The current economic environment itself has influenced our growth and created demand in two ways; because
- We help companies save money. As a late entrant into the market, we were able to identify different ways to save costs and package offerings which in turn have enabled us to provide services with a better SLA at a lower price.
- We give companies peace of mind. Everyone is competing for business and in a competitive business environment the need for immediate information doesn’t go away, it only gets worse. As part of our offering, we provide customers with 100% availability to their systems, enabling them to focus more on their businesses and less on their technology.
The economic environment albeit is tough, but the competitive environment is tougher. Increased competition for our customers within their own industries is what drives the need for immediacy of information. Downtime is so unacceptable that if any business in any competitive environment had recurring downtime, their customers would find other solutions. Because of that, people are forced to outsource so that they can maintain availability.
Can you elaborate on "As a late entrant into the market…"? Conventional wisdom says that high-growth businesses aren't created in mature markets. What are some of the advantages of being a late entrant?
I agree that there are a number of entrepreneurs who have dismissed potential business opportunities because they felt the market was ‘too mature’ and many might argue that we were taking a big risk launching CyrusOne in the midst of a tech bust. However, we did not believe that the market was mature and felt that the early entrants had failed to really penetrate the enterprise market. At CyrusOne we feel that we are creating the market for outsourced IT services to the enterprise marketplace, by bundling services in both a third party data center and within a customer location, with a group of service options not typical in a ‘hosted’ environment.
As a result of our late entry, we were able to use what we saw as mistakes in the execution strategies of our ‘soon-to-be’ competitors. We were able to see what was working, what wasn’t’ and then turn that into a positive. For example, we saw the importance of effectively purchasing bandwidth at specific rates without over committing; a strategy that provided us with an edge as companies continued to overbuy at higher prices, affecting their ability to sell at competitive rates and therefore lose money. Every businessman knows that great margins are made at lower than market rates.
So, in summary, the key to your survival is...?
CyrusOne has and continues to survive because of our commitment to building solid relationships with our customers, with our vendors, and with our partners. We survive because we are able to deliver what customers want and need rather than what we think they want and need, and that makes a difference.