11 Nov He sold his company for $1.4 billion. Now this Miami legend is starting over again
November 06, 2018
If it has happened to Miami, it has happened to Manny Medina.
The resumé of one of the city’s most storied entrepreneurs reads like a history of the city’s last 40 years: boom, bust and reemergence. Immigrant. Accountant. Real estate tycoon. Failure. Billion-dollar success. Tech cheerleader. Startup entrepreneur.
And though he’s in his seventh decade, Medina is no more finished reinventing himself than the city itself.
In May 2017, Medina created Cyxtera, a Coral Gables firm whose mission is to help companies better protect their data, whether it sits in a server or in the cloud. It has already grown to more than 1,300 employees spread across the globe, with more than 100 located in Miami.
“This is bar-none the biggest undertaking we’ve ever had,” he said recently from Cyxtera’s Miracle Mile corner office. “This market is so huge. It’s not going away anytime soon — not going away in our lifetime or grandkids’ lifetime. It’s a really big problem but a big, big opportunity.”
The launch of Cyxtera takes Medina back into the business world at full speed. Six years ago, after he sold his real-estate-turned-data-center and services firm, Terremark, to Verizon for $1.4 billion, Medina was ready for a break. It didn’t last long; he soon was back investing in other tech firms and creating eMerge Americas, now the region’s premier tech conference.
In the increasingly crowded data security field — expected to be worth $52 billion by 2020 according to Allied Market Research — the young Cyxtera is still relatively unknown. Still, Medina bristles at the idea that Cyxtera is a startup, even though it would fit the generally accepted definition of one.
“This is a train going 200 miles per hour,” he said. “It didn’t stop to pick me up — I had to jump on it with my hands, my teeth, everything. It wasn’t like Terremark, building it organically and then went into M&A mode. We started with a significantly big company and critical size. It’s a startup, but it’s one big startup.”
Already, Medina says he has an IPO in his sights. If realized, it would give Miami-Dade its first high-profile, publicly traded tech company.
In many ways, Cyxtera is a next-generation Terremark. By the time of its 2011 sale, Terremark hosted more than a dozen data centers —large, bunker-type facilities that house thousands of computer servers—in addition to the Network Access Point of the Americas, through which all Internet traffic in the region is routed.
In creating Cyxtera, Medina’s team bought 57 data centers from telecom firm CenturyLink, which was looking to shift its business emphasis. Cyxtera also bought five different cybersecurity and data-management companies, most previously parts of Medina’s Medina Capital investment firm portfolio. The total tab: nearly $3 billion. Ownership is held by Medina Capital and private equity group BC Partners, which owns the majority.
The combination of so much physical infrastructure and cybersecurity software is unique in the marketplace, says Medina.
“You have data center companies — all physical data centers — and you have [cyber]security companies,” he said. “We fundamentally started with…[cyber]security carved into the physical data center.”
Cyxtera is banking on what Medina calls a software-defined perimeter. It’s software that allows a company to control all of its data, regardless of the third-party software they’re using (like Gmail), or the device used for access. Cyxtera reduces the available “surface” a potential attacker can even see. (Think of it like a “Star Wars” cloaking device. ) And what hackers can’t see, they can’t attack.
“The basic concept is, users of a resource or an app should only be given access to what they’re entitled to without seeing anything else,” he said. “Everything else is obfuscated.”
Philbert Shigh, head of Structure Research, a data center services analyst group, said that while Cyxtera is still relatively new, the acquisitions it has made give it a solid revenue base and a global data-center footprint.
What makes Cyxtera unique, he said, is the combination of infrastructure — known as co-location — and security. “They offer co-location services, but with a meaningful security wrapper around the surface…“It’s a good way to differentiate.”
Kerry Bailey, CEO of cybersecurity firm eSentire, found Cyxtera’s offering so compelling that he has signed up as a customer. Unlike Equinix, the world’s largest data-center provider, Cyxtera is marketing itself as a security-first firm.
“For us being a security company, it couldn’t just be any old data center out in the wild,” he said.
But other companies have a head start, noted Tim Crawford, founder of AVOA, an advisory group for chief information officers, and Cyxtera will need to prove its value.
“[Name-brand recognition] makes a big difference when thinking about your core infrastructure needs,” he said.
But Medina is moving quickly, thanks in part to his experienced leadership team. Many are Terramark veterans who learned the business of data storage and network services working at Terremark’s NAP of the Americas, located in a downtown Miami building off I-395 topped by giant orbs.
Cyxtera is also recruiting out-of-town experts including Greg Touhill, former president Barack Obama’s Chief Information Security Officer, and Leo Taddeo, former Special Agent in Charge of the Special Operations/Cyber Division of the FBI’s New York Office.
One key hire was Dave Aitel, a former National Security Agency engineer who joined Cyxtera as chief security technical officer when Cyxtera acquired his security company Immunity Inc. The company was a pioneer in “penetration testing, where good hackers try to break into an organization’s network to expose potential holes & vulnerabilities that bad hackers/cybercriminals/nation-states could use to get in,” explained Kelly Jackson Higgins, executive editor of information security magazine Dark Reading.
Aitel said he had received plenty of offers in the past. Medina’s personality and background drew him to Cyxtera.
“The thing about Manny, like many successful executives, he doesn’t have his ‘fight or flight’ instinct tuned correctly,” Aitel said. “He can look at something that seems impossible and continue to find ways around all the problems…We don’t look for people who have always had it good, we look to people who have overcome adversity.”
Terremark and ‘Mannyland’
Despite its spectacular $1.4 billion exit, Terremark didn’t start out as a technology firm. Initially, it was a real estate company.
Like many Cuban-Americans of his generation, Medina came to Miami in the 1960s. He was 13.
Virtually penniless, his family first lived with relatives in a one-bedroom frame house in Liberty City. Medina’s father was a cab driver, his mother a hotel maid. Medina delivered newspapers to help make ends meet. He bounced between schools before graduating from Miami Beach High School. After some convincing from his mother, he enrolled at Miami-Dade College.
At Miami-Dade College, he said, his life changed forever. “I found a nurturing environment that I had never known,” he told Ocean Drive Magazine magazine in 2016. “They give you that opportunity no matter what happened to you before.”
After two years, he left for Florida Atlantic University, graduating with a bachelor’s degree in accounting. He took a job with Price Waterhouse (now PriceWaterhouseCoopers) soon thereafter.
In 1976, he formed his own accounting firm, concentrating on consulting work for Latin American investors. But real estate was hot at the time, and in 1980 he formed Terremark.
Medina spent the next decade developing real estate, creating a footprint that stretched all the way to the Middle East but was mostly concentrated in Coconut Grove.
As the 1980s progressed, the famously bohemian enclave suddenly became home to condos and offices. In 1985, Medina convinced the Miami City Commission to change the neighborhood’s zoning so that his 22-story, 322,000-square-foot Terremark Centre (now a condo tower) could be built.
Along the way, he clashed with residents who believed he was eroding the neighborhood’s character.
The tower “will ultimately destroy our old established neighborhood in the North Grove,” MaryAnn Andrews, one of a number of Grove residents strongly opposed both to Terremark Centre and the Bayshore changes, told the Miami Herald in January 1985. “It’s going to be very glitzy, very fat on office space and parking.”
Medina would typically respond to such concerns by reminding residents their property values would end up rising if he was successful.
By 1989, according to the Miami Herald, some had come to calling the Grove “Mannyland.” That year, Medina turned 36.
Things changed practically overnight for Terremark as the new decade dawned: The collapse of Terremark Centre’s principal tenant, an event that hit right as the 1990 recession bore down, plunged the company into turmoil. By 1991, lenders moved to foreclose on Medina’s Star Island mansion.
In response, Medina moved to the Middle East for several months to rebuild schools and housing after the Persian Gulf War.
Upon his return, he settled a lawsuit related to Terremark Centre. Business picked up. One of his best known projects became the upscale but affordable Fortune House condo on Biscayne Bay in Brickell. It is now a hotel.
By the late 1990s, Medina realized his commercial real estate tenants were demanding more IT infrastructure. Soon, what had been a real-estate play turned into a Terremark’s full-scale conversion into a data center services provider. Medina also drew inspiration from seeing how his two children, Melissa (now president of eMerge Americas and the Technology Foundation of the Americas) and Manny Jr. (now bassist in country star Kip Moore’s band) were using the Internet.
“He saw it through the eyes of his kids that all this technology was becoming available — that’s kind of what triggered his interest, and how he knew it would be a big deal,” said Javier Avino, a partner at Miami law firm Bilzin Sumberg and a longtime family friend.
Terremark began building data centers and connection hubs. That effort culminated in the Network Access Point of the Americas.
And then came the dot-com bust. In January 2002, Terremark’s stock dropped more than 90 percent. Debt and cash flow issues led some to wonder whether the company would survive.
But three years later, the company was back on its feet again, thanks to the growing importance of the NAP. By then, about 90 percent of all Internet traffic into and out of Latin America traveled through the downtown Miami portal. Google and the State Department had come on as clients.
By 2011, Terremark had almost completely shed its traditional real estate portfolio to become one of the leading data centers and IT companies in the world, with 13 network hubs worldwide. That year, Verizon came calling, paying $1.4 billion to absorb the firm Medina had started 31 years earlier.
The acquisition “immediately strengthens [Verizon’s] role as a strategic supplier to the U.S. federal government and its position in a rapidly growing Latin American market, as well as adding key assets for the white-hot global cloud computing market,” analyst Nancy Wilson wrote at the time. Verizon sold Terremark’s assets in 2017.
Even without Cyxtera, Miami’s tech scene would be less vibrant without Medina. Prior to founding Cyxtera, he created eMerge Americas in 2014. Today, it is the largest tech and startup showcase focused on the Americas. This year, the conference drew a reported 15,000 attendees.
“Emerge has for sure made a big impact on the community,” according to Brian Breslin, founder of Miami tech nonprofit Refresh Miami and now director of University of Miami’s LaunchPad. “All other conferences were temporary. His organization has managed to build something sustainable that lasts.”
The conference has featured speakers from companies as large as Amazon, IBM, and Verizon.
Michael Katz, a former president at Terremark, credits Medina with helping the city become a global hotspot. Katz is now a principal at S&K Realty in Miami.
“Manny has played a very prominent role in helping to form Miami into a much more mature community,” Katz said. “Manny had foresight and vision to understand that Miami and South Florida should become the capital of internet technology for Americas.”
Still, Miami has a ways to go. Medina acknowledges — and data confirm — that Miami continues to lose top tech talent to other regions and sometimes struggles to compete for talent globally.
“Competing against guys in Virginia, Silicon Valley, Dallas — you’re competing with one hand tied behind your back,” he said.
But while Miami has been talking about becoming a tech hub for decades now, Medina is convinced this time is different. He points to increases in venture capital activity; the Kauffman Foundation’s ranking of Miami as the top city for startup activity in the U.S., and increasing tech-industry growth.
“With this momentum, I am confident that Miami will soon be known by all as a true tech hub,” he said.