It has been quite a while since my career path led to CoreSite. And as we celebrate 23 years in the data center industry, I have the opportunity to reflect on data center evolution and my history with the company as well.
Third-party data centers started out as “carrier hotels” in the early 2000s, where networks could connect with each other to exchange information and bypass the incumbent Baby Bells. CRG West, a portfolio manager formed inside of the Carlyle Group and the future CoreSite, was founded to manage the real estate and interconnection-related services at One Wilshire® in Los Angeles, one of the most densely networked facilities in the world, 55 South Market in San Jose, California, and 1275 K Street in Washington, D.C.
Here we are two decades later, with data-intensive technologies like artificial intelligence, video streaming, business analytics, finance and healthcare requiring sub-millisecond latency, highly secure networks and unfailing availability. Facilitating the exchange of data and information between enterprises, network service providers, and the cloud and their end-users has become critical to the evolution of the digital economy.
How did we – the data center industry – get here? What makes CoreSite different from other data center providers? And what has compelled me to stay at CoreSite for 20 years? Read on to know.
Interconnection and The Digital Age
CoreSite’s early data center customers were primarily networks and the technology enterprises that used them to reach their customers. CoreSite carved its niche in the market by leveraging the key interconnection facilities in LA and San Jose. At a time when data and voice traffic was forced to travel over captive networks, CoreSite’s strategy was to offer a carrier-neutral exchange point. We sought to attract as many networks as possible to our facilities, which would lay the foundation for our customer ecosystem.
At this time, the vast majority of enterprises had on-premises data centers. Whether that was a telecom closet in an office building or a purpose-built facility that they managed, those data centers served a company workforce that was rooted in the office.
Prior to 2007 most data traffic was B2B, as early consumer mobile phones were largely limited to voice and email. In 2007, the iPhone revolutionized how people communicated and consumed data. It was a disruptive innovation that enabled people to access the internet on the go and, in turn, triggered a jump in the volume of data transport. Around the same time, Google was gaining traction, providing a search engine platform for finding enterprise content designed to take potential customers past the home page on their buyer’s journey. The mobilization of data began a shift in how companies managed their IT infrastructure.
When I started as an analyst for CRG West, I was responsible for underwriting acquisitions and communicating investment performance on Carlyle’s data center portfolio. Carrier hotels were the primary targets for acquisitions, serving as internet data exchange hubs.
CRG West rebranded as CoreSite prior to becoming a publicly traded company in 2010. We had grown our portfolio to 11 data centers, capitalizing on the demand for network interconnection and data exchange.
Around the same time, the next transformational technology was emerging to support the mobilization of data – the cloud.
The Cloud and the Campus Model
A TechTarget article estimates the cloud as we know it began around 2010. Early pioneers Amazon, Microsoft and Google started to develop cloud computing platforms as a way for enterprises to transform their IT architecture. One key benefit was enterprise employees became untethered from the office while retaining access to business applications. It also allowed companies to replace a capital intensive, non-core business segment with a smaller recurring operating expense model.
The cloud also gave rise to new “X-as-a-Service” industries that are colocation customers in our data centers today. Similar to the network-driven customer, these companies generate revenue by leveraging our interconnection capabilities and customer ecosystems. For example, many SaaS products that we all regularly use leverage both the public cloud and colocation facilities to allow customers to access their software platforms.
Building upon its history, CoreSite also purposefully positioned itself as a cloud-neutral data center provider. In addition, we realized that the critical differentiator for data centers in the cloud era would be the access point, or “onramp.” Direct connection to public clouds allows the highest performance and least expensive way to access providers such as AWS, GCP and Azure. CoreSite’s control over key interconnection points allowed us to be one of a select group of providers chosen to facilitate early direct access to the cloud.
CoreSite started our campus model to facilitate the higher densities and space requirements of enterprises migrating to colocation facilities. The growth of the cloud accelerated the need for this type of space, connected back to a network hub. Our campus model connects our network and customer ecosystems via low-latency dark fiber connections to enterprise-grade data center space designed to accommodate the latest applications.
The Impact of Artificial Intelligence
While it is still early innings, the emergence of artificial intelligence is shaping up to be the next disruptive innovation spurring significant evolution in the data center industry. As with networks in the 2000s and clouds in the 2010s, CoreSite is in a position to enable the adoption of AI by our customers. Our roots as a carrier hotel operator and developer of purpose-built data centers should help facilitate the exchange of information and environment supporting AI.
Current customers can test AI services in our data centers, connect to cloud services, move data economically from clouds over native onramps and gather data from myriad sources, even at the edge. New AI service enterprises can accelerate time-to-market by tapping GPU-as-a-Service offerings to complement the workloads they deploy in colocation data centers.
The way AI is evolving validates the hybrid IT paradigm. Smart cloud is paving the way for “smart AI,” with workloads deployed in an architecture that optimizes economics and customer performance.
One Last Thing – CoreSite Culture
I have often been asked, “What has kept you at CoreSite for almost 20 years?”
While there are numerous reasons, two stand out above the rest. The first is the people and culture. The people who work at CoreSite care more about helping each other for the benefit of the company than trying to one-up each other to advance their own careers. Not to say there is a lack of ambition, but they direct that ambition to CoreSite's success.
The other reason is that I have had the opportunity to work in several different areas of the company as it has grown. From analyst to investor relations, treasury and general management, to corporate development, the variety of roles have provided experiences that help me view things from many different perspectives.
Happy birthday, CoreSite!