Cogent CEO offers insights on VPNs, remote work trends – FierceTelecom


Because of the pandemic, Cogent’s corporate business has suffered six consecutive quarters of negative growth. The company serves slightly over 1,800 skyscrapers in North America with dedicated internet access and virtual private network (VPN) services. It has just under 1 billion square feet of multi-tenant office space in the U.S. and Canada. So Cogent has an inside view of work-from-home and work-from-office trends.

Speaking at the Bank of America Securities conference today Cogent CEO Dave Schaeffer said that over the past 16 years as a public company its corporate business has grown at an average of just under 11% year over year. “We had two negative quarters of growth at the end of 2008 and beginning of 2009 with the financial crisis,” said Schaeffer. “The pandemic has been longer and deeper than that crisis.”

Since the Covid crisis, Cogent has seen roughly a tripling in vacancies in the buildings it serves — going from about 4% to 12% vacancies in its square footage.

The situation varies, depending on the city. In cities such as New York and San Francisco, the average number of employees entering the buildings are in the low 30% range. While that number goes up to the mid 60% range in cities such as Houston, Dallas and Miami.

RELATED: Cogent sees SD-WAN upgrades resume amid return to office

But Schaeffer said enterprises are beginning to crystallize their visions for how their employees will work in the future. Most companies are planning some kind of hybrid work plan.

One thing they’re doing is shrinking their floor plans. “That is actually a positive for us,” said Schaeffer. “We serve slightly over 1,800 skyscrapers in North America. In those buildings there’s approximately 550,000 square feet, and pre-pandemic there were 51 tenants. If each tenant shrinks its floor space, we would see the total number of tenants actually go up.”

Because Cogent sells its services to corporate customers on a flat, unmetered basis, more tenants would improve its addressable market. 

Another trend is that owners of buildings have been offering concessions, including lower rental rates, to retain their corporate tenants. “I think most companies are expecting to have employees in the office at least some of the time to collaborate among themselves,” said Schaeffer. “I think that’s going to lead to more meeting rooms, and it’s going to lead to the continuation of doored offices, but probably on a more shared basis.”

Finally, the pandemic is changing the VPN landscape.

As companies plan for their new work environment, Cogent is seeing an increased volume of quotes and installs of VPNs. “Our corporate growth rate has troughed at about …….


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