Long Road From Cuba: Manny Medina, CEO of Terremark (Part 5)

SM: Let’s talk about how your business has changed. What is it like today?

MM: We are now a global company spanning three continents. We have 800 employees, guided to more than $290 million in revenues, and $82 million in EBITA. It is a completely different company.

SM: What was your progression from 2001 to 2009 in terms of competing in the market? As you broadened out of the local market, you started facing national competitors; how did you differentiate your service?

MM: Our differentiator is our full suite of services that lay on top of the network. Our network quickly grew beyond Latin America because all of the European carriers came east and the North American carriers came south. We added security, hosting, and storage on top of our services.

A data center business typically has two models. Model A is to rent space and do everything yourself. Model B was to outsource everything. Our model, from the beginning, is that we provide a hybrid model where CIOs can pick as much or as little as they want from us. That model has been a big differentiator.

SM: Can you talk about the layer of the land as it evolves from the beginning of the decade to today in terms of the players and their market shares?

MM: In the United States you had companies such as Equinix and Switch and Data, which did not exist at the beginning of the decade, and companies such as Exodus and Global Center disappeared. Equinix and Switch and Data became the neutral collocation providers. Savvis became a carrier if you will. It ended up being the network of Cable and Wireless and the remnants of Exodus. Savvis kept the network piece. That is the difference between them and Equinix, Swith and Data, and us. We do not own the network.

It was recently announced that Equinix bought Switch and Data. When it comes to purely collocation Equinix is the clear winner. Data center is only about 30% of our revenues. Sixty percent of our revenue is purely managed services. We also do 10% in network services which is peering, cross connects, and so forth.

SM: How has managed services evolved over the past eight years, and what role have you played?

MM: Until five years ago it was really just hosting, storage, and security. We actually began providing managed hosting, storage, and security. We bought a few companies here and there to augment our offering. Five years ago we embraced virtualization. We felt that virtualization was going to be a watershed moment in our industry.

We became very close to VMWare and started offering virtualization for our customers. We began providing the compute capacity through an interface through a so-called cloud play. We began offering our enterprise cloud about a year and a half ago. Today, if you take a look at our stack of managed services versus where we started, we have a full suite of services and a very advanced security service. We also offer disaster recovery in the cloud. While we also still offer the traditional managed hosting, we also offer virtual servers and cloud computing which we believe will be a paradigm shift on how this industry evolves.

This segment is part 5 in the series : Long Road From Cuba: Manny Medina, CEO of Terremark
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