The Trials, Tribulations, and Accolades of a CEO: A Conversation with Michael Ortiz, CEO of Layer 9 Data Centers

Hi everyone,

After my time at UCLA and while applying to graduate programs for an MBA, I plan to bring the software we've been developing to market and serve as the company's CEO. To help with my roadmap, I asked Michael Ortiz, the CEO of Layer 9 Data Centers, to sit down with me and discuss his path as a CEO. He graciously agreed to guide me along my journey.

John Porter: Michael, thank you for doing this. Ready?

Michael Ortiz: Yes.

John Porter: When you first started Layer 9, what was the first ah-ha moment that led you to start the company, and what have been your biggest hurdles thus far?

Michael Ortiz: I'm going to start with myself. I've never held a position

of this leadership level before. I've held senior vice president roles at Digital Realty and VP roles at DuPont Fabros, and I have been managing director of brokerage firms. I've never been tasked with listing a company from its genesis, from nothing but powder into brick and mortar, and building it into a company. That alone is difficult enough, much less doing it in a country that is foreign to how you typically do it in the United States.

John Porter: Because you're in Mexico?

Michael Ortiz: Absolutely, so first, I didn't have a road map where I had done it before, and two, I  didn't have a road map to how to navigate through Mexico. First, those are the two immediate obstacles I faced when I entered this. For the company itself, we're doing something that has never been done before in terms of the sheer scale, size, and speed at which we want to do it. We're really introducing the Tesla in a world that has very much lived with automobiles of combustion engines, so that is a new product and new process with a team that has never really worked cohesively together.

John Porter: Was it unique to Mexico?

Michael Ortiz:  Mexico is a very infant and embryonic market that is going to be growing at an exponential rate just because cloud computing has nowhere else to go but across the border; there's just no power in the United States.

John Porter: How do you foresee the United States overcoming that power shortage?

Michael Ortiz: You know, one word: nuclear. That's the only way we are ever going to get to it. For example, in the United States, these numbers are fresh to me because I just spoke at a TED talk with George Rocket from Data Center Dynamics about the state of the market. There are 17,000 megawatts of capacity built in the United States for 340 million Americans—in Latin America, including Mexico, Argentina, Colombia, Brazil, and Chile. The five regions have 650 million people and only 700 megawatts of built capacity. So that's a huge disparity. It is now one of the fastest-growing regions in the world.

John Porter: Building hyper-scale data centers requires significant capital investment. What have been your biggest challenges while trying to secure funding for the development of this project?

Michael Ortiz: That's a super easy question for me. Simply put, it's experience in the market. There's never been a project like this, and of this scale built, there's nervousness. They never built in this market; therefore, there's additional nervousness. There's a concern about whether power can actually service the site because there's a perception that there is no power in the marketplace. So, with a group like ourselves driving the path of power beyond 50 megawatts, there's a bit of disbelief. You remove all that by working with private equity to convince private equity that you have the process, the people, and the platform to build this. You show just enough line of sight with Cloud Service Providers to entice private equity groups to tip over and say, You know what? We're going to fund this at risk to a certain degree, and you process that in play when you get the project started, and by getting the project started, that's the proof of life.

John Porter: The data center industry is evolving rapidly; what are the most significant trends shaping this industry's future?

Michael Oritz: Artificial intelligence in the next 10 years will occupy 75 to 80% of all computing globally. In the next five years, it is projected to grow to 75 gigawatts. If you were to put the entire data center business on a pedestal, it took 25 years to go from zero gigawatts in 1990 to 25 gigawatts today. We're going to go from 25 gigawatts to 100 gigawatts in the next 7 to 10 years. Other things that I see in the future are the usage of nuclear energy and micronuclear reactors to power up these data centers.

John Porter: Looking into the future, do you see any legislation coming through concerning nuclear power to ameliorate that deficit issue?

Michael Ortiz:  I think the first step this next presidency will have to take is to protect the infrastructure that's in place, and that's the cybersecurity element. Our water supply, power supply, and distribution of key critical infrastructure are controlled by a host of a handful of computers and have been broken into and attacked in the past. If someone wants to wage war on the United States, it will not be with a minute man missile; it would be a cyber attack that takes down our water supply or the entire cyber security network infrastructure. Billions of dollars of upgrades are needed for our current supply grid. It's a 50-plus-year-old grid that, quite frankly, has not been upgraded. When you think about where the weakest spots in the chain are located, it's in all the urban areas of the United States. It will be Texas, Florida, Los Angeles, and Northern California, and in just those regions alone, 65% of the entire United States population lives within 100 miles of these urban centers.

John Porter: Looking into the future, do you see your company aligning with nuclear power solutions for your facilities?

Michael Ortiz:  You know, I think in Mexico, we certainly will be looking in other regions of Latin America and the Americas and Europe where we can bring this model to light. One thing we could not do in Mexico is bring sustainable energy to the market based on how the government grid is structured today. It makes it challenging, but I think going forward, we need to look in areas with sustainable wind farms, acceptance of nuclear energy, and willingness to use derivative forms of bio or geothermal power.

John Porter: I think I'll finish this. What advice would you give an aspiring entrepreneur considering launching a start-up of any capacity?

Michael Ortiz: Number one, pick the right Graduate School. Pick the right Graduate School with a really strong, tight alumni network. You're going to need bright minds, brilliant minds. I'm talking about mids that have made it, minds that have failed and done it again and again and again. Number two, be humble and be grateful for everything given to you because you're going to find a door that will open itself when someone remembers you as

an individual who was appreciative and thankful for people's time. It's the one thing people don't realize; it's what's most precious to wealthy people. It's their time. Number three, we have got her teeth kicked in many times and got back up. We could have probably closed the shop four or five times, but we haven't. We've not given up; we've been persistent, and as much as persistence says right, fortune favors the brave. I also have to say that fortune favors the persistent ones, right? Don't give up on the vision, and know there's light at the end of the tunnel. The hardest job I've ever had in my life is this job, and I'll tell you it is also the most rewarding job I've ever had.

John Porter: Thank you for your time, Michael.

I hope this conversation provides valuable insight to anyone considering entrepreneurship for their future. The path to success can contain tremendous adversity, to which there is no road map to navigate. However, with valuable guidance, perseverance, and the experiences of those around you, you might find enough support to achieve success. Overcoming these challenges can strengthen your resolve and better prepare you for future obstacles.

As I proceed down my path, applying to graduate programs and working towards bringing our software to market, I look forward to sharing more of my journey with you. I hope to help ameliorate any obstacles that others might encounter and inspire those unsure about tackling the challenges of entrepreneurship.

Thank you once again, and stay tuned for more updates and insights.