The Evolution of the Data Center Market & Data Center Services with Rich Miller

datacenterHawk

Interested in Hyperscale data centers? Sign up for our free hyperscale data center course: https://lp.datacenterhawk.com/hyperscale-business-development-fundamentals Or get a quick 15 minute demo of our platform: https://lp.datacenterhawk.com/overview?utm_source=youtube&utm_medium=youtube&utm_campaign=demo ––––– The Hyperscale and Enterprise Booms The hyperscale sector was just starting to take on a life of its own when Data Center Frontier was founded. Rich says one of their first pieces was 'The Rise of the Cloud Data Center’. The two key components to that story were 'scale' and 'edge'. Hyperscale players have been transformative, particularly because they allowed investors to understand data centers in a brand new way. Traditional real estate investors used to have a hard time getting into the old business model. But these days, hyperscale often presents single owner facilities with well respected tenants, all of whom have great credit histories and lots of assets. It is a much easier-to-understand proposal. The big investors bring not only the ability to take advantage of economies of scale, but they provide a kind of industrialization to the industry. Rich says that what happened in 2020 paralleled the kind of events that happened in the 2009 financial crisis. Cash became king. Enterprises became more careful with their spending, and large organizations had to make touch investment choices. 2020 was a 'wait and see' time for them, and a lot of projects got put on hold. But in 2021, the faucet was turned back on. With more certainty into the future of tech, enterprise projects started to move forward again. The data centers that relied on enterprise business started to boom. How the Data Center Services Market Has Changed Rich says that one of the most interesting things about the industry is that when he’s talking to less technical people, he no longer needs to describe what a data center is. People have an understanding of how they're connected to the Internet, and how data centers can impact their lives. During the pandemic, the entire world relied on data centers in a new way: Zoom, online learning, remote healthcare, and immense E-commerce. Public officials in communities and smaller localities suddenly understood the importance and value of these places. Carrier hotels were the centers of the old data center world. They were located next to the old Ma Bell facilities. But they tended to be in major population centers. Power and space were expensive. Thus, the shift into the suburbs in later years. More recently, carrier hotels are back in vogue. In fact, some investment companies just buy up carrier hotels, upgrade them, and remarket them. A lot more capital has been flowing into that space recently. What’s the Next Big Thing? When asked about the tech that will most contribute to the growth of the data center services industry, Rich immediately went to artificial intelligence. Bottom line benefits and providing business value are the key drivers to AI adoption. Those desirable outcomes won’t change any time soon. Really, AI is an infrastructure story. Given the plans Rich has heard about in recent virtual industry get togethers, some of the stuff in the AI hardware pipeline takes place at an unprecedented scale. So that's the biggest growth point to watch. AR and VR are coming along more slowly. But they're resource intensive as well. So that's the next one to watch, along with autonomous tech like vehicles. Digital transformation and infrastructure will need to cope with the changes as demand ramps up.