Ferdman lauds company performance, team at Deutsche Bank’s 2021 Technology Conference
September 13, 2021
CyrusOne interim President and CEO David Ferdman reaffirmed the company’s strong position, discussed its competitive advantages and differentiators, shed light on the search for a new CEO and more at Deutsche Bank’s 2021 Technology Conference on Sept 9.
Ferdman told Deutsche Bank analyst Matt Niknam his top priority in his temporary role is to ensure CyrusOne continues to execute at a high level.
“We’ve had a fantastic year, we just announced a really good second quarter and we’ve got strong momentum,” he said. “We’re going to continue to build campus-scale, hyperscale and enterprise-quality data centers in the high-growth digital gateway markets. The priorities of the company are to focus on both portfolio optimization, which is a big deal for us, and where we invest it. We invest in high-growth, high-demand global digital gateway markets to effectively build in critical mass, lower the execution risk, gain greater critical operating leverage and drive yield.”
He also wants to ensure the company’s competitive advantages remain. Among those are: cultivating a great track record, being a high-touch and deep-relationship provider, having a repeatable and scalable data center design, enjoying good access to capital, and having long-standing relationships with customers and suppliers.
“We deliver on time, we’ve built relationships with customers, they know how we operate, they know what the expectation is and the track record matters,” he said. “This is critical infrastructure, and timelines matter. Execution matters. You can’t make mistakes in this business.”
CyrusOne’s philosophy and vision since opening has made the difference.
“Our biggest differentiator as company is that we’ve always been the high-touch, deep-relationship provider from day one,” Ferdman said. “We’re not just your landlord. And that culture that has been built over the years has been consistent throughout the company, whether you’re interfacing with a customer’s operations team, legal or development team. You’re only as good as your people, are and our team is strong.”
That philosophy has helped the company create long-lasting customer relationships and loyalty.
“We still get told by customers all the time that we’re just on top of things more than others and we respond quicker,” Ferdman said. “It’s the long-standing relationships we have with customers that come back to help us with referrals or references because the can depend on us. This is why they pick CyrusOne and why they’re comfortable signing large and long leases with us.”
That comes as no surprise to Ferdman, also a co-founder of the company. But since taking the role of interim president and CEO, he told Niknam the CyrusOne team has been the biggest surprise.
“Sitting on the board on the outside looking in, I’ve always known we had a great team and their knowledge of the space, experience in the space and ability to work together was good,” he said. “But from inside looking out, it’s even better than it looks like from the outside. This team is strong, they are knowledgeable, they are cohesive, they are focused and motivated, and it’s a pleasure. It’s not a surprise that they’re good – I’m surprised at how good they are.”
Niknam noted CyrusOne’s leasing activity has been strong, as the company reported at the CyrusOne Virtual Investor Day in June, but he wondered what expectations are for the second half of 2021. While the company doesn’t provide leasing guidance, Ferdman reported some good news.
“We definitely see very strong demand both across the enterprise and hyperscale markets in both the U.S. and Europe,” he said. “We’re very optimistic with the guidance we’ve given, and it remains is applicable. We don’t always know exactly when things are going to pop, but we’re seeing really strong demand across both markets. Part of it has been the COVID-19 pandemic impact, part of it is that the market is growing.”
Demand is so strong, CyrusOne’s backlog now stands at a record $130 million and the company expects its margin to jump 300 basis points over the next three years, he added.
While the next CEO will inherit a strong company with tremendous upside, Niknam asked what type of person CyrusOne had in mind to take the company into the future and what is the hiring timeline.
“Our No. 1 goal is finding the best person for this role – someone who really understands and has a deep knowledge of the space, someone who is a great cultural fit,” Ferdman said. “The timeline is dependent on when we find that person. I’m here, I’m not going anywhere and fundamentally the right leader to bring value to our shareholders is the answer, not so much the timeline.”
For a deeper dive into Ferdman’s conversation with Niknam, please listen to the webcast here.