I had the pleasure of interviewing George Pollock, Jr., Senior Vice President, Chief Financial Officer & Treasurer of vXchnge. George brings more than 25 years of finance experience to vXchnge, where he handles all finance and human resources functions. He previously served as Senior Vice President, Chief Financial Officer & Treasurer at Switch & Data, where he oversaw six accretive acquisitions and the company’s 2007 IPO. Before his tenure at Switch & Data, he was Chief Financial Officer of the Merchant Banking Division of Communications Equity Associates, Inc. (CEA), where he was responsible for the financial and administrative functions for a $600 million portfolio of private equity funds.
Who is vXchnge? What’s the background story of vXchnge?
vXchnge is a colocation data center business that provides reliable infrastructure and connectivity options to organizations looking to move on from their outdated or inefficient on-prem IT solutions. We are a young company as far as the data center business goes, so that has allowed us to bring a fresh perspective to the colocation market. Most of our founding team has had years of experience working together and working at other data center providers. When we started vXchnge in 2013, we wanted to give customers a better way to run their business within a colocation environment.
Why vXchnge? What makes vXchnge different?
From the very beginning, we have emphasized transparency and control. Historically, it is remarkable how little information most providers shared with customers about their deployments. How much power are they using at a given time? Where are their servers located right at this moment? Getting that information was such a hassle that a lot of companies were hesitant to consider colocation solutions. That is why we worked with our initial customers to develop the in\site platform, which gives them total visibility into their deployments and provides the control they need to make informed decisions that impact their technology stack. At vXchnge, we combine that capability with a deep commitment to good customer service. That is what sets our data centers apart.
How is vXchnge positioned in the industry (currently)?
We are growing our capabilities every day. Right now, we have a presence in many markets around the U.S. We are able to serve a wide range of industries, whether network providers, financial services, retail, managed service providers, and so on. One of the things we frequently hear from our customers is that we have the flexibility to meet their specific needs. When someone comes to us for infrastructure services, we offer the flexibility to customize their environment. So instead of trying to fit a square peg into a round hole, we work with customers to assess their needs and then cut the hole to their unique dimensions.
Where does vXchnge see itself in 5 years? What does the industry look like?
The days of space, power, and cooling being a differentiator is a thing of the past. Those performance efficiencies are foundational colocation services you can get anywhere. What is going to set providers apart from the pack in the future will be the quality of the tools they are providing to customers to manage their business for efficiency, resiliency, risk mitigation and compliance. That is why we are continuously working on adding capabilities to the in\site platform. Things like API integration, RFID tracking, and IT ticketing, they are all designed to put power and control directly into the hands of our customers. We want our data centers to feel indistinguishable from their on-premise data solution. That commitment to transparency and access is where we see the industry headed and we’re trying to stay ahead of that curve.
Where is the demand coming from for colocation services? What are you seeing in the market? Who’s buying?
The colocation industry is benefiting from a couple of factors. The in-house data center is not a good place to be. Too expensive, aging infrastructure, lack of network options, limited risk mitigation services and probably out of compliance. There are a lot of startups looking to get access to enterprise-level data center capabilities without incurring the massive capital expenses necessary to build their own data center. Colocation services are perfect for them because they can control their costs more easily while also gaining access to whatever cloud services they need now or may need in the future. At the same time, many existing organizations are getting tired of maintaining their aging on-premise infrastructure. A lot of companies that made those investments around the turn of the century are looking at what it will cost to upgrade and deciding that colocation provides much greater flexibility in terms of cost control and capabilities. They do not have to worry about right-sizing their infrastructure for the next few years.
What markets are you seeing the most demand?
The Austin colocation market has experienced good demand. Disaster recovery planning has become a priority as Hurricane Harvey really exposed how vulnerable the Houston area is to flooding. While the data centers in the region held up well during the storm, many were inaccessible because the surrounding roads were flooded. Companies had to reassess their disaster recovery plans and look at Austin as good location for backup and redundancy. The greater Austin metro area is also one of the fastest-growing cities in the country, and there is innovation happening there with the University of Texas and the Tech companies moving in. Overall, it is an exciting market that presents tremendous opportunities for us.
What about the cloud? How is vXchnge positioned?
The flexibility and cost savings are just too beneficial for most organizations to pass up moving certain apps to the cloud. Having said that, companies have become a lot smarter about how they utilize cloud services. They know what data and applications can be safely located in the cloud and what needs to be kept on their own private networks. That is where a colocation provider like vXchnge can provide value. We make it possible for them to build hybrid IT environments that let them manage multiple cloud services while still keeping their mission-critical assets safely secure within a private network.
What about connectivity? How is vXchnge positioned?
Building those hybrid IT environments is all about performance. You need to be able to offer direct on-ramps to the cloud that help to reduce latency and avoid the security risks that come from exposing sensitive data to public internet connections. From our perspective, colocation is not just about where you put your servers, it is about what you can do with them once they are embedded within a connectivity-rich environment. Having access to multiple connectivity providers and cloud services helps you to control costs and spin up new capabilities quickly to help you meet demand. We have worked hard to build relationships with those providers to provide our customers with all the connectivity resources they need to respond to existing and future challenges.
What do you think about data center automation? The future of data centers?
One of the things we have learned from the COVID-19 outbreak is that existing automation trends are going to accelerate. The fact that our customers could still manage their assets remotely using in\site was a huge benefit for us when the pandemic hit. They did not have to worry about sending people to the data center and potentially exposing them to harm. Our data centers are still staffed 24x7x365, so we put measures in place to address the health risks for our employees and customers while still maintaining the operating integrity and performance of the data centers. I think it is important for the colocation industry to retain that human element in order to provide great customer service. Automation is necessary, but there is no substitute for having a technician on-site who can physically inspect your assets whenever you need them to.
Future technologies? What about Artificial Intelligence (AI), IoT, 5G? How is vXchnge positioned?
We monitor and research the latest trends. When we started vXchnge, we knew edge computing was going to be a consideration for our customers when they started rolling out IoT devices, providing cloud services, and delivering streaming media content. That is why we established a presence in markets that may not have seemed like high priorities at the time. Now we have the coverage and flexibility to help customers keep latency low and improve the reliability of their digital services. With respect to artificial intelligence and machine learning, I think we have been focused on helping to connect customers to the cloud computing resources they need to leverage those technologies. Most companies do not have the processing capabilities to handle big data analysis, but we can connect their systems to cloud providers who do. Again, it all comes back to flexibility. We are always on the lookout for ways to help our customers push the envelope and access the latest and greatest technologies without having to rebuild their IT stack from the ground up.
Any other services or solutions to highlight from vXchnge?
Adding new features to in\site is an ongoing effort. Last year, we rolled out the mobile app that allows customers to access in\site from anywhere to manage access, monitor power and bandwidth, and manage support tickets. We added the API integration to make it easier for customers to leverage the massive amounts of data that in\site generates. We are also always working on reliability. Uptime is really important to every business and we take our 100% SLA commitment very seriously. vX\defend, our DDoS mitigation service, has been a big part of this effort, and we are working to expand our overall risk mitigation services to accommodate a greater range of business continuity and disaster recovery plans. Overall, it is an exciting time to be a data center provider.