Colocation Data Center CEOs
What does the CEO of a colocation data center do on a typical day?
While some may argue that there is no such thing as a “typical” day, there are definitely patterns for certain kinds of initiatives, responsibilities, and projects -- especially among the senior leaders at small- and medium-sized providers.
In this podcast episode, you’ll learn about eight different areas -- and eight different “hats”-- that the colocation data center CEOs may be wearing during any given day, week, or month.
Welcome to the ColoCast Podcast -- where CEOs, sales directors, and marketing directors of colocation data centers learn how to pick the right niches, stand out from the crowd, achieve trusted advisor status, compete more aggressively, accelerate the sales cycle, and grow revenue.
I’m your host Joshua Feinberg, from the Data Center Sales & Marketing Institute.
Understanding the Habits of CEOs of Colocation Data Centers
And today we’re going to dive into the daily habits and routines of CEOs of colocation data centers.
Now when people think of colo data centers, usually what’s top of mind are things like business continuity, connectivity, construction, cooling, power, disaster recovery, engineering, hosting, infrastructure, security, architecture, facilities, operations, and engineering.
But every colocation data center has a leader, a CEO, that builds enterprise value, develops their data centers, develops new business, and sets the overall strategy for the firm.
Now on a more tactical level, one of the things that people are usually pretty curious about is what does the CEO of a colo data center do all day. What does their daily routine look like?
So we set out to give you an overview of this and we found as there are seven or eight different areas that tend to come up over and over again, regardless of whether we're talking about locally-owned colo data centers with a single location or two, regional data centers with a handful or so of locations concentrated within a car drive of each other, and national and international colocation data centers.
At smaller colo providers, where there's a single location or two locations and perhaps somewhere between 10 and 30 employees, the daily routine of the CEO is quite different than the daily routine of the CEO of a large, multinational colocation provider.
Most of what we're talking about will generally be applicable at the small- and medium-sized colo providers. Some of this will be applicable more to middle management and senior management at the handful of really large multinational, publicly-traded billion-dollar data center operators.
1. Funding/Raising Capital
The first thing that most CEOs spend a lot of time on because colocation facilities are constantly expanding, is raising capital and getting funding from real estate Investment investment trust (REITs), banks, and investors.
Colocation is a very capital-intensive business. Because of that, most CEOs by definition need to be pretty adept at and spend a lot of time on financial issues.
One of the things that tends to come up a lot are mergers and acquisitions (M&A), especially with private equity firms. CEOs will also spend a lot of time networking and keeping up with capital market conditions.
In most cases, it’s because CEOs are thinking about how to fund the next stage of expansion for taking their company to the next level. So raising capital and funding are a huge part of their daily, weekly, and monthly routine.
2. Designing and Building
Another big area that CEOs of colocation providers tend to spend a lot of time on is designing and building mission-critical facilities.
Now the CEOs are typically not the be-all, end-all experts on designing and building, but somebody has to be in charge of the overall strategy for the design and build projects.
Think about it: who is really happy and staying put with their current amount of square footage that they have under management and their current number of locations.
It's very rare for colocation providers’ square footage or number of locations to shrink. Facilities can become decommissioned over time, but at least in the colo space a much larger replacement coming online.
But one of the ways in which a colocation provider can move on to bigger and better clients is by being in more locations. So the CEO is always thinking about this.
As the company approaches capacity in their current facilities, the CEO begins thinking about expansion, designing, and building issues for or other reasons.
Whether it's expanding the number of facilities and the amount of square footage, whether it's being able to have more power capacity, most colocation providers and their CEOs are either in perpetual growth mode or planning for growth. Sometime during the day, or at least sometime during each week, CEOs are thinking about some facility-related projects, design, and space planning.
They're considering different issues related to site selection. Maybe they're meeting with some commercial real estate brokers. They’re dealing with issues related to construction management, cooling, power, and negotiating leases.
Another big area that CEOs of colocation operators spend a lot of time on is process. This includes developing and improving processes that run the company. In order for a data center operator to run efficiently and profitably, the CEO and their team really needs to be obsessed with process.
Most CEOs have good strong leadership teams in place to help with developing and refining processes. Obviously, the smaller the colo provider, the more hands-on the CEO is going to be with this. For larger, multi-location colocation providers, the less hands-on the CEO would be with this.
Especially with small- and medium-sized colocation businesses, the CEO usually wants to and needs to keep a pulse on various dashboards and key performance indicators at a high level. The CEO needs to, at a minimum, ensure that at least all service level agreements (SLAs) are being adhered to.In most cases, the CEO has board members and investors that are demanding accountability. The CEO, of course, wants to make sure that they're saying one step ahead.
4. Strategic Initiatives
Another big area that a lot of CEOs of colocation providers spend their time on is strategic initiatives.
What do we mean by strategic initiatives? This includes high-level company strategy: either business strategy or go-to-market strategy.
CEOs will also spend a lot of time on regulatory issues, including navigating regional, state, and federal regulations, as well as available incentives.
Most colocation CEOs spend time cultivating strategic partnerships with wholesale providers, telecommunication providers, software and hardware vendors, and anything that can be especially relevant to delivering value to their clients, as well as for the board members and investors.
CEOs will spend a lot of time on recruiting and hiring key executives.
Not only do we see a lot of merger and acquisition activity going on in the colocation industry, we see a fair amount of musical chair -- where C-level executives and senior management of one colo provider are moving to another colo provider, sometimes for geographic reasons, or better career opportunities. Maybe one company is in better financial shape than the other.
Recruiting and hiring is a big deal for CEOs that are building a senior leadership team.
And the CEO will also spend a lot of time assessing how their company fits into the competitive landscape. This will change very frequently with so much industry consolidation, so many mergers and acquisitions.
5. Managing and Developing Staff
At small- and medium-sized colocation firms, the CEO’s direct reports usually include a Chief Financial Officer (CFO ), Chief Operating Officer (COO), a Chief Technology Officer (CTO), and sometimes a Chief Information Security Officer (CISO).
Sometimes on the sales and marketing side, there’s a Chief Marketing Officer (CMO) or a Chief Sales Officer (CSO). With really progressive colocation providers, there’s a Chief Revenue Officer (CRO) integrating marketing and sales together. But if there's no Chief Revenue Officer or Chief Sales Officer, there’s usually a director of sales or VP of sales.
Managing and developing staff, at the most senior level, is a big priority for CEOs.
6. Major Client Accounts
With the largest data center operators like Equinix and Digital Realty, the CEO is not quite as hands-on in account management and client relationship nurturing.
But with small- and medium-sized colocation operators, the CEO is spending at least some time each month, quarter, or year on issues related to major client accounts that warrant attention at that level.
For new client opportunities, depending on how strategic and how large the opportunity is, there are also a lot of times when the CEO is brought into late-stage meetings by their VP of sales or Chief Revenue Officer.
In general, you can expect to see CEOs spend significant time on customer relationship building, helping to set the strategy for marketing, helping to set the strategy for business development -- again complementing any internal senior leadership team members like a VP of sales, Chief Revenue Officer, or Chief Marketing Officer.
Again, while those folks will have primary responsibility for cultivating new accounts, the more strategic the potential client is, the more likely at some point they're bringing the CEO in for a late-stage meeting.
7. Industry Conferences
Another big area that you tend to see the CEOs of colocation providers getting involved with is just raising the overall profile of their firm.
So the CEO tends to be the one who gets interviewed and quoted in industry trade publications. The CEO is also the one that you see speaking most often at industry conferences.
Now, there are some exceptions to that. There are some colocation providers that send another C-level executive, especially if it's a more technically-oriented conference. The colo provider will perhaps send its CTO or facilities director. However with smaller colocation providers, as long as the topic is an area the CEO is knowledgeable about, the CEO is usually the better fit.
The CEO, most of the time, will have a strong desire to be perceived as a thought leader within data center, mission critical industry.
Don’t think for a minute that colocation CEOs only go to conferences that are specific to the data center, mission critical industry. Many local and regional providers spend a lot of time at local IT conferences. Many will go to a lot of industry-specific conferences if they're really deep in fintech, healthtech, or educational technology.
There is a pretty broad range of conferences, trade shows, and expos that colocation companies get involved in. But it’s very common to see CEOs speak quite often at 7x24 Exchange, Datacenter Dynamics, and Data Center World.
8. Chief Learning Officer
One final area that CEOs of small- and medium-sized colocation providers tend to get involved in is with wearing the hat of the company’s Chief Learning Officer (CLO).
What does this mean?
They’re on the front lines. They’re the first person that’s absorbing industry change. They’re the first person that’s paying attention to analyst briefings to see where things are headed, trying to keep the company and the board one step ahead.
They’re trying to stay really close to their biggest clients to really understand where they see the needs evolving to 6 to 24 months from now.
The Chief Learning Officer is just another one of the seven or eight different “hats” that you'll see the CEO of a colocation provider wearing.
Summing Up: The Eight “Hats” of Colocation Data Center CEOs
To recap, CEOs of colocation providers spend a lot of time:
Raising capital and funding issues
Designing and building data centers
Developing and improving processes
Managing and developing staff
Visiting major client accounts
Speaking at conferences
Acting as the company’s learner in chief
I’m so glad that we’ve had you with us for this very first episode of the ColoCast Podcast.
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I’m Joshua Feinberg. And we look forward to seeing you back again next time when we’ll continue the conversation about how you can pick the right niches, stand out from the crowd, achieve trusted advisor status, compete more aggressively, accelerate the sales cycle, and grow revenue.