

Philbert Shih, head of Structure Research, a data center services analyst group, said that while Cyxtera is still relatively new, the acquisitions it has made give it a solid revenue base and a global data-center footprint.

What makes Cyxtera unique, he said, is the combination of infrastructure — known as co-location — and security. “They offer co-location services, but with a meaningful security wrapper around the surface…“It’s a good way to differentiate.”

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