 Hey, we're back with Think Tech Tech Talks here on Think Tech. I'm Jay Fardell in the one o'clock block. We have Fred Rode, he was the founder and president of DR Fortress, which is quite an amazing institution here in Hawaii in the information technology sector. Welcome so much, Fred, to come on the show. Really appreciate it. Yeah, great to be here. So DR Fortress, who told me a minute ago was 14 years old and you were there at the outset and I remember having a tour. I think you gave me the tour back when at the airport and I was so dazzled with the fact that the walls of that facility were like concrete all around. It was something out of a movie. It was like three feet thick. It was amazing security and all these servers, everywhere servers and I said, wow. And then I understood, this is recollection from at least 10 years ago anyway, that you actually had backup of all of that in other places too. So this is really a fortress. You don't call it fortress, but nothing, eh? So tell us about the founding of the company. What it was intended to do and how it has evolved since then. Yeah, so back when you came, we were Pihana Pacific. That's right. Yeah, so we had data centers throughout Asia Pacific, Hong Kong, Australia, Japan, Korea, Singapore, LA and our headquarters was Honolulu. And in 2003, the beginning of 2003 to end of 2002 we actually merged with a company called Equinix. And then Equinix is the largest neutral data center in the planet and growing, they still are. And then in 2005, we filled up our Honolulu site and they were gonna just kind of skeleton crew, mothball the site. And so me and my partner Ben Doe at the time said, why don't we go by the place? And I said, that's a little bit difficult. It's millions of dollars, what are we gonna do? And it kind of latched on and then we grabbed on two other partners, Jeff Brown and Rosa White and we raised over $16 million at the time and acquired the facility and expanded it. So we went from 12,000 square feet to, I can't remember back then, probably another 10,000 square feet that we acquired and then doubled our power systems. And so that was back in 2007 where we did that first expansion. We did another expansion in 2016 and basically we moved out of our offices, turned that into data center space, did another 72 racks. And then in January of this year, January 15th of this year, we got investment from GI partners. And they basically are coming into the Honolulu market to expand our market. And we're doing another expansion. That's another 130 racks that we're about to do. We're knocking down the wall and we're going diamond head side of our complex and we're taking down some space and we'll make it contiguous. And we've upgraded our UPS system for that. We've already done that this past year. So we'll just have to run systems over there and drop in cabinet. So it should be pretty quick. We're looking at fourth quarter of having this live for our customers. But yeah, it's been a long journey. We're now 50,000 square feet. And after this expansion, we'll be about 600 cabinets. So yeah, a long way from when you first came down, you should come down again once COVID thing is over. Well, that's a vague invitation right now. Throw on a mask and walk around with me and you can come down anytime. Okay, I may very well do that because I'm so excited about having this kind of facility in Honolulu. This is really not limited to local. This is more than that. And your service in clientele, many places. So the first definition of terms, what is a rack and how many servers can fit on a rack? And do you have more than one customer on that rack or do you have only one customer on that rack? Yeah, so we have banks and hospitals and carriers, content providers, all the way to retail stores. So it depends. We have resellers that will buy a whole cabinet. It's about, excuse me, it's about seven feet tall. It fits about 45 RU worth of, and one RU is a rack unit, looks like a little pizza box. And so that cabinet can be one customer and one customer can have 30 racks and it could be one customer doing it for many small customers that just need one server. All the way down to virtual servers that customers can buy off of our cloud marketplace. We have different cloud providers that they can buy from and they can buy virtual servers. So is the cloud with you or the cloud somewhere else that you allow access to a cloud in a remote place? Both. So we have cloud providers that have nodes in multiple locations, can be here and on the United States, continental US and some of them are actually in other countries as well. So it just depends on the provider and we have, we're a marketplace. So we have many different providers and in fact, we're about to launch a new product. Rose wants me to say yet, because we're gonna do a press release on that product. We'll allow an on-ramp onto some hyperscale clouds as well. Okay, I have a million questions if you don't mind. Some of them are probably lower education questions, but okay, so you're in there and you have this thick concrete wall, the same facility that I saw, right? But bigger and there's a couple of things that if I were your client, I would like to know about. Number one is you have, so do I have limited access? Do I have the exclusive access to this cabinet? In other words, nobody gets in there but me. Nobody touches those servers but me. Is that the way it works? So we have an access list. So the customer has access to an online portal and they tell us who has access to the facility and what level of access that individual has. Can they bring in equipment? Can they go to their cabinet? Can they order services online? And we enforce it. So the customer is telling us who has access to that cabinet. They have a combination lock on their cabinet. Some of them have cages so they have a key lock and then they'll have combinations on the cabinets inside that cage. So they're basically telling us what they need for their, usually it's like an audit. So sometimes they have to have, you know, federal audit, sometimes it's FDIC. Sure, yeah, yeah. Just depends on the customer and then they tell us, okay, these vendors are allowed in but could you escort them or they're not allowed in. We're gonna send our employees down to do the work to escort them down and we're just enforcing it. So all these servers the same, I imagine that everybody likes its own kind of server, you know, one brand or another one manufacturer, another, are they the same in size, are they the same in capacity? I mean, or is it anything and everything goes? You just fill up the space with whatever server you like. Is that the way it works? Yeah, so there's servers, there's firewalls, there's routers, there's switches, a bunch of different things that customers are using, storage area networks. The usually the conformity is within the width. So usually it's 19-inch CPE, sometimes you're getting an oddball where it's 23-inch CPE, but then it can be any rack unit size. We have a customer that has a terabit router that's seven feet tall. So it's all 45 rack units is the machine. It was interesting. They brought it in, it looked like a coffin. I'm like, what are you bringing in? Oh, it's around, they stood it up into the rack. I'm like, oh, there you go. So suppose a customer comes to you, Fred, and he says, I don't know from service and routers and what have you in firewalls. You get it for me. I'll tell you my specs, get me a server, get me a router, get me whatever equipment I need, and I'll pay for it. Do you ever do that? Or do you always require the customer to do it himself? So usually we're working with partners. So there's PAX and DataHouse, WWT, IBM, Sirius, all these guys, usually they're the ones selling them a solution. We're the hopeful solution. Usually the customers don't want to have their own data set in their office because now you have to power the UPS, the crack units, the chiller outside, and keep the thing on all the time, even if you're just carrying one device. So with us, we're doing all of that at scale. And we can usually do it cheaper than what it's going to cost for your electric bill to power all that for like just a few servers. So we're working with those providers that are selling them a solution set. Hey, I'm selling your mainframe. I'm selling you Oracle boxes. I'm selling Dell, HP, whatever. They're creating the solution for the customer. Then usually they're coming to us and saying, hey, this is the power requirements that I need for all this equipment that I just sold to the customer. Can you price out how many racks that would be and how much power I'm going to need in that rack? And that's how we collaborate together. There's been instances where we have customers from other countries that, hey, we only want to work with you to do all of this for us. And so we'll do that just from a billing expert size. But we're not usually doing it to where I'm trying to procure all that hardware for the customers because that's usually our partner's kind of. Right. That's good. That's a good way to do it too because different strokes for different folks, different opinions and recommendations. And I guess you get all boats rising that way. So the other aspect is you're providing essentially security. You're providing power so that these servers keep running. You're providing air conditioning, I suppose, although I know a lot of computers these days are water cooled anyway. And I'm not sure they need it. I'm going to ask you about that. And you're providing security. I mentioned that security, air conditioning, power. And I suppose you're providing, that's about it, right? That's what you're giving them a safe home, so to speak. Oh, and you're providing access to connectability, physical connectability. That's the one I was thinking of and all those things. And so let's unpack that a little bit. So let's talk about, for example, security. I remember this is built like a fort. That's why you call it fortress, I'm sure. And it was really thick walls. Nobody's gone through those walls. But how about the doors? How do you make sure that it's totally secure against some bad actor? Yeah, so we actually have glass doors in the front for access into the facility for the general public. Those have a film on it. So you can actually have a small firearm, small missile, that kind of stuff. But it's mainly for hurricane. So if something turns into projectile like a missile, it would hit our doors. It wouldn't be able to penetrate. Usually what the customers are doing is they're pre-registering so they can get into the data center. And what we do is we scan their eyes. And so it does an algorithm off of their iris, off of both their eyes. And it's a video. So they just basically move towards the camera. And then it'll pop the door open for them. And then they're into the lobby. And that's for anybody that's pre-registered. Now they don't have access to actually go into the data center because any second door to get into the actual data center is dual authentication. So they need their eyes plus this card. And the only way to get the card is for them to actually sign in with security and give them their ID in exchange for this card so that they've signed in for the day. And they get through the second door, use your eyes plus the card. Now you're in. And then there's a third door. And that third door is just your eyes again. And then they come into there. And then once they get to their cabinet, then they have a combination lock or their cage to have a key. And then they can actually touch their stuff. So it's a multi-tiered layer. And again, a lot of that's for audits for the HIPAA or something. For military especially, yeah. So what about the possibility we talked about this, to have the cloud also, to have, you spoke about how DR Fortress is connected with other such data centers, Hither and Yann. So I could have my servers with my family, Jules, sitting in DR Fortress. But if something goes wrong, I'm gonna have a mirror image somewhere else, right? Can I have that? How does that work? Yeah, so we do have cloud providers that have multiple sites and what you can do. Or even cloud providers like an Amazon, Azure, Google, the big hyperscale clouds, we do have on-ramps in our data center that you can actually plug into our switch and we'll get you there. And it's really simple. It's like an online portal. That's the stuff that I didn't wanna share because Rosa has a bit of a lot of things for me. We'll need any one to talk about that. But we have cloud providers that you can actually pick the node where you want. And so we have this one system that you choose. And there's multiple systems. Again, there's different providers because we have a marketplace of people in here. So you can choose to be on their system and then you can choose like San Francisco, Arizona, or whatever site you want. You could choose Switzerland if you wanted to, to actually set up another node and then use that as your backup. Or you can do Active Active. So we have different providers that can provide different things like that. But again, you're just buying, it's another system in another location. And then we basically need software to actually do Active Active or view. But it's talking to each other. And a lot of... So worse comes to worse is somewhere else just in case. Exactly. So only the ones that I've seen do that are the ones that have audits that have to do view a diverse. A lot of times if they're smaller customers and they're local smaller customers, they're using us as their primary and then maybe their backup is on their location. Because they used to have a data center at their location and they're like, okay, what can afford to do it yet again? But I'll do a watered down version at my location. Or they use us as a primary site for hardware and then they use the cloud as their backup. So it just depends on what they're trying to accomplish because there's many different disasters that can happen, right? There's tsunami, there's hurricane, but it's usually not what happens. It's usually, hey, Joe was changing the light bulb and hit the sprinkler, and it's like, I lost power from HECO just in my office. Oh my God. It's like the everyday anomaly that you're really having to fight against. So just coming in our data center is like 100% better instead of having your office. So it just depends on the customer and like what they're trying to accomplish. Because we do have other customers that use us as primary, but they do have stuff on the main line. They need that for their audit as well. So how big do I have to be? I mean, I don't imagine this is for the individual consumer home, you know, a computer at home person, or even a small office. This is going to be for bigger than that. Before it reaches economies of scale, before you get a real return on the investment, so to speak, you're going to have to be a certain size. What size would that be, Fred? So it used to be a certain size mattered, especially when you're doing physical, but because we have resellers that can sell you just for a while too, you can actually come in through one of our resellers on that. And cloud nowadays, you can, as an individual, sign up on our cloud system, right? And you pay $50 a month, right? And we've had like individuals do that for gaming servers and things of that nature. Like we're working with a gaming company to actually put a pop here so that those gaming things will be faster, because we are the internet exchange, right? We're the hub of the entire internet for Hawaii. So a lot of times they'll do that just because they don't want to have to go to the mainland and back for their stuff, like the point of sale systems and things like that, where putting on the mainland, it just doesn't function properly. So having it here, using one of our local cloud providers somewhere in our marketplace, or sometimes you're coming in and actually plugging into our internet exchange just to keep all the local traffic local, which makes it faster and cheaper for them as well. So even a small user or a small company would benefit by having some connection with the data center, even if it's through a third-party contract or distributor person. And what kind of speeds could I achieve if I do that? Up and down, do you have an idea? Oh, well, it all depends on your location because our location, we're where the carriers buy from carriers. So we have an unlimited amount of bandwidth inside our site, right? Where usually at your home, you're doing 100 meg, maybe get gig, where we're doing terabit, right? Because the carriers are buying from carriers in here. That's the whole terabit router that I was telling you about. We're doing 1000 gigabit speeds and higher, where you're not really hearing 100 gig or whatever at your office. Usually you're at 100 meg to gig and maybe 10 gig, but in here, we do 100 gig. So like, bandwidth prices are super cheap here. So I have some customers that just come in just to buy bandwidth because they save so much money that one customer on the North Shore paying $20,000 a month for one gig. That same one gig in our data center is like $800, right? So that's a big difference. Yeah, so, you know, not everybody's having to pay that outrageous price, but the carriers in here because we sell to all the carriers, you have choice. You can choose HawaiianTel, Spectrum, CenturyLink, Hurricane Electric, Telstra, GTA from Guam, America Samoa, OPT from Tahiti, Alianzeo and GTT. So there's so many different providers inside our site that you can buy from that it lowers the bandwidth price. And then you just have to worry about what you get on your office side. And that would be your choke point normally. Yeah, that would be a physical choke point on the, you know, because I'd be connected, my office would be connected with you and then I had the benefit of whatever speed you have. And the choke point would be somewhere in the cable between you and my machine. Yeah, whenever you have to call your house or your office is usually because we're the, again, hub of the internet, all the carriers, they plug into our internet exchange. And so HawaiianTel and Spectrum, that's where the intersection point to where when all those people from HawaiianTel users are talking to Spectrum users because they're just sending emails or trying to get to each other's websites, whatever, we're the intersection point. So they plug into us. And so anytime HawaiianTel needs to get to Spectrum, they go through us, right? Through that internet, because we're the whole point, all of the carriers do that. And then all the content guys, all your search engines stuff, all your, you know, social media content, like all those are our customers and they have what's called a content distribution network inside our site on that exchange. So we speed up the internet. It's not a service that we offer, it's just what happens because of the marketplace, all the carriers and all the content guys exchanging traffic with one another and the cloud happens to sit off that Sysync system. So I got to sit down for this answer, but does this mean that my internet at home, which in my case comes from Spectrum, is going through your exchange. And like in the office, we have another one going through your exchange and your exchange is connected by, I suppose not satellite, but cable to whatever cables are servicing Hawaii. Is that the right schematic for it? Kind of. So ultimately what will happen is anything that's popular in Hawaii and, you know, YouTube, popular YouTube, that sits inside our data center, right? And so if you were searching anything popular on Google, you would potentially be going through our data center. If you send an email to somebody that's online, Telcom, you would go through our data center, right? Because it needs to exchange. That's what that is. That's a hub, it's a neutral point for all of the carriers and all the content providers, whoever else wants to participate, they can exchange traffic with one another without having to go all the way to the mainland and back for something that's destined for Hawaii. So that speeds up the internet. But that's something you offer. The exchange is your part of this. Your cabinet, so to speak. Yeah, so we're selling that to the carriers. So we're selling to Spectrum and Hawaii and Tel and Google's all those guys so that your experience downstream is what you feel the difference. So when you start to feel things faster, that means they're probably on the internet exchange at that point. If it's a little bit slower, it's probably sitting on the mainland still, working on trying to get them to put in an edge node. Does this mean that if I watch a movie say Netflix, it's coming through you? That one's a hard one because we've been trying to get Netflix to pop our site. Because we're not an ISP, it's harder for them because they'd have to put in a node that can plug in the internet exchange and hit all the ISPs at once. And so they haven't agreed to do that with us yet. But I think there's probably some carriers that do have little cash nodes. And I know Akamai does do some hosting. And so Akamai is actually sending us more stuff inside their realm. It could be for Netflix, but they do everything. All your iOS updates on your iPhone, Akamai hosted that here. They do CNN and Disney and some other content. So they'll host that here. So I don't know exactly what content they have in there, but I know they're bringing more. Same with Cloudflare and Facebook and the rest of the more easy to do, this distribution stuff. So it just depends on what you're doing. If it seems really fast, because we've got Verizon through one of the carriers. So on your Verizon phone, if you are on Verizon and you type in drfortress.com, it comes up super quick, right? But if you're on... Verizon's very fast, yeah. Yeah, what they peer here locally, right? And so they're on the exchange through somebody else to make it fast like that. And if you've ever seen the little circle of deaths going on, you're probably going all the way to the mainland in fact, it's just the nature of the piece. So what about 5G? Do you have any special involvement in the 5G in the evolution toward 5G? Not directly, through our customers, obviously. We have some customers coming in doing that. They basically need to aggregate that. They're having a hard time a little bit with trying to get... They need way more cell towers out there now. Yes, right. They have a shorter range that can grab more people. But now you're talking about having one on every other light pole or on every other utility pole. So they're still trying to work through the deals on, well, how do you pay for that? They're gonna charge you on every single pole. So I think 5G is a little bit behind in Hawaii. But I mean, it's coming, right? That's the next wave. And that's, like it or not, I don't know if there's gonna be falling from the sky when you do gig to your phone, but... Let me unpack some more. So of course you've got to have power. And I imagine you have redundant power just in case the external power goes out. What do you do for that? And how quick is it that it trips in? Yeah, so we have what's called an uninterruptible power supply. We have multiple systems. And those systems basically are what's feeding our customers. We have a VLRR system and a lithium ion battery system. And so we have a 1.25 megawatt one and a 250 system. And that's what's really powering the facility. And then the carriers actually pick DC power, another system, but that's what's powering the customer. It goes through the UPS all the time, yeah. It's always going to the customers that way. And then we have five generators. So three for the customer load and two for the cooling load, a mechanical load. And what happens is if we lose power from the utility, the customer stay on through the UPS system. And then the generators come on and refeed those UPS systems to keep it up running indefinitely. Indefinitely, because you have the generators. So you can go. So we have day tanks on all the fuel and then we have a reserve 10,000 gallon system. And so we just have to keep on filling up that 10,000 gallon reserve and then we can run forever. That's a lot of gallons spread. We don't wanna have to do that. So it's getting expensive, but yeah, we have a minimum of eight days of fuel right now because we wanna make sure we outpace our refueling contract. We don't have to worry about in 24 to 48 hours having to get fuel. We can last for a while before we have to think about refueling. So part of that is keeping the place cool because you have to achieve a certain temperature for optimal performance of all these servers and equipment. So what do you have for that? I recall when I made my visit that it was pretty chilly in there. What are you using? How do you achieve that? Yeah, so we have two systems. We have a DX system, which we use for some hospitals that we have inside the site. We have a whole room that has like zero water. It's all FM 200 and it's all refrigerated and whatnot. So that room actually is specifically designed to do 30, two, eight, three face power on every rack and it runs off that system. We have 13 of those units and then they all work in unison, each one's in its own pod, but that's specific area for high power density in hospitals. The rest of the entire data center uses a chill water loop and then those hit computer room AC systems and then we have what's called N plus one. So we have primary that's on and then we have a backup just in case that primary is either being serviced or if it actually goes down. We have three 210 ton chiller units. That's enough for an office building. We can actually call the entire complex but it's specifically just to cool computers, right? Because you have a lot of drives, you have a lot of fans that are basically it's creating heat and you don't want that server to heat up because if it gets too hot it'll do a self protect and shut itself off because it's making sure it doesn't melt the CPU. So we gotta make sure that we maintain a specific temperature because it doesn't matter how much power we give you if we can't cool it, your stuff will automatically shut itself off. So we're trying to maintain 71 degrees plus or minus three degrees in the facility and between 40 to 60% humidity. So you're trying to do a balance of both because if you get too cold and too humid what happens to your can with condensation you don't want that happening in your data center. Right, right, right. So you're expanding and I don't know if that's happened or about to happen. You're adding a whole new wing essentially onto this facility and it's gonna be state of the art and you issued a press release about that a couple of days ago. Can you talk about it a little and tell us what the plan is? Yeah, so we're taking over some space inside adjacent to our current data center. We're gonna knock down the wall we're gonna basically do another 140 cabinets. So we have some large customers if they needed 30 racks I can't do that today. And so we need this space to actually do bigger customers. So we're just trying to stay in front once you reach 80% capacity you have to build. So that's what we're doing and ultimately our plan is to do more. So we want a second site on Island as well. So once we finish this that's gonna be on our next horizon. And then we have partners on the mainland that we work with if anybody needs anything on the mainland but the current partners that we got that invested in there they really wanna invest heavily in Hawaii. They see that the bulk of the customers that are out there today they're still using their office for their data center. And on the mainland people don't do that. So we've been doing this education process on like, hey, it's not as expensive as you think a lot of times we can do a return on investment cost analysis and tell them, hey, with what you're paying just for your power to run these things with keeping it cold all the time we can actually just give you a rack for cheaper. And then what you can save and buying more bandwidth inside our site at cheaper rates. A lot of times we're gonna save you money and give you a better performance hope you meet your audits, things like that. So that's what we're trying to do with this expansion is also reaching out to the existing Hawaii community that they work here to help once you come into this space we're kind of like Alamoana where we don't do a lot of stuff we're the location where all of these things that you can buy exist in one place. And a lot of times it can save you a ton of money or give you a better solution or both. Yeah, one last area I wanted to ask you about and that's the dynamic that's going on right now and I would make some guesses COVID more people working at home. COVID more people working on the computer instead of an office setting where they have other ways of communicating more people using Zoom which requires more bandwidth. And furthermore that these things are probably gonna remain in place after COVID subsides, knock wood that is soon because as soon as COVID subsides I'm coming out to take another tour. So is this affecting you? Is this part of your planning? Where do you see it all going? Because obviously information technology rules the earth and it's gonna be ruling earth much more in the time to come. How does that affect your fortress? Yeah, so it hasn't been really affecting us directly it's been affecting our customers so those that are in the hospitality industry those are the ones being hit and then we feel it as if they need to shrink or they need reprieve on their contract. We've been feeling that but we know what's coming, right? You mentioned 5G, you know that's gonna be the next wave everybody's preparing for that. There's also this thing called edge computing where they're talking about pushing the cloud to the edge and getting it to the regions and getting it to micro data centers for the next, talking about these autonomous cars and for whatever is coming next. I mean, we didn't even have TikTok not too long ago and that's like a billion dollar corporation that's creating content constantly. So technology isn't going away and just look at the apps on your phone or you know, playing a game on their computer all that sits in data centers. It doesn't sit in offices all around the world that it becomes more mission critical that's when you need a data center. And then the networking, you know how many times you connect up to different countries or different mainland ones that becomes extremely important. So the internet exchange is only growing it's exponentially gonna grow once you get 5G in here because everybody's gonna wanna also push their cloud to the edge and hit all those networks one time to make it faster because sometimes these calculations need to be happening in nanoseconds and not have the latency of when all the way to the mainland and back. So, you know, it's just like church, right? If everybody went to church there's not enough churches if everybody actually used the data center there's actually not enough data center space. You're in exactly the right place at the right time. All the influences and confluences are coming in your direction, Fred. What a thing. And I know you and you'll still talk to me even with additional data centers, Hither and Jan. Thank you so much for joining us. Fred Rode, president and founder of DR Fortress. Aloha, Fred.