 Welcome to JSA TV and JSA podcast, the newsroom for telecom and professional. I'm Jean-Marc Lim and joining me today is Henry Downerth, is actually vice president of AQ Compute. Henry, it's a pleasure speaking to you again. I hope you've been doing well. I know I've just introduced you as EVP of AQ Compute, but you wear a lot, a lot of hats and some very interesting hats as well as we were just discussing before coming on the camera. First, I mean, let's go through parts. Can you introduce yourself as in how did you get involved with data centers and then beyond AQ Compute? What else are you doing today in the data center marketplace? OK, well, first of all, Joel, thank you and good morning and thank you for having me here and thank you to the audience as well. So I'm a 30 year veteran in the data center industry. I've been around for a while and someone called me once. I think I'm a kind of serial entrepreneur in this industry. I co-founded two companies, which I was lucky that they were quite successful. One specialized in power quality solutions for mission critical sites. This is data centers where let's say in the very early 90s where I started to become familiar with the data center world and working with companies that today are extinct or were acquired like Compute computer or control data or micro systems. So that's a long way ago. But going or seeing the race of the internet really was a strike of luck in my career and that, let's say, opened my eyes to the new opportunities. So once we sold EFI electronics, this was a company I was part of in my first company, which became a global small global company. We listed in NASDAQ Stock Exchange and it was a good, let's say a success story. And we found it from scratch another company called ASD Modular where we pioneered the modular data center concept and that company during 13 years grew consistent 30% organically year on year. So it was pretty fast growth based. And we ended up in 2014 selling the company Schneider Electric, where I stayed as a senior vice president for actually, no, the business unit vice president for a couple of years. And then after doing some consulting sports, I am extremely happy to announce that I have joined since last year. AQ Compute, part of Akila Capital, one of the biggest renewable energy investors in Europe. And I am the position of executive vice president for AQ Compute, which is the data center business unit of Akila Capital. Which is quite interesting, I remember when AQ Compute launched and I was speaking to your CEO who's actually, I think he's been on this camera as well before. And it's very interesting what you guys are trying to do, but actually picking up on that because you've got two facilities now. You've got two locations, one in Oslo, one in Barcelona. I mean, I dare to say these markets couldn't be more contrasting, more split apart because Oslo is quite well-developed, big players, hyperscalers and everything, while Barcelona is considered sort of a tier two, tier three market sometimes, it's still in the very early ages of development. Do you want to give us an overview of the market conditions of both sides? And yeah, and then what's happening in Barcelona, especially Barcelona? Yeah, yeah, our CEO, Peter Tomeras, also a veteran in the business industry that we have met through the years in different companies. So, you know, we work, you know, very, I would say very in sync in order to develop a pan-European portfolio of what we call what we call the modular hyper-edge data centers. Okay, so this means that we are building, let's say, data centers fitted for hyperscalers with a flexible design in, let's say, tier two cities in Europe, but really kind of edgy. I mean, close to those tier two cities. Okay, and indeed Barcelona and Oslo, we can rate those cities as tier two because they are not part of the flap market. And allow me that to the flap market, I would add soon flap M, being M, Milan, and Madrid, okay, or M-square, okay, because those are becoming kind of big hubs for data centers. And our, we are kind of contrarian. We like to go to those locations where we believe there is strong potential demand, but there is not enough, let's say, capacity. And we want to offer top-notch ultra-sustainable offering in those locations. Oslo and Barcelona, although they are pretty distant and different, they kind of, let's say, have some interesting coincidence. On one side, sustainability. Okay, so why? Because on one side, in Oslo, we have hydropower and 100% renewable speeds into our data center. But on the other hand, in Barcelona, we're going to feed our 50 megawatt new data center with the energy that our group generates in our own plants. So we have photovoltaic and we have wind power plants. So, you know, we are 100% sustainable despite the disparity of the locations. Okay, very, very interesting. And then I was going to ask you, because you've already kind of mentioned the EMS, so Milan, Madrid. What's your view of tier two markets in Europe? Even though, of course, you are active in some of them, but what's your view of the other tier two markets in Madrid, Milan, Warsaw, I don't know, Vienna, you name it, pretty much all of them are now tier two markets. Because there's a lot of conversation about the decentralization of computing and the IT infrastructure in Europe. So out of the flap has you mentioned. So it gives you your view of where tier two markets are going in Europe. Well, that's a very good question, Joao, because my view on tier two cities or tier two locations is as follows. What is driving demand? Demand is driven by quality of service, number one. Okay, well, of course, by, let's say, critical mass and there are certain parameters that you have to really observe. And, but really, I mean, users are more and more demanding in terms of quality. This is, and quality in the cloud, in a cloud-based economy is measured in terms of latency. Okay, so latency is the key driver. So if I am based in Barcelona and you and I, Joao, are doing a Zoom call, okay, or Teams call and, you know, the Zoom server is based out of AdLens, the quality and the latency is not going to be superb. Therefore, the quality experience of the user experience is not going to be, you know, incredible. If a competitor of Zoom, let's say, they offer a lower latency solution with better quality of image, better latency, and not the classic small delay, if you wish, although this can be extracted to gaming, this can be extrapolated to, you know, relational database, you know, operations, this can be based to CRM, this can be based to trading, this can be based extrapolated to anything you wish, which is cloud-based. So what I'm trying to say is that, you know, cloud operators will have to go closer to users in order for two main reasons. One is quality of service, and the other one is because fiber, fiber, you know, the fiber lines around are clogged. And for instance, submarine cable, okay, there is a deficit of about 75% capacity in the world today of submarine cables. And on the other hand, data is prone to grow from now to 2030 in the next eight years by 5,000%. How are we going to cope with that traffic? So we have to bring data, let's say, data storage and data processing closer to users. So those are the key things in our view. Okay. On the subsea cables, would you say that even with all the constructions and deployments that we've that we know are happening are going to happen in the next two, three years, would you say that's enough or that's not even close to enough to cope with all this data and traffic? Well, the ITU has reported recently that there is according to the data traffic. I mean the data traffic expectations. Okay, there is a deficit of 75% of the submarine fiber capacity. So the point is that data traffic or data growth is much faster than the physical construction of the cables. So, you know, laying down a cable is an adventure that takes between three to four years all together. Since you in set the project and if you deploy it, you run the finance and so on, minimum, minimum. So there is a significant, let's say, gap between needs and actual deployment. And the other piece of infrastructure which is absolutely needed and for us is essential or an interesting driver for business is those HAPs that, let's say, can let's say cities for instance, like Barcelona okay, which are growing in terms of submarine cable capacity. Okay, and Emery, outside of subsea cables and the AQ compute, one thing I would like to ask you, because I think it's quite interesting we were talking about it as well before, it's circular. So you've got a startup focused on circular economy of data centers and reusing hardware. Can you talk us through a little bit to what the company does, what's the idea, where it's headed? Yeah, well, thank you for raising the point. Well, circular is a small startup where I invested and I co-founded is, let's say, is an interesting venture that basically what is focused around finding second life to use data center gear. So what is the objective of this? The objective of this is giving a way or let's say depreciated data center equipment which normally is pretty well maintained. Okay, so that it can be acquired by smaller data center companies or not so small, by the way, but at a bargain price in order that, you know, where they can probably develop a solid infrastructure and reduce the carbon emissions you know, by reusing existing or manufactured equipment. So everyone wins. The seller makes the money out of that depreciated equipment. The buyer can buy a high quality product for a low price and the environment is positively impacted because, let's say, you know, used genset diesel generator or something has found a second life. Okay, so therefore, rather than, you know, as an average, I think something around 30 to 40 percent of data center gear goes to landfill and this way we avoid that and we find a second life for gear. And we help, you know, developing economies to grow. So so it's not a win-win situation for everyone. Yeah, I think there's two really good sides to the story. So the sustainability side and the philanthropic side of helping small economies as well to grow. And then Henry, if we look into the next 12, 24 months, that's in data center time, that's quite a long time, but a lot happens within 12 months and 24 months especially. What can we expect from AQ compute and the circular and anything else that you're involved with? Well, in AQ compute, I mean, sustainability is in our DNA. I mean, you know, since I joined a, you know, AQ capital group, I'm amazed. I mean, we have been pioneering renewal energy since the last 20 years. I mean, when no one was carbon neutral or, you know, and reporting on carbon neutrality, we were already there. So, you know, AQ capital is a Hamburg based Germany private equity, but with an incredible focus on sustainability. And what makes, what really makes it interesting in AQ compute is that we are not a data center company transforming itself into sustainable, but we are a renewable energy company, you know, which is integrating vertically at data center operation or data center practice. So it's really the, we are doing the journey from the very heart of sustainability. It's not the opposite. So that's a very unique, let's say, approach. Having said that, what about the future? Well, I think the race for sustainability, SGE, CER emissions, it has been already, you know, signed off by all hyperscalers, you know, aiming to be, you know, carbon neutral by 2030. Well, I can tell you that AQ compute will be carbon neutral the day in 2024 when we operate our first data center. Okay. So we will be already carbon neutral. So we will be six years ahead of anyone else. Well, that's, of course, our size is smaller and we have the advantage of, let's say being half, we have been founded later. Later. So these are not two minor things. We recognize that. But, you know, it's embedded in our DNA. We are carbon neutral by default, period. I was going to say, because you mentioned 2030, do you think 2030 for the industry as a whole, not a specific player, do you think that's still doable with everything that's going on in the world right now, especially in Europe? Is 2020 doable or are we going to have to wait a little bit longer? Well, I think the roadmap for hyperscalers is unchanged, regardless. So I think, I think I'm talking about hyperscale because today, I think around 70% of investment worldwide is undertaken by hyperscale, 60 to 70%. So undertaking data center investment is done by hyperscalers. So therefore, they kind of set the agenda for in this kind of thing. Right. So I have not seen any change in the commitments. So whether this may change or not, depending if there, you know, there's kind of economic turmoil ahead or things turn to stabilize, this we will see. So far, I think everyone is fully committed to that and I perceive we are not going to see change. I know this is my own opinion. So I think the commitment is there to stay. Well, that's good to hear a positive view for a change as well. And then, Henry, if people want to find out more about IQ compute, circular and anything else, where can they go? Yeah, thank you for asking. Well, IQ compute, acu-compute.com, we have a new website and we have some clips that display our new data centers. We are in the process of right now announcing the first two data centers that we are starting construction now, which is Oslo, which is a bit more advanced than Barcelona. We have Oslo one and Barcelona one and Oslo is 50 megawatts, 10, 50 megawatts, I think expandable and we have 50 megawatts Barcelona and we are working on new locations that we hope we will announce very soon. Okay. And but our focus is clear. We do tier two cities. So we are very committed to that and we want to be number one in tier two. So we want to be the leaders in those tier two cities. Which to be fair, they're probably the most exciting markets in Europe right now. Anyway, because the tabs are quite packed. I think so. I think so because as you know very well, the problem with tier one flap locations is scarcity of power, prices through the roof, land prices through the roof and well, and even let's say, you know, citizens opposition. So people do not want more, I mean, recently, you're probably so Amsterdam. You know, the city banned new data centers to be built. And well, I think that's the actual course of things. I think, you know, that was the first wave of cloud, but now the cloud has to come down closer to citizens or to users and it has to start penetrating into, let's say, smaller locations. And trust me, after tier two cities, there will be tier three cities. So it's a matter of time. And we will see smaller data centers located closer to smaller cities to provide this kind of, you know, small latency. Is everything is driven by the growth of data traffic. And that's what is going to rule the whole world. I mean, I think there is room for everyone. I think there is room for data centers in Flaps. There is room for tier two and there will be room for tier three cities. And eventually even tier four and tier five. So the small villages. Then we go back and then we go back to having your own server at home. Yeah. Well, yeah. Well, I mean, each repeats itself. It's a circle. It's a circle economy today. But Henry, thank you so much for your time. And I think to our viewers for tuning in to JSA TV and JSA Podcasts, and don't forget to check our social channels for more content. Until next time, happy networking.