 Live from the JSA Podcast Studio, presenting Data Movers, showcasing the leaders behind the headlines in the telecom and data center infrastructure industry. Welcome to our new podcast series, Data Movers. I'm Jamie Scott-Okatayu, your host and founder and CEO of JSA. And my co-host, Mr. Evan Christel, top B2B social media influencer. Yeah, hi, good to see you and welcome everyone to Data Movers where we sit down with the top movers and shakers in today's telco and data center world supporting the network infrastructure requirements of this new normal. Jamie, how are you? Great, Evan, thank you. It's been quite the start of the holiday seasons. Definitely not the same, but making it work. How about you? Yeah, it's definitely different. So we managed to get through Thanksgiving and now we have that run up to Christmas, which is always a busy time, shopping and the like. So are you fully online shopping or do you actually go into stores or retailers or little boutiques, that kind of thing? I'm not in the stores anymore, but I will tell you, I'm online and it's usually middle of the night, which is dangerous shopping time actually because I'll wake up and be like, I forgot my nanny, you know, and then go and start ordering things off of Amazon. And then a few days later, I'm like, what was this? What did I order? Yeah, we're all suffering from that. And just looking at the data, it's really phenomenal. I mean, this is the biggest e-commerce surge in history, in the history of the internet. So it's pretty shocking to see the numbers from the likes of Amazon and others. Yeah, I mean, Amazon is literally becoming like Santa Claus, being able to deliver anywhere in the world in like one night's time with Prime, you know? I even saw that Santa is now moving to Zoom. So, you know, this is gonna be a rather different holiday experience. Yeah, I'm looking forward to my little daughter knowing who Santa is and being excited about like the story, you know? But why don't we dive into our guest? Yeah, I'm so excited about our guest today. He is absolutely one of the main headliners recently with some major acquisitions in the news. So let's get right to it. I should also say he is the poster CEO of navigating these crazy times and really keeping corporate culture alive and well, even in this new virtual reality that we're living in. So let's get right to it. Today we welcome Raul Matinek, CEO of Data Bank. Raul, thank you for joining us. Thanks, Jamie, and thanks, Evan. Thanks for having me. Yeah, welcome, Raul. And first question, Data Bank, are you a bank? No, we're not. In a way we are, right? Because I actually really like the name because data is obviously a very valuable commodity and Data Bank, we store data obviously in our data center. So in a way, you know, we're a bank for digital assets, right, as opposed to monetary assets. Love it. Well, I was gonna ask you what my interest rate might be, but in all seriousness, you guys have had a pretty fascinating year. It's been tumultuous for all of us, but you've not only survived, but you're thriving through this, you know, difficult time. Tell us more. Yeah, sure. So just really briefly, I mean, Data Banks, the company's been around 15 years and started with a single data center in the building I'm here talking from in downtown Dallas and then over the course of obviously 15 years has grown to now be over 60 data centers in 29 markets, 25 in the US and four in Europe. You know, the business started like a lot of businesses, kind of family owned. I got introduced to the company in 2016 when it did kind of secured its first, you know, professional money, first private equity money. And they had grown the business from the single data center here to six data centers in three markets. And when I joined, I joined as part of, as a senior advisor for Digital Colony, which is an investor that's investing heavily in this space. And we've been able to, you know, put a significant amount of capital behind our growth story. So again, we've gone from the six data centers in nine markets and with our most recent acquisition with C. Colo, you know, 60 data centers in 29 markets. So it's been quite a whirlwind over the last three and a half years. You guys have been certainly headlines to follow recently with all of these fabulous acquisitions. And certainly the time is right that Demand for Data Center Services has been mushrooming. So tell us, what do you think is responsible for this increase? Yeah, so look, on a macro perspective, and this is something that, you know, obviously we consume a lot of capital. So we have a lot of capital partners, right? And these are, you know, pension funds, sovereign wealth funds, insurance companies, you know, very long-term capital. And ultimately, when we tell the story to them, what we simply say is, look, what's going on right now is, you know, that we are in a multi-decade trend towards the adoption of technology to kind of, you know, enhance and replace almost every activity on this planet. And that ultimately, that technology, which manifests itself, of course, on, you know, on the internet, you know, requires, you know, four physical pieces of infrastructure, right? As you know, you have mobile devices, you need cell towers or small cells, as they're called. It's got to terminate on fiber, and then it's got to go back to a data center. So ultimately, what we believe from a very high-level perspective that that's what this macro trend is happening. And ultimately, you know, you look around and how, you know, consumers and businesses are leveraging technology as they leverage more technology it means that they need to consume more cell towers, more fiber and more data centers. So we are smack dab in the middle of that trend and, you know, it's hard to tell when that's gonna end. Indeed, hard to tell. We're in this M&A free for all, even this week with Salesforce acquiring Slack, you know, pretty much a blockbuster and the year's not even over. But in our space and data center, tell me about the acquisition of Z-Colo, your investment in Edge Presence and how that changes your playing field. Sure, sure. So look, with Data Bank, you know, we were obviously a national player, but you know, from a scale perspective, we were still kind of relatively, you know, medium-sized 20 data centers, nine markets. You know, obviously the big word today is the edge, right? And the edge is something that's happening. And when we looked at that trend, what we felt is that, you know, we needed to have more geography to be a more impactful player in that space, right? So Z-Colo and building, you know, data centers on a greenfield basis, that was, you know, one of the lessons from the dot-com bubble, right? Which is planting, you know, 30 flags and 30 markets is probably a recipe towards bankruptcy, right? And ultimately we look at M&A as a way to, you know, deepen our capability in a given market or expand to a new market because that way you have market knowledge, you already have existing customers, you have a presence, and that's super important to be successful long-term. So the Z-Colo asset, you know, really checked a bunch of boxes for us. Number one, it gave us, you know, great geographic reach over across, not only tier two markets where data bank had been strong, but tier one markets. And then number two, it gave us a set of interconnect assets that were inherent in that platform as a function of it being part of ZEO networks. Obviously one of the largest fiber companies in the world that also kind of gave us an interconnect profile to kind of match up with that geography. So we felt that, you know, that deal really moved the needle for us in terms of being able to be, you know, a meaningful partner for, you know, the most important players that are evolving the edge today, you know, the hyperscalers and other technology companies. And then edge presence was a very different deal, right? It was, you know, obviously much smaller, you know, it was a $30 million strategic investment. And ultimately that's a very nascent idea, right? This idea around modular data centers. But we felt that, you know, that capability is complimentary to traditional data centers and not a substitute for traditional data centers. But we wanted to have that kind of tool in our toolbox because we think that, you know, part of the edge is going to be kind of a need for very distributed infrastructure in very, very specific geographies. And you can't build a $50 million data center everywhere. You're going to need to place smaller data centers in a lot more places. And this gives us or gives us the form factor to be able to address those use cases. Yeah, it sounds like your customers are going to be excited about these moves. What have you seen from them and heard from them through the pandemic in terms of their behavior and requirements? Yeah, so, you know, with the Z-Cola transaction, we have over 3,000 customers, you know, so it's a broad swath of corporate America. You know, I look at our customer base among three buckets, right? Bucket one is kind of these interconnect locations and interconnect players, right? Obviously, no secret that there's a lot of connectivity required in data centers. So you end up with a lot of customers in the carrier or telecom bucket, right? So that's one class. You know, class number two on the other extreme is, you know, just a large enterprise. Obviously, any business in America, as we just talked about in terms of using technology, has to have a meaningful data center present or meaningful infrastructure present. So, you know, that's a wide range of businesses from healthcare to financial, the manufacturing to services, you know, to automotive. Again, you know, a little broad cross-section of the economy. And then the last bucket that we look at is really the one that's driving this whole thing is cloud content technology, right? Everyone knows about the big four or five cloud players, but ultimately, as I like to say, there's a long tail of kind of SaaS and specialized cloud platforms that underpin our modern economy and that are either consumed on devices or our PCs or our inputs to some of those other products and services. And what do they all have in common? You know, they use a lot of silicone, AKA servers and storage, right? And they use co-location as their fundamental, you know, foundation for delivering their product, right? And that segment is the one that obviously is growing the fastest, right? Because we're in this massive, you know, transition between, you know, a kind of, you know, a pre-information services economy to a full information services economy to a digital economy. And that's, these are the players that you just mentioned, Slack, you know, from a collaboration perspective, obviously Salesforce from a, you know, Salesforce automation perspective. I mean, the list goes on and on to consumer apps, like of course, all the social medias. I mean, all these products, they live in public cloud or they live in co-location. And remember, public cloud is co-location, right? And ultimately these large public cloud providers, they build a lot of their own capacity, but they can't keep up. So they outsource a huge amount and our industry is the big supplier to that. I love that. I love that. Co-location as your own business service. I love that. And you're also a phenomenal example, not just in acquisitions, but in integration. So with all the growth this year, especially Raul, how did you bring your team and the new teams that you've brought into the fold together as a culture? Yeah, that's a great question. And you know, it's something that, you know, throughout my career, I've had to face because I was in telecom for about 15 years through the dot com bubble and the post dot com bubble, which I affectionately call the Batan Death March because ultimately you had to just survive on your own will or you just face planted and became bankrupt. But we ended up doing a lot of M&A during that period. And now obviously, as Evan pointed out, there's a lot of M&A happening in our sector. So what that taught me was trying that you can't just bring these organizations together and expect that people are gonna be able to understand themselves and ultimately companies are human and that there's different human experiences and different human traits. And you have to accelerate that. So we started doing that. When I got the data bank, we had just completed about three acquisitions, C7 edge hosting and 365 data centers. And then we had the legacy data bank business. So four different cultures. And you know, worked with someone that I actually worked with in the past. I was a consultant at the time that now actually runs our marketing and culture here at data bank. And we went through a year process to really understand who we were as a company and to define our kind of cultural essence and to distill them into what we call our cultural cornerstones and our leadership behaviors. And then ultimately it was a set of kind of statements that said, this is the way we're gonna treat each other. And this is the way we're going to approach business. And people have to buy into that or you're just not gonna be able to be on the bus long-term. And you know, like anything like that, it's painful because you know, some people can make that journey, some people can't. But ultimately when we got out of that at the kind of beginning of 2020, so we did it all through 2019 and we got out at the beginning of 2020, it really allowed us to have a cohesive culture and a cohesive kind of nomenclature around what we wanted to be as a company. And that has really helped us in this pandemic, right? And we've been able to have this kind of common identity that would have been really hard to do without this purposeful project. What I used to do years ago, I would get there but I would try to get there in an organic way. And now what we learned is that there's ways to accelerate that by making it a focus. And it's been really beneficial, especially in these times. Yeah, that's fascinating. We understand you created a sort of virtual town hall called the Vault Platform that helps with integration and team building and recognition and shout outs. Is this sort of like Minecraft for the office? Yeah, you know, I mean, it's, you know, the term within the industry is employee engagement, right? I mean, that's what they like. It's a SaaS platform. It's basically our digital town hall. It's a place where all our employees can meet. And that's where we share all information about what's going on in the business, obviously, you know, through blog posts. It's where, you know, people can get information about all these cultural traits and what that means. And then, yes, it has a reward and recognition component. But what's different about that is completely tied to these leadership behaviors and cultural cornerstones, right? So, you know, one of them is, you know, put people first, which again, there's a whole very basic stuff, but there's a whole kind of background behind that. And then that way when someone in the company does something that, you know, helps out a colleague in a different part of the company or helps out a customer and someone did something exceptional, we can recognize that, point it out, point it to that leadership behavior or cultural cornerstone and say, what this person did exemplifies our culture, right? And then we also, you know, that allows us to nominate people on a quarterly basis who, you know, we call it the Data Bank Way Award. And it gives them, you know, again, a way to highlight real positive behavior that not just instills a good working environment here at Data Bank, but obviously puts our customers first, right? I mean, ultimately, we are a service business and it means, you know, we have 3,000 customers as they manage. You know, we take 10,000 trouble tickets or inbound requests from customers every month. And if you want to create excellence in each of those engagements, you have to have a workforce and now with Zicolo we're 700 people, you have to have a workforce that comes in every day and says, I know why I'm doing what I'm doing here. I'm making a difference for our customers, for the product that we offer and here's some, you know, emotional reward around that. And there's a monetary element to it as well because everyone always likes gift cards and things like that. But ultimately, I think the emotional component is much more powerful because it gives people a sense of mission and a sense of purpose in terms of what they do for, you know, a large part of their day. And talking about those incentives, we also heard a little bit about your Key Mastering Game Show, which sounds fun, tell us a bit more about that. Yeah, that was completely spontaneous. You know, it's great. Again, the best thing about, I would call that cultural innovation, right? Which is just create the conditions for things to happen that you can't plan. And that was a perfect example of that. And it's a gentleman that has an incredible sense of humor and it's a trivia show, right? And basically we mix in some industry trivia, we mix in some data bank, you know, trivia and then just, you know, good old fashioned regular trivia events on sports and movies and music. And he narrates it with a partner and then we, it's a competition. So, you know, the winner of each event then, and then there's a, you know, the playoffs and then there's a final and then there's someone that becomes the winner. And, you know, we did it and, you know, we'd have, you know, 50, 60% of the company joining, you know, five o'clock to watch this and talk about a great way to get people, you know, reconnected virtually at least around something to create a little bit of a water cooler type of dynamic in a world where you can't have a water cooler anymore, right? And so anyway, it's been really, it's been really fun. They're going to prepare season two. And, you know, hopefully that will, you know, allow other people to come up with their own ideas over, you know, what we can do to, again, you know, remind people of, you know, what our purpose is as a company, how important our customers are and what we do for our customers. And then also, you know, create a fun environment, you know, where again, you know, we work hard and you want to have a fun time doing that. I found out just a couple of weeks ago in our JSA virtual strategy session, we have a lot of trivia folks here at JSA. So, here you go. You just need to have an MC. We're going to, we'll take you on, Raul. Data bank, you know, you let us know. Gauntlet thrown. Yeah, I may need to crash the party. My social life is about a zero at the moment. So it sounds fun. So switching tracks to industry trends, you, Raul, clearly have a bird's eye view of what's happening in the industry in this move to a decentralized model as data centers get closer to the edge. What's your take on the timing of this massive shift to edge computing? Yeah, yeah. And listen, I love that you use that word decentralized because ultimately that's what it means to us, right? So again, you know, stepping back, right? 20 years ago when kind of the commercial internet was created, I was in Manhattan at the time. And I always, I like to remind, I think it was funny, right? Every office you went into had a data center, right? It was called the computer room, the computer room or the computer closet or they actually, you know, even a Manhattan skyscraper as you'd walk into an office and they'd have, you know, 2000 square feet of white floor in a Manhattan skyscraper, right? So ultimately, think about that. That was only 20, 25 years ago. And what's happened obviously over the last, this period, this cloud age is that a lot of that infrastructure has migrated out of those offices and out of homes and it's gone to a smaller number of locations that are either multi-party, multi-tenant, excuse me, data center locations like data bank runs or public cloud, right? Which are basically single tenant data centers owned by or managed by a single company. And now I do believe that the pendulum's swinging back, right? And that ultimately what's gonna happen is we're still gonna have all that kind of centralized infrastructure but there's gonna be a lot more reasons for that infrastructure to be placed in other locations. And that's to me the edge, right? And it's gonna take many forms because the edge is different depending on who you are, right? The edge, there's a cloud edge or a hyperscale cloud edge which is one version of the edge, right? There's a wireless edge and with 5G of course, you know, mobile edge computing there's gonna be a wireless edge there. There's a terrestrial fiber edge, right? Where all this fiber runs around and where its nexus are from a long haul perspective and a metro perspective, there's gonna be edge locations there. And there'll be other edges to four different types of things. And so I think that that's the world we're going back to and that's again why we did the Z-Colo transaction to put ourselves into more of these markets that I think are going to be quote unquote edge markets. And then number two would edge presence to give us a solution for very geographically specific locations because I think what we've learned from 20 years ago is 20 years ago, you go into the office and the people have the server like in the water closet, you know, by the broom mouth because it was cheap and people just almost looked at IT as an expense, right? Now IT is everything, technology is everything. It is your competitive capability to operate in this marketplace. So you can't afford to have this infrastructure in a location where it's not gonna survive 24 by seven, 365, 100% of the time. And that's why you need data center enclosures because ultimately what a data center does is exactly that, right? It protects that infrastructure so that it can have power and cooling and connectivity and access and security and the compliance, and meet all those things, but in a smaller footprint. So we see those two trends emerging and I think from a timing perspective, I think it's happening right now, right? I mean, I think you can argue that there's a lot of new workloads that are showing up and I'm just talking about our industry, right? Because one of the funny things, if you go listen to the CEO of NVIDIA, Wang, his keynote speech last year, he must have used the word edge 50 times. That's NVIDIA and you're like, wait a minute, that's a GPU, what do they have to do with the edge? Well, for them, the edge means, hey, their systems are so complicated and so expensive and so big that you can't put them everywhere so they've shrunk it down. So now that kind of machine learning and AI can happen in a lot of other different places, right? So that's their edge, right? So ultimately I think it's happening today. I think it's happening certainly on the hyperscale side, it's happening in a major way and I think the mobile edge will really start to emerge around 5G, which is still kind of year one. I would say year one of probably a five year type of deployment cycle to get to what we call standalone 5G type of networks and capabilities. So I think it's happening today and I think it's gonna happen over the next three to five years. Yeah, yeah, I love that. Today it's the competitive edge, but with 5G and moving forward, it'll be not only the mobile edge, but the ubiquitous edge. Everyone will be utilizing the edge whether they realize it or not. That's correct. Circling back, I love to rewind the clock that 20 years ago, Raul Matinek in Manhattan when we first met, knowing what you know now, if you could go back in time and give one piece of advice to your former younger self, what would it be? That's a great question and I think it would be don't lose faith. In what's happening here, right? I mean, it's crazy to think that after the .com bust, Amazon stock was under a dollar. And what happened as we know is this sector has gone through some booms and busts and that ultimately when that bust happens, people lose faith, right? And I do think the .com bubble was a quote unquote near death experience for the space and that ultimately, we shouldn't have lost faith that it was gonna happen. It was ahead of its time, right? All the business ideas that were created in 95 to 2000, they're happening today and they're the trillion dollar companies of today. So there was nothing wrong with the way people thought about the future. It was just that the future takes longer to be realized and ultimately, I think having that kind of long-term faith in the sector gives you the patience to be able to stick through periods where there's gonna be some dry spells, right? Ultimately, if you look at this thing as a graph, it's up into the right, but if you zoom in, it's probably a stair function, right? Where you have these periods of very quick adoption followed by absorption and then things like, and then some declines too. So ultimately, I think that would be the advice I'd give myself. Well, good advice. And I think most people younger than us, perhaps don't remember that dot com bust. So it's an industry that's dominated by mostly sort of middle-aged types like ourselves, Raoul, Jamie excluded, but how do we as an industry attract this younger generation to join in the opportunity and the fund and what are you doing, maybe a data bank to kind of recruit and engage a younger generation of workers? That's a great point, Evan, and absolutely. And I think the future obviously belongs to the young, right? So we should remember that. And ultimately, there's some really interesting differences in terms of how younger people who haven't been exposed to all that thing that we've just been talking about approach problems and then kind of what kind of folks that have been in the space for a couple of decades, right? And really, it's the future. Again, this is not anything revolutionary, but I think it's much more a software-centric view of the world. I think that the younger generation has grown up in software, grown up gaming, grown up using apps, and they look at software as a way to solve problems first. Well, I think the previous generation, myself included, looked at kind of building things to solve problems as opposed to using software to solve problems. So I think, you know, Mark Andreessen, and again, it's amazing. It's an article that was, it's almost 10 years old at this point, and it was so prescient in its time and it continues to be a valid today, right? He wrote an article in the Wall Street Journal, why is software is eating the world, right? That's where that phrase comes from. And I mean, you can Google that article and you can read it and it's like, my God, if people had actually just paid attention to what he wrote 10 years ago, he'd be a billionaire right now, right? Because ultimately he's like, this thing's gonna take over every industry and you gotta be thinking of every problem as a software problem. And if you're not, you're gonna be roadkill, right? So ultimately, I mean, we believe in that as well here at Data Bank that, you know, for us, it's funny, how do you, it's a data center, how do you make that a software problem? Well, you make it a software problem by analyzing every interaction that your customer has with you as a company and as a building and how can software enhance that interaction? That's exactly how you make that a software problem. And I think that requires people that intuitively believe that. And that's why you gotta recruit, you know, younger workers and maybe, you know, you gotta take someone that doesn't have the level of experience that someone else has, but has that mentality, right? And I think it's having a good, healthy mix of old and new is, I think, a great way to go. And, you know, they're out there, right? I mean, the universities are chumming out a lot of, you know, computer science people. And then obviously, you know, talk about kind of a gallantry and technology, right? You learn how to be a software programmer. You don't need to go to school, right? And you can work anywhere. So they're out there in droves and looking for a mission, right? And that's where that culture piece comes in. You gotta give them a mission to conquer. Yeah, I love it, love it. So just before we close, you like to do this rapid fire section where we throw out a phrase and we like to hear what's the first thing that comes to your mind. So if you could have lunch with a famous person in history, who would it be and why? Winston Churchill, my middle son, my second son, his middle name is Winston. And I just think the guy was brilliant, right? He was incredible command of the English language and an ability to express himself, such clear thinking, prolific book writer. I mean, just from a historical perspective, I think, you know, hard to beat in terms of impact and intellect. I think there'd be more drinking than eating though, that's just my perspective. I also like that piece too, the fact that he loves cigars, so he's able to do all that and also have his vices, fantastic. And what is the most used app on your phone? We email, of course, but after that, I'd say my news apps, and I read three or four of them. So that's probably, I know that is because I looked at my screen time, that's where I spend most of my time. Yeah, they remind you how now, how you're using your time and you're like, oh, that's terrible. What did you say last time, seven hours to social, Evan? You don't wanna know, it's very sad, very sad. And what is your favorite hobby or pastime when you're able to break away? Love exercise and when it comes to that, I love skiing. So that's something that do with the family and obviously you can't do it all the time but, and it's harder now that I'm in Dallas, but that's my day of fishing is being out on the slopes. Well, there aren't too many hills in Dallas but come up to your new Hampshire in Conway, you'll get some good skiing this winter. Yep, I hear you, I hear you. I've been up in that area a lot in Vermont. Well, thanks so much, Raul, for joining us. And while your enthusiasm and vision for the industry is really infectious and sometimes we get lulled into a sense that the data center industry has kind of stayed in the little bit old school but you really shook that up. So we're excited to see you follow your journey. Thanks, Evan, I appreciate that. And yeah, I mean, if you're gonna do something, you gotta do something that you're passionate about, right, makes the day go by faster. I can agree more. And don't lose faith. I wrote that down, folded it. Thank you so much, Raul. And for our listeners, if you enjoyed tuning in today to Data Movers, please be sure to check out jsa.net slash podcast for upcoming Data Movers episodes released every other week on Wednesday mornings as well as other DSA podcast series. And we're up next two weeks with a new episode releasing on December 30th. So go ahead and tune in before that new year bell rings. Yeah, last episode of the year can't wait to get this year behind us. So be sure to listen to that and to follow us on Twitter at Jay Scotto and myself, Evan Kirstel, and we'll see you there. Thank you again, everybody. Thank you, Evan. And as always, happy networking.