 Welcome to JSA TV and JSA podcasts, the newsroom for telecom and data center professionals. I'm Jormak Slim and joining me today is Derek Webster, CEO and owner of data center advisory and consulting firm ANGET. Derek, welcome to JSA and how things we do, we haven't spoken in a while. Well, these are very interesting times and the market is moving in slightly different ways and yeah COVID has had its impact and I think the data center world and the ICT world is up for a little bit more love and appreciation now. So a silver lining from a terrible, terrible situation. Well, we do got a look at the positives of this nightmare and I guess one of them is critical infrastructure data centers being recognized as critical infrastructure. But one thing that has also changed a lot and I don't know if COVID has had that much impact on that or not because this was already kind of happening before COVID is the investor profile within the data center space. I guess in the old days it was much more concentrated around the big hyperscalars and collocation operators. But now we are seeing it's private equity, it's hedge funds, it's funds of funds, it's a whole different monopoly of investors and people coming into this sector. How is the data center investor profile changing today? Yes, I mean it's a very, very good opener there. I mean at the moment if you look at data center spend for product it's now roughly 50-50 split between the hyperscalars buying 50% of everything, cloud, co-collo, telco and enterprise the other 50%. But behind that you're seeing private equity come and is that wouldn't normally be in the data center space now approaching the market. I think part of the reason for that is the traditional sectors, if you look at the investment sector as a pie, the data center sector was always a small slice of that pie but existing well-founded sectors aren't producing the traditional returns now. So private equity companies and the like are looking for what sectors are doing well. So the data center sector since the dot-com crash has now built up quite a good track record as being attractive. Hotels pre-COVID and senior living for example have all shown to be small slices of those pies returning big investment. So there is a drive for these funds to get more out of the stock that they hold and the track record that the data center industry is beginning to show. And even with the hyperscalars now you are now seeing them being seen as foreign direct investors. So private equity may be coming into play, family office, mergers and acquisitions, even debt funders now are beginning to look at the data center space as in a real estate land buy to shell and core build. Now we're going back to the dot-com boom times where banks would lend but stopping at the most expensive part the fitting out works. So that's very much a change. I'm also seeing special purpose vehicles approaching myself looking at where's the value add here because everybody's got a piece of land that is great right. That could be a data center space and it ends up being a real estate play until you look into where the value proposition is and you look at no it's an investment proposition it's not a real estate proposition. So yes those are the changes that I've seen in answer to your question. No I mean I think what you say is very interesting especially the different vehicles of acquisition and investment and I mean this is a sector at the end of the day it's trading with a with an editor of 20, 25, 30 time multiples which is massive especially when you compare it to other the verticals and then especially with COVID then when you start comparing it to other wider verticals then I guess the difference will be even more. And then I think the land acquisition real estate aspect of it as well that's very interesting because you do see the strength of a lot of acquisitions now of just pieces of land not even businesses but just pieces of land to really get that real estate to be able to build for demand in the next decade and beyond and then a whole different conversation will be what technologies are coming that's going to disrupt the whole thing and that we're not going to actually need to build massive facilities and then all this land will go but we'll talk about that in five years time. But carrying on with the the the investor conversation but Derek you are of course very involved with the industry on a lot of different fronts especially invest in front give us a sense of what you and and get and get are up to at the moment and where the focus is for the next year or so in terms of your work. Okay so I'm not going to say who I'm working with or what I'm working on now. So there's a lot of NDA's. Yeah yeah and some are really heavy too like they'll take your house away but which you never really sign those but you get the message all they're they're very very heavy but in terms of what have recently been worked on let's have a look at that. So one fascinating project was a very large global enterprise who were looking at their 15 year data center strategy and their board had to agree to a 15 year strategy and part of the task that I had was is this buy build or lease buy build lease and they showed me their data they showed me their iot data their power usage their information number crunching data and I was staggered because my advice to them was very fast you're you're going to be web scale in five years by 2020 standards so you're a global enterprise that will be building web scale therefore my advice is to build is to collow for the networks build your own and what it showed was perhaps a new class of customer a new class of data center segment which is the global enterprise company who will be building at such scale that they'll be building for themselves so that was absolutely fascinating also special purpose vehicles looking at I have a great piece of land so I'm doing a lot of value prop propositions with special purpose vehicles to have they really got something that has a value against thousands that could be have been doing some countryside search selection for foreign direct investors who like that undercover you know keep the client hidden myself being that front that front end and also advising boards and private equity funds too so yes I have been advising private equity companies on what's in the investments they should be looking at and advising them on what targets they are looking at just giving them some advice so that's what's just gone in terms of the future I think probably more more more the same with an added more green element and looking at the data center industry as a real estate deal a digital infrastructure and a power deal and where the M&A and the set off is okay well you leave me with a lot of questions that I know I won't get an answer for I mean I think it's no surprise to anyone that the sector is going to continue to see this massive consolidation wave and the tremendous amount of cash being poured into it as the world just becomes digital really I mean it's as simple as that really we all live on the digital planet at the moment so and Derek if people want to get to know more if they want to reach out to you how can they find out more um LinkedIn's a really good start it doesn't show everything that we've done for confidentiality but I just hope it gives a flavor so I would just advise people to look us up on the LinkedIn okay this sounds good well Derek I could carry on talking to you for ages because every time we talk there's always a lot of good insight coming out and a lot of new things I always learn um but I think we're going to have to keep that for part two at some point um but thank you so much for accepting the invitation to come on on the show um and thank you our viewers as well for tuning into JSA TV and JSA podcasts and don't forget to check out social media channels for more content until next time happy networking