Not Your Father’s Data Center - The Ins and Outs of Financing Digital Infrastructure

Episode Date: February 15, 2021

Digital infrastructure is a common term in the data center industry, but it wasn’t always. So, how did the industry evolve to the notion that technology is infrastructure? It’s been a long journey, buoyed by investment. To talk about the financial aspect of data centers, host Raymond Hawkins spoke with Irtiaz Ahmad, Head of Global Data Center Banking at Barclays. Ahmed has spent the last 15 years focused on the industry as an advisor, investor and operator. Prior to Barclays, he spent time at CitiGroup and Waller Capital Partners, watching the world of technology accelerate and change.

Welcome to Not Your Father's Data Center podcast, brought to you by Compass Data Centers. We build for what's next. Now here's your host, Raymond Hawkins. Welcome to another edition of Not Your Father's Data Center. I am Raymond Hawkins, Chief Revenue Officer at Compass Data Centers, your host. Today, we are recording still as the planet is dealing with a pandemic, vaccines rolling out, but still the world is different than it was this time last year. And today we are joined by Barclays, head of Global Data Center Banking, Ertiaz Ahmad. And Ertiaz, I want to make sure I pronounce your name right. Ertiaz, welcome and thank you for joining

us. Hey, Raymond. It's a pleasure to be on your show, and you got that name spot on, so thanks for doing that. All right, I'm one for one. It's only downhill from here. Well done. Ertiaz, we're super grateful to have you talk with us. We have lots of folks that come talk about the technology side of our business, whether it's networking or cooling or how we handle technology in the data hall. For us, we'd love today for you to help us understand how does all this stuff get paid for. But before we get into how does all of this get financed and funded, we'd love to hear

a little bit about you. So with that open mic, love to hear where you're from, how you got in the business, where you went to school, who your baseball and football teams are, who you'll be pulling for on Super Bowl Sunday. You've got a chance to be on record now for your Super Bowl pick. It'll be in the can so we can know whether you're right or wrong. So you have the mic. Tell us a little bit about yourself. Sure, Raymond.

Happy to do that. So, you know, I went to school at Georgetown down in D.C., so I'll maybe start off with that. So when the stuff started to go down early in the year, you know, a couple of my buddies, you know, just started shooting me texts, you know, with the view that, hey, look, we thought college was crazy. This is just a whole nother craz. My personal background is that I've spent about 15 years focused on the broader digital infrastructure industry, both as an advisor as well as an investor, but also as an an operator uh and and i have some funny stories there to share uh i started off at bear stearns right before the financial crisis in their tech media telecom group uh summer of 2007 and then on to city group for a couple years and i was at a

firm called waller capital hold on hold on you Bear Stearns the summer of 07? I did. I did. That's some auspicious timing. I know. Exactly. You know, I've got a funny story for you. You know, there was a corporate event at Bear Stearns that they had, you know, one of those summer kind of holiday parties, you know, where it was a firm mandate for everybody to take a black car home individually, you know, from a boat cruise. Yeah, liabilities perspective. Yeah, it was just, you know, the full nine yards.

Yeah, you know, it's just incredible. So it was a bit of a fall from glory. To say things have changed quickly in Bear Stearns Fortunes. So I'm not going to remember the exact timing, but 08, 09, that business disappears, right? I mean, how long did that run? If you got there in summer of 07, you weren't 24 months from the business disappearing, were you? Well, I was gone. I was just there for the summer. The business disappeared in March of 2008. Yeah, that's what I thought.

By the time it came back around, I was already lining myself up. The semblance of normalcy started to break down, I'd say, even that summer, towards the tail end of that summer. You could hear some of the alarm bells start to go off. Fascinating. Yeah. So I ended up – So summer interns in 07 had to take black cars home to nine months later, the business is gone. Wow.

It's a whole nother world, right? You come back around for air and there's no caviar waiting at the end of your, you know, your night. Wow. Okay. So Bear Stearns in 07. Sorry, I'm slowing you down a little. Where next? No.

No. You know, Bear Stearns has a lot of fun stories. I'll tell you that. You know, I moved up to Citigroup in the New York office, you know, and of the times, 2008, 9, 10, 11, spent a lot of my time essentially cleaning up some of the mess that had been into trouble, you know, the likes of Clear Channel, Charter, you know, iHeart, you can talk about radio, you know, you know, cleaning up the messes of that and helping, you know, restructure those businesses, you know, clean up the balance sheets, start, you know, thinking about what's next for them in terms of creating value for those assets, you know, and I was there for about three years.

It was a lot of cleanup work, and I think I had my fill with it, which is why I wanted to do something a little bit different after that. You can only spend so much time doing cleaning up, restructuring type work. Yeah, understood. Yeah, all right. So you spend three years restructuring and cleanup at Citi, and then next stop is where? You know, next stop was to a firm called Waller Capital Parkers,

again in New York, you know, a merchant bank focused in the digital infrastructure industry. You know, it's funny. You use the words digital infrastructure, communications infrastructure, IT infrastructure. Back back then, you know, a decade plus ago, you know, we used to not use those terms as much, you know, and it was more, you know, it was a cable focused, broadband focused, you know, but we started to see, you know, right then and there some of the green shoots of, you know, fiber.

You know, I remember selling a bunch of businesses to Zayo when I was there. A couple of these fiber to home plays. Worked on a data center thing here and there. It started to pique my interest. Growing up, I'd always been interested in the internet. I was one of those kids that was on these bulletin boards and Usenets and basically an all-round, you know, totally cool kid in high school. Yeah, yeah, yeah. Definitely the kids that were on the bulletin boards in high school, everyone would hang out with.

Yeah, I know the group. I got you. Exactly, exactly. So I was there for about four years, you know, had a lovely time, you time, did a tremendous amount of activity. This is right after the recession, so the pickup in volume was pretty spectacular. A lot of this was growth-oriented. It wasn't so much of that cleaning up the dark messes of the yonder years. This was more, how do we think about onwards and upwards? So that was a lot of fun. And, you know, the funny story I said, you know, about being an operator, you know, you know, part of my time there for about, I don't know, like six to nine months, you know, I spent basically on a convent to a rural, you know, broadband company in Minnesota.

In the winter months of 2013. Oh, man. Yeah, exactly. Minnesota's lovely in January and February. I mean, highs and the negative digits. Funny story. This is like northern Minnesota as well. So I get off.

It's a long several-hour drive to the company. I get off, you know, it's a long several-hour drive, you know, to the company. You know, get off, get a rental car. And silly me, you know, I've never driven on ice before. So thinking the best thing I could do is get as big of a car, you know, I basically asked them for the biggest car I can get. They ended up giving me an Audi A8. I don't know why. It's not like I paid anything extra.

They did. And this thing is like a why. It's not like I paid anything extra. They did. And this thing is like a tank. It's so long. And if you've ever driven on snow, this thing is basically like skateboarding in snow. Snow and ice. My first trip

out was a harrowing experience. It was terrifying. But I made it. Ortiz, I got to tell you, so I worked for a company in Minneapolis for eight years, and that was their headquarters. And we would go every year in January and have our sales kickoff in Minneapolis in January. And for eight years, the high out of all eight years was minus one, was the warmest temperature it got. It's just a hearty people live in Minnesota. I'll just say it that way. Yeah. You know,

in your first time there and you talk to the team and the team says, what are you doing without gloves? You're going to lose all circulation in your fingers in the next two minutes, you know, and they're like counting down. They're like, you need to get inside now. Like you will not have fingers. I got another good Minnesota story. So, so I fly, I mean, I live in Atlanta. I fly up, uh, for my last interview with the organization. I fly up there at the end of April. Well, in the end of April in Atlanta, it's been warm for two months and I land in a, um, shorts and a golf shirt, uh, to head to my hotel to get dressed for the interview,

and it's snowing outside, which I just couldn't comprehend snow in April. So that's one of my aha Minnesota moments. And then my other one is just like you described, getting in and driving north. One of our kickoffs, they decided to do a team-building exercise. We went ice fishing. And, you know, my exposure to ice fishing was, you know, the grumpy old men, the movie and thinking, oh, that's cute. And it looks fun. So we pull up to this little shack on the side of a lake and you check in like you're almost like you're checking in for a motel. And it's like minus nine outside. And the guy comes up and he's

like, you know, counting everybody in the car and make sure everybody paid. And he goes, OK, he goes, hey, I need you all to roll all the windows down and then follow our guide car out to your shack on the ice. And I, of course, the guy from Atlanta said, hey, why are we rolling the windows down? It's minus nine outside. And he said, well, in case the vehicle goes through the ice, we don't want the windows to short so you can't swim back to the surface. And I said, you know, if there's a 1% chance we're going through the ice, I think I'm going to stay right here for the night. I don't need to go on out to the ice fishing hunt. I don't blame you.

Unbelievable stuff. All right, that's our Minnesota sidetrack. Sorry, everybody. But cold is the message. Great people, though. Really warm people. Really warm people. Very cold.

Very cold. So you help operate a business in Minnesota. Was it Fiber to the Home? What were you guys doing out there? It was Fiber to the Home. It was a small, you know, I wouldn't call it a startup, but, you know, they'd gotten some subsidies. And what I was basically helping them was to organize their financials, you know, think about what the strategy should be going forward, and basically think about bringing in new investors to kind of grow the business.

You know, and this was this is like 10 years ago at this point, close to it. And we'd started to see the need for the digital infrastructure, connectivity into people's homes. That's truly, you know, based on fiber instead of some mixture between coax or the old DSL lines because the traffic patterns right around that time were starting to pick up. This is when a lot of the apps started to really come out, 2010, 11, 12, a lot of these newer digital content platforms starting to kick up, streaming becoming more of a commonplace thing that people were doing. And yeah, I mean, it was just a really interesting time to be there, kind of leading the charge. It's a much bigger company now.

So is it still an ongoing concern today? You know, it's more today about how do you grow the business, you know, how do you expand, you know, it's cleaned up and it's ready to go and, you know, develop itself, you know, to be a much larger player, you know, in the region at this point. So, you know, all hunky-dory there. All right. So after you helped the operator in Minnesota, what's next up for you? You know, next up was, you know, coming back to New York and, you know, warming myself up, you know, losing the ice. Yeah, here, here.

Not much warmer. But, yeah, I ended up joining Barclays around that time, you know, around 2014. Again, focused, you know, primarily on the digital infrastructure space and digital infrastructure encompassing everything from data centers, cloud, you know, fiber, towers, small cells, DAS. We didn't really know or think about the word at that time, but these days it encompasses the word edge as well. And frankly, that's a really key part of it all. But yeah, that's my focus and I lead basically our coverage of data centers cloud and edge infrastructure uh banking across uh uh north america uh you know europe uh you know asia pac and africa you know we've got a pretty global coverage footprint uh you know around the world and just the nature of what i cover is just so global uh you know i find myself particularly in uh in the world that we live in with Zoom and WebEx and all the other platforms where, you know, it's very easy to lose track of your time, you know, basically on these platforms at all hours of the day. Hear, hear.

So that's me. All right. Well, we appreciate the intro. That is super good to hear a little bit. So I just want to wrap that up. So it sounds like you would consider New York home. Is that home base? You've been there a while now.

That's right. You know, I moved outside of the core city, outside of Manhattan a couple years ago. I live in Brooklyn, which is sometimes I walk around pre-COVID, and I feel like this is too cool, you know, for a guy like me. I don't quite have the, you know, the carpenters, you know, get up and like the very cool facial hair that a lot of the kids walk around. Yeah, yeah. No, I get it. Brooklyn's a hit place. I can only visit.

They wouldn't let me hang out there. Yeah, yeah. I feel that way sometimes, yeah. No, I get it. Brooklyn's a hit place. I can only visit. They wouldn't let me hang out there. Yeah, yeah. I feel that way sometimes too. And you talked about, right, it was a lot about cabling and broadband and those kinds of things. And I think you raise a great point that raises a larger issue anyway, is that how we got here, how we got to the world in a global pandemic, being able to stay connected, communicate, and effectively conduct business. We didn't get here overnight and we didn't get here by accident. And that infrastructure, kind of going all the way back to the late 80s and early 90s, that started getting laid for how we connect people's homes and people's businesses and connect the network. I mean, that's been going on for a while. And in your fiber of the home business and your early days, that was all the foundation for what we do today. Isn't that an accurate description, RTS, or how do you feel about all of that,

how it all came together? Well, Raymond, I think you actually might be a couple of decades off, but I think you're spot on. I would actually argue that you can actually trace it back to even the telecom routes, you know, that started, you know. Yeah, I think you're right. The early 1900s, right? Yeah, yeah. Here, here.

I think back to, like, you know, some of the, you know, transatlantic routes, you know, back, you know, when. Yeah, the first subsea cable. Yeah, you're absolutely right. That's right. That's the foundation. Yeah. That's the foundation. And it followed right through.

I mean, you go to a, you know, a telecom hub like 60 Hudson in New York or 118th, you know, or any of those sites around the U.S. and around the world that are truly like these epicenters of where the telecom providers start to interconnect. You know, that was then replicated, I don't know, 30, 40 years ago by the fiber providers, right? And then, you know, more recently over the last 10 to 15 years, you start to see those buildings or those physical hubs where these cable providers and fiber providers all start to intersect you know essentially be the you know the early uh uh formation of interconnection data centers right um you know uh as basically people start to say hey look if you're connecting wires here maybe why don't i store my data here you, that's probably going to be the best place for me to, you know, send that, you know, left and right, you know, and kind of moving that traffic around, right? I mean, look, I mean, a lot of these things, you know, just kind

of evolved organically, right? And this is pre-cloud, really, you know? Yeah, here, here. Wow. It's pre-AWS. Yeah, I do think when people think about what – like you just flat out said, hey, we didn't use the word digital infrastructure just a decade ago, right? Yeah. We were talking about cable and broadband. And, I mean, we were talking about wireless, but even then it was a much simpler solution and much less capable solution 11 years ago, 12 years ago. To me, just fascinating how I heard somebody say back in the summer that we've seen three years of digital transformation in three months and how the pandemic has just accelerated so many businesses going, hey, I don't necessarily have to walk in a building

and see all the people in my office to transact business. We can do this virtually. And how that infrastructure to support that has been being built for decades. And to your point, I mean, literally all the way back to if we go to the very first telecom connection, 100 years. But the other, I guess, how this ties back to Barclays and what we'd like to talk about is that doesn't happen on its own, right? That infrastructure investment, that capital comes from somewhere. And how does Barclays look at that? How does it analyze it?

How does it choose what businesses to be in? I think that's the fascinating part that most of us in the data center business, we look at, you talked about 60 Hudson or those kinds of assets that are CIRMAC that's legendary sort of building, but someone had to buy it, someone had to provide the capital, someone had to provide the capital to develop it. How does that part of the business side? We talk about interconnection and megawatts and absorption and leasing rates and Northern Virginia and the flap in Europe. We talk about all those things, but I don't think there's much conversation around how

does this all get funded, how does this all get financed? And we'd love your insight and expertise to share. How do the capital markets look at our business? How has it transformed in the 10 or 11 years you've been in it? And how do you see it changing moving forward? Yeah, no, it's an excellent question, Raven. You know, I think we need to go back a little bit in time to think about, you know, how it all kind of started, right? So, you know, data centers in particular, right, into what they

are today, didn't really quite start off, you know, from, you off from this technology-oriented infrastructure, as we kind of just already talked about. They started off back as a service, as a hosting service, essentially. Late 90s, for people who basically host a little bit of their websites in an outsourced uh environment right i mean that that's really what the outsourced data center world looked like thinking back to the days of exodus and you know uh uh you know the post you know exodus some of the other more hosting type environments right right you know those were those were at that time looked in as more

technology or technology services assets not so much much as, you know, these hardy, hard asset data centers or infrastructure categories. Right. You had a couple of these assets start to then, you know, take a little bit of a different flavor. You know, the likes of digital realty kind of spawning out, you know, around the world. I think about, you know, a client of ours, Global Switch starting to form, and those taking on more of a real estate vein. And then you had Equinix starting off more of its connectivity-centric thesis around, hey, I want to be in these core interconnection hubs and build a thesis around ecosystems and connected data.

So to answer your question, you really have to look back in time as to how they were all funded back then. Roughly speaking, I'll say there are a couple of categories about 10, 15 years ago. You basically looked at them as technology or you looked at them as real estate and and those are the two lens from an investor's perspective that that people came into it there's a third bucket that people looked at which was communications um you know and and that was more the likes of equinix uh and some of the other more connectivity oriented plays around the world it hadn't quite all converged you know a couple forces happened that led to that convergence. Around, I'd say, 10 years ago

when AWS and the cloud started to really come up, you had essentially an acceleration of the need to outsource. Enterprises, which typically have had their data centers in-house, started to figure out, well, you know, maybe the cloud's not so bad, you know, maybe I need to think about moving some of my data out there, or maybe it's to a outsource colo environment. And as that evolved, you had an environment where new providers started to come up.

These smaller platforms that were experiencing a tremendous amount of growth, both from enterprises, small and medium-sized businesses across the U.S. globally. And that led to a lot of private equity funds thinking, hey, look, data centers, nice asset class, growing really nicely. They've got three to five year type contracts. Still kind of a hodgepodge between folks looking at it from a technology, communications, or real estate type of investor mindset. But playing into that thesis from a traditional private equity investor. It started to evolve a little bit further about five years ago. And I think that's when the current iteration of at least equity investors, equity capital sits today, which is about five years ago. And I remember very clearly working with some of the infrastructure funds that were starting to evaluate this space around that time,

you know, there was a view that maybe this is not just tech. Maybe it's just not calm. Maybe it's not just real estate. Maybe it's like all three of those things plus a fourth category, infrastructure, right? We talked a little bit earlier, you know, dozens of years, 100 years even. You know, it takes a long time for some of these things to to build and curate and really today you know if you think about you know uh what what has really kept us going over the past you know 12 months so at this point almost it's really the it's not the highway it's not the ports right it's the fact that we've got these fiber gateways connecting us all that allows us to talk, do business, you know, see our family and friends. And really that infrastructure investor mindset started to take hold around the 2016 type of time frame. course of the last four years to a tremendous uptake in activity and an inflow of equity capital

to back expansions across multiple asset categories within the data center universe. All the way from, hey, here's a single tenant, triple net, more real estate, hard asset real estate type data center to, hey, more know, more of a hybrid managed hosting, managed services, you know, a retail co-location type data center. And then finally to the likes of more of a pure, you know, hyperscale, I'm going to do, you know, a 15-year type lease, lease you know to basically house an amazon data center and you know one site once you park your you know assets here you know i'm gonna walk away essentially on a uh a very light touch operational basis so all these different categories of models

led to a proliferation of equity capital from infrastructure funds pension funds sovereign wealth funds you know we raised um you know half a billion dollars a couple years ago from mubadala which is a a sovereign wealth fund based out of abu dhabi for a business here in the u.s called stone uh called co-logics on my stone peak um and i think it's very indicative of the type of capital that's now currently in the space. And you really have a diversity of equity investors today that you didn't have in the past. And I think it's appropriate. I think it allows multiple types of business models to operate efficiently. I think you've got the traditional private equity guys who are a little less involved, but they're looking at

international opportunities you've got the infrastructure funds who are looking at a lot of the uh um you know uh the hard asset longer term contracts and then finally you've got some of the the pensions and the sovereign wealth funds you know who are looking for you know more passive you know a steady state you know uhadjusted type of business profile. So that's that on the equity side. On the debt side, there's been a lot of evolution as well. It used to be primarily smaller operators or even for the large publics in the form of, hey, you've got one or two of these investment-grade data centers,

Digital Realty and Global, which were the two big ones uh and still are uh but you've got a couple more now um you know primarily funded with syndicated debt so banks like ourselves you know would go out and raise capital uh you know from from institutional investors the likes of fidelity and blackrock and others. We've put some on our own balance sheet and lend that out. It's evolved a little bit in the last few years to a new category of funding, particularly the hard asset, longer-term tenor contract data centers, which is the advent of securitizations.

Securitizations used to be at play more so in the tower space 10, 15 years ago. But over the last three, four years, we've been able to manifest that more into the data center space. And what that's really allowed is to allow an incredibly robust leverage profile with a very, very attractive, low single-digit cost of capital, investment-grade rating, which gives a lot of fuel to the operators that are able to put that structure in to go expand broadly as well as be able to be competitive with their lease pricing and then ultimately drive home returns that are appealing to the shareholders. So long-winded answer, but the industry has gone through, you know, quite a few pieces of evolution here to get to where we are.

So hopefully, I don't know if that answered your question or not. No, that was super good. I'm going to add a few more sort of clarifying, but that was excellent. Love getting both the equity and the debt side and also the historical perspective. community have managed to stay connected, not because of the traditional infrastructure plays. I think it is highlighted that technology is indeed infrastructure, right? I mean, because to your point, we're not getting on boats. We're not getting on trains. We're not flying anywhere. We're doing very little driving on the highway. So all the traditional, or not all, but many of the traditional infrastructure assets, airports, seaports, and those kinds of things are limited in activity, certainly from moving people back and forth.

And so we stayed connected through the infrastructure of the 21st century, this, hey, now as infrastructure funds think about investing, that this just galvanizes the notion that, yes, digital infrastructure is global infrastructure. if not more important, a connecting function to mankind that a port or a railway or a highway would serve. I think that the way you describe it has crystallized that for me. We are in the infrastructure business, and it has allowed us to stay connected the last year. No, that's absolutely right. And look, we talked a little bit about the private investors, right, with data equity. But what's worth noting as well is that on the public side, right, you know, it's very clear the public investor appreciates the logic of what you just said, Raymond, which is that, look, you know, yes, the cloud is very attractive. Yes, there's a lot of incredibly high-growth software-type plays that have experienced large run-up in their share prices. Last year, through the COVID crisis, people realized, well, look, what do you need to stay connected? You need Zoom.

What do you need to work out? You need Peloton, you know, but you need to house the the gears that function that make all these things fuel. Right. You know, in like a physical box somewhere, you still need to house it somewhere. And that obviously had a big impact on the data center stocks, you know, over the course of 2020. And I'd say, you know, before, I'd say, you know, in the last few years, there's been a growing appreciation amongst the public investor base as to the value of data centers. But, you know, given a lot of these were more REIT oriented, it was more from a, hey, look, I'm an investor that invests into multifamily homes, into hospital real estate, into shopping malls,

and hey, guess what? Data centers are a little bit higher growth than all of us, so this is how I'd allocate it. That was kind of the overarching thesis. Yeah, sort of I'm already a real estate investor, and this is another part of my real estate portfolio, more that than, yeah, I want to be in the digital infrastructure business. Yeah, I think that's a good point. Absolutely. Exactly right, Raymond. That's exactly right. And that started to change a little bit with, you know, more mainstream

appreciation of data centers, you know, over the last, you know, I'd say 12 to i think it started a little bit before uh you know coveted you know to be honest but i think during covet it really caught on you know and one of the you know one of the easy ways to kind of see that is you know uh there's been a lot more you know etfs that have been created to track the data center space. You know, just generally speaking, you know, it's not just the institutional investors that you see, you know, talking about it, you know, in the public realm. You know, when we see press reports about, you know, data centers now, you know, it's also coming a little bit more mainstream now to, you know, the folks who understand, well, look, you know, data centers are, data centers are a key asset class.

As I think about, well, I want to invest in high-growth software, high-growth cloud, gaming, and data centers as well. The next one, which is starting to pick up, and I mentioned it earlier, is around the edge. That's the new kind of buzzy word that's starting to get some mainstream traction now. Yeah, it's interesting, Ertiaz. I get occasionally asked what we do by friends that aren't in this business and try to explain the business. And at the end of the day, you touched on earlier, we're just in the warehouse business.

But we warehouse ones and zeros. I mean, there are warehouses that carry food and cars and other goods. We're in the warehouse business, but we just warehouse data. And I'm grateful that I'm in an industry that the goods that we store are doubling every year. And that's an exciting place to be. And I think that it's only accelerating. Digitization only continues to expand. And getting to be in a business that has to provide a home for that is a great place to be. I think it's about a pure bullish play as you can get on.

Are you bullish on digital transformation? Are you bullish on technology continuing to grow, which I am. And you're starting down another path with the edge, right? I mean, clearly the edge as 5G becomes a real thing and the amount of bandwidth that we can get out into an individual's hand, it's going to change what we do there, right? And we're going to have to move where compute goes, right? We've 30 years in the compute business. We've moved compute around, right? We've consolidated compute. You talked about service bureaus and people that you got services from two or three decades ago, and then we distribute the compute out to individual enterprises, and then we pull

it back in, and then we push it back out. I think the edge is another transformation of distributing compute out to where that bandwidth and that demand and that user is going to be. And it's going to transform the infrastructure business, but transform it only in the number of locations of warehouses. The data proliferation is going to continue. That's right, Raymond. That's right. And I think it's going to be really interesting over the next few years as we start to figure out what is the edge. You know, what does it mean?

Just similar to how about a decade ago, you know, we had that discovery process with the cloud, right? It's what is the cloud? How does the cloud work? And then perhaps the most important thing, what can we do with the cloud, right? And it's similar to how we saw, you know, kids in their parents' basements or in their dorm how the use cases for the edge start to emerge in the next few years as we kind of go down the road of 5G becoming more mainstream and having some of the platforms ready to go to support those applications.

Yeah, I for one, Ortiz, I'm excited to see things that neither you or I can think about today that are going to be a thing. You know, when my children who are in their 20s ask me, Dad, you know, when they were middle-aged, adolescents, they would say, Dad, at what age can I have a cell phone? And their ask was that, Dad, what age did you get a cell phone? And I told them, oh, I got a cell phone at 21. And they're like, oh, your parents must have been horrible. And I'm like, no, sweetheart, that's when cell phones actually became, you know, available to the public. Dad was already in his 20s. They can't even imagine a world where there wasn't cell phones. And I think that the things they're going to see and the things that they're going to, their, you know, TikTok. I mean, let's go back seven or eight years

ago. Did anybody think that there'd be an app where we watched eight second or 10 second videos of each other? Just take over the world from a entertainment perspective. I mean, YouTube, I mean, there's so many applications that, you know, I'm laughing about not getting a cell phone to my twenties. I think there's going to be things done that are going to change the technology experience and change what we do and change how we view technology and where we consume technology that we can't even think of today, powered by this distribution of compute power in the edge of what you're talking about. It's thought on.

And, you know, I like to think of data centers, you know, you use the word warehouses. I like to think of data centers as essentially data factories. They're the factories of, you know factories of our current world. Here, the plant and equipment of the data infrastructure world, that's a great way. That's better than warehouse. That's better. I just don't. You know, in my mind, because you're not just warehousing the data, you're also processing

it, right? Yeah. And then shipping out the goods, right? So, RTS, there's nothing better than having your mind changed. I've used the warehouse analogy for several years, and you're the first person that said, Raymond, it's not warehouse. It's really manufacturing, and that's better. I think plant and equipment are manufacturing because you're right. Stuff gets processed.

Stuff gets changed. Stuff gets modified. We're not just a passive. The digital infrastructure business, the data center business, it isn't. That's a better way to think about it. I like that. So I like having my mind changed. Good stuff.

Yeah. It takes guys from Georgetown to do that. Guys with economics degrees. I can only read books about economics. I can't get my arms around it. You know, I think it's probably the 10,000 hours of Zoom calls that we've had over the past 12 months. I don't know if I can even lay credit to it. It may have been somebody who I was speaking with, you know, somewhere around the world.

Who knows? Like, you know, they coined it and it just stuck in my head. Yeah, yeah. No, it's good. I like it. I like the whole factory or plant equipment part. That's really good. Ortiz, really grateful to have you join us. I appreciate you spending a little time with us. I will tell you, once the listeners get to know people, I'd love to have people come back.

I can think of two other subjects that we could have entirely different calls on. If you're willing to entertain joining us in the future, I would love for you to talk about SPACs. They get a lot of publicity today, whatever Barclays is willing to let you talk about. I think for me personally, that would be a fascinating subject, how we wind it back into the data center business. I'm not sure.

And then I would definitely, with a friend of mine having a degree in economics, I'd love to have the Keynesian versus the Austrian economics conversation. And we could do a series of podcasts on that. So things to think about for future dates with us if you're willing to join us again. More than happy to, Raymond. And thanks for having me on.

You know, to be honest, I thought you were going to ask me about SPACs on this particular one. So I did prep a little bit for that one. But, you know, we can save it for the next session. There you have it. I think in the business they call those teasers. Listen again in the future as the Barclays head of global data centers explains SPACs. You can't miss that one. So, RTS, thanks, bud, for joining us.

I appreciate it.