Cologix is based in the U.S. but has always done a disproportionately large part of their colo business in Canada. They are deepening their Canadian investments further, and looking to add more channel strength.
Brian Cox, Cologix’s Chief Operating Officer
Denver-headquartered colocation provider Cologix made a major move into the Canadian market shortly after their own founding. They have maintained – and increased – that presence. Now they are engaged in an additional push in the Canadian market, which they see as an extraordinarily promising one for their services.
The company was founded in 2010, and shortly afterwards made a pair of major plays in Canada.
“When we were founded, our intent was to maximize the opportunity of interconnection-focused colocation services,” said Brian Cox, Cologix’s Chief Operating Officer. “In 2011, we established leading positions in both the Toronto and Montreal markets with two separate beachhead acquisitions. These gave us strong positions in the carrier hotels at 151 Front Street in Toronto and at 1250 Rene Levesque West in Montreal. It let us seize the leading position in both markets, and we have consistently deployed capital to Canada over the last seven years.”
Cox said that following that initial round of expansion into Canada, around 70 per cent of Cologix’s revenues came from Canada.
“Today, it’s 30 per cent, but it is a fast-growing business, and a very high proportion of our investment continues to go to Canada,” he indicated. “We see a ton of US-headquartered companies in Canada needing Canadian capacity. We see large cities with very strong and unique aspects of their business climate. We think Canada has a lot of potential.”
The amount of capital available to Cologix increased in 2017 with the company’s acquisition by private equity firm Stonepeak Infrastructure Partners, in what was essentially a funding round to fuel another round of growth.
“This equity round is focusing the next evolution of Cologix,” Cox said. “Traditionally, we focused on network needs. Now customers increasingly want more compute and storage as well. The additional equity investment will facilitate this. A significant focus of this investment is building up hyperscale investments in Montreal, Vancouver and Toronto.”
Cox said that Cologix is looking to use these enhanced compute and storage capabilities as a differentiator against their larger competitors.
“Those competitors focus on either network, or on storage and compute,” he stated. “We now look to provide an end-to-end solution.”
Cox said that the traditional networking business in the carrier hotels were relatively small builds, of between 20,000 and 40,000 square feet.
“We are now expanding well beyond that,” he said. “In Vancouver, we are completing 50,000 sq ft of a single building. In Montreal, we are looking at 300,000 square feet as part of a broader campus. In Toronto, 151 Front is now pretty constrained, although there is churn, and we just brought online another 20,000 square feet there that used to be an East Side Marios.”
The Canadian customer base is pretty diverse.
“We originally acquired our initial customer base in Canada with our 2011 acquisitions,” Cox noted. “We have turned those into long-term customer relationships, which have been renewed multiple times. They range from SMEs that need one or two cabinets to get servers out of closets, up to the leading clouds, who prefer us to the bigger guys. We have great representation among the big Canadian banks, the Canadian operations of large-multinational organizations, and Far East companies coming into Canada. We’ve found a way to foster all of these and not offend any of them by using a ‘one size fits all’ strategy.”
Until fairly recently, Cologix’s Canadian strategy was fairly low-key, despite its importance to the company.
“We didn’t broadcast a lot about who we are and what we are about,” Cox said. “We wanted to have a first mover advantage. When you are a smaller guy, it’s helpful to not have the big guys knowing what you are doing. So we were somewhat clandestine in our marketing and our public relations.”
Lisa Guillaume, Cologix’s Chief Marketing Officer
“We made a lot of investments in growing those markets in Canada,” said Lisa Guillaume, Cologix’s Chief Marketing Officer. “Now we are at a point of using marketing more to grow the company more organically.”
Cologix has had a channel program for many years, although the channel is rather different in Canada than it is in the U.S.
“In the U.S., the channel is more of a typical master-agent channel,” Guillaume said. “In Canada, it is more a question of our local sales and operations people working with local partners, who are our primary Canadian channel, and co-selling together. In 2019, we will also be investing in our hyperscale partner program, which is somewhere where we need more visibility. So we will be both deepening our partnerships with hyperscalers, and investing more in local feet on the street.”
“We are looking to scale up our channel and deepen our channel relationships in 2019,” Cox stated. “We want to expand our ability to deliver across networking, compute and storage, so customers can take advantage of our low latency solutions.”
“We have a lot of irons in the fire right now,” Guillaume said.
