The Role of Sustainability in IT - Zachary Smith & Jacob Smith
Welcome to the Upstack podcast, an ever evolving conversation on all things digital infrastructure, giving tech leaders food for thought as they push to stay ahead of the technology curve. I'm Alex Cole, and with my cohost and colleague, Greg Moss, we invite you to join us as we talk candidly about the latest technology infrastructure topics. Stay with us. Greg Moss, it's always good to see your smiling face. How are you today, my friend?
Speaker 2:I'm doing well, Alex. Always good to see you too.
Speaker 1:There's so much that we could talk about every time we're together, and we do cover a range of topics. But I know our last conversation on the Upstack podcast, we talked about the we were talking about power and AI and and the fact that AI seems like this onion, a multi, a many layered onion you peel back only to reveal more more that you want to dig deeper deeper into. But
Speaker 2:Let's not forget the hype cycle. Right? We're sitting
Speaker 1:And the hype cycle. Yes. The the rush to the hype cycle. And and that last conversation, I mean, there's so many different directions we could have we could go in coming out of that that last episode. But there is something about that that rush for scale, that AI has brought on.
Speaker 1:And crypto still let's not forget about crypto. And with that rush is the demands for power. If we thought the demand for power was great before, here comes technology that while it's been around for a while, it seems to be evolving even faster. And what does that mean? What does that mean for for data center providers in particular?
Speaker 1:Like, how are they handling that that load, that that ever increasing demand?
Speaker 2:These are fantastic questions, and I'm really happy and excited about who we have here today to talk about these things.
Speaker 1:We we have got you know, I'd like to think you and I were separated at birth. But this will be our our first four person podcast, but more about our guests momentarily. Because when we talk about the rush for power, I think sustainability, given the current green green landscape, I think is some terminology you use in our preparation for today's conversation. Sustainability and efficiency certainly come to mind, and climate change, the impact on our changing climate. And it really begs the question, how does sustainability and efficiency factor in to a number of different things, including reducing the cost of technology for businesses and in many other ways?
Speaker 1:So I think this is the perfect opportunity to to bring in some, as we always do, some real subject matter experts to to peel a few layers back of the Upstack podcast onion. So while we weren't separated at birth, I'm happy to report nor were our our guests. So today, we are very happy to welcome a dynamic duo who happen to be brothers. Not only brothers, but, I am told we'll have to see identical twins. So joining us today on the Upstack podcast are Jacob and Zach Smith.
Speaker 1:Welcome, gentlemen. How are you? Glad to see you.
Speaker 3:Yeah. Doing great. Thanks, Alex. Thanks,
Speaker 1:Great to see you. Allow me to talk about you for a little bit. So Zach and Jacob, you you are you are cofounders of Packet, the digital infrastructure company, which I believe was acquired, what was it, 2020 by our friends at at Equinix, the the global data center provider. Jacob, you in particular, we're focusing on integrating and scaling what would become Equinix Medal. And I think you led other various aspects of their go to market strategy and marketing, so we have a connection on that front.
Speaker 1:We can talk shop in the post show. But your focus was on on customer success and and product led growth. Give me a beat.
Speaker 3:Big big words there, Alex.
Speaker 4:Big words.
Speaker 1:Yes. Focusing primarily on customer success and product led growth for startups, developers, and and open source. And and on that front, Zach, you were also at Equinix, given you're a cofounder of of Packet when it was acquired. And you headed up, I think it was Edge Infrastructure during your time there, having recently left, both of you. But you've also been spending the last, was it, four to five years with Open nineteen, the Open nineteen Foundation, which is certainly something we should talk more about today because it's very much related to today's subject.
Speaker 1:And in Open nineteen, you're leading innovation in data center hardware in finding sustainability standards for the industry. Greg, we nailed it yet again.
Speaker 2:I think so.
Speaker 1:With two guests, let alone one.
Speaker 4:A two for one special for you guys. Right?
Speaker 1:Exactly. So so welcome welcome again. We're we're gonna tackle I don't know how you feel about onions, but we're gonna start peeling here. And as I always like to do, you're the subject matter experts. Greg, I'm gonna include you in that that bucket.
Speaker 1:Thank you. It's helpful just to set the table for for our listener, or hopefully listeners. But I think it's helpful when it comes to this idea of sustainability and efficiency in in the data center space, getting a sense of of the present landscape. So what is the state of stability today as it relates to data centers?
Speaker 3:I think we should have Zach to do this one first. It feels like right up his alley. Boom.
Speaker 4:You know, I was kinda surprised, Alex. He started the whole thing by introducing Jacob and Zach Smith, and I'm just so used to
Speaker 1:Zach did that on purpose. Jacob Smith.
Speaker 4:It's good. I I like it. It feels good.
Speaker 2:Jacob
Speaker 1:Jacob, he's got marketing chops. So he's gonna get the shine here. The long overlooked marketer.
Speaker 4:Yeah, is that gonna be this the truth is we are identical twins. I'm an hour and twenty minutes older. So I am Jacob's older brother, even by just a smidgen.
Speaker 3:That's quite
Speaker 1:a delta. Eighty minutes.
Speaker 4:Yeah, don't know if we got enough time in this podcast to debunk the challenges and retro on that with my mom. We can invite her on for a little bit more. We bring her in now, or
Speaker 1:should we wait? Okay.
Speaker 4:I think it would be a lot longer than ninety minutes we got. But yeah, man, I'd love to cover some of the sustainability topic within data center. And broadly, I'm going call it digital infrastructure, right? Some of us on this call have happened to spend a bunch of our career in data centers, building data centers, running data centers, using data centers Putting things in and
Speaker 3:out of data centers.
Speaker 4:Pulling But them in and the vast majority of the humans in this world don't really care about data centers. In fact, it's largely invisible, which I think is testament to our industry overall. Infrastructure is generally invisible to most people in data centers. Although we have seen them in the news, you know, recently, you know, picket fence in, you know, know, certain markets or whatnot, they they kinda like most of the I actually teach a fourth grade class occasionally on this, and most people have think the the entire cloud and data center exists on their iPad until you kind of walk them through it, they start thinking about buildings they've passed in Manhattan or down the New Jersey Turnpike. And they're like, oh, all those air conditioning's on top.
Speaker 4:I bet that's probably not, you know, a warehouse. But I think the state of data centers today is in a ton of flux. Right? And as it relates to sustainability, I think the big focus in our world has been, you know, rightfully so, on power. Right?
Speaker 4:It's a big thing of what we do, which is how much power can we get? Do we have enough? Is it in the right places? I always say that getting a good data center requires three things, great power, great connectivity in a great location, and usually get two out of three. And, you know, power availability has become kind of a major challenge and issue for an industry that's just growing at kind of an exorbitant rate.
Speaker 4:But there's a there's a, like, a whole other part of sustainability. That would be what in my world would be kind of scope one utilization for a data center company would be the power that it is using. But then there's water, right, which has become, you know, a pretty hot button issue. Most data centers are air cooled. They're air cooled with evaporative cooling, which takes a large amount of water, especially depending upon the temperature ranges and, you know, both inside and outside the data center, the differentials and and and kind of different environmental concerns.
Speaker 4:And then there's just the wider concept of waste. Right? Vast majority of enterprise data centers, I think we've done a lot of improvements over the years with cloud, have very low utilization of the things within it. Right? So they're constantly operating at, you know, two, three, 4% utilization.
Speaker 4:I think cloud is much better. I don't have any specific numbers, but we certainly saw quite a bit working at Equinix and seeing some of the workload that our customers were doing that was making that a little bit more efficient. But there's still just a massive efficiency game within the utilization of infrastructure itself. And then you have the actual components, the things that are making it, the computers, the servers, the chips, the stuff. And we always think you know, I heard a great statistic a couple years ago that 70% of the carbon impact of a computer is making the computer.
Speaker 4:20% of the carbon impact is running the computer for its entire life. And 10% is kind of like, you know, getting rid of it, destruction, recycling, etcetera. So, like, you think about that and we see this big focus on utilization of power, which is important and big and relevant, but there's a whole other side as it relates to sustainable supply chain, recycling, circularity that I think is becoming more omnipresent within our space.
Speaker 1:Don't know
Speaker 4:if that answer your question, man. But, like, usually when somebody asks me a broad one, I I take it.
Speaker 1:I I only ask broad questions. I leave the tech the technical questions to Greg.
Speaker 4:Alex, you gotta be careful, though. You've got two musician performer, you know, ex career people here. So you give us the mic. Like, we're probably gonna use it.
Speaker 2:Alex, we're committed to to doing a a little to to finish this off with a little little I got the
Speaker 4:I got the bass in the other room.
Speaker 1:I actually That that that could be the new theme song for the Upstack podcast. I think it's only fitting
Speaker 4:It's coming.
Speaker 1:With with Greg Moss's vocal overlay. Yeah.
Speaker 2:I get my my heavy Brunt's vocal. So I
Speaker 3:gave you guys a a slightly different take before we move on, Greg. Anyone anyone I love that. I mean, Apple had some event, like, was was it yesterday or the day before? What's today? Thursday?
Speaker 3:It was two days ago.
Speaker 1:Yeah. There's
Speaker 4:Apple does the
Speaker 1:you know?
Speaker 3:Yeah. Some I thought it was fascinating because I went yesterday to go look at it because, you know, might as well have one last cord in the house. Right? And I was looking on the website, because, you know, they want you to pre buy it now so you can buy it. Like, you package it all up so you can click buy the moment they announce or let you let you click it in a in a week or so.
Speaker 3:And pretty prominent on the page was this this sustainability report for the for each of the products that they launched, and it was pretty detailed. It wasn't just we are broadly green, but so, you know, pretty much down to, like, components, which are recycled, percentage of, you know, carbon, you know, all all the kinds of different stats you would expect, but at a pretty detailed level. And I think, you know, my point there is that this is just in the consciousness of consumers. Obviously, as Zach said, data centers are kind of invisible to people, but it's a it's a part of our technology world that's unavoidable. And so, you know, to answer your question a slightly different way is that people just care about it, and, obviously, we need to care about it.
Speaker 3:But it's becoming a business differentiator. Like, the ability to kind of do better there isn't just greenwashing. It's gonna be a competitive advantage, and not just a cost. And so I think that's really interesting to see a company like Apple sit you know, how do they maintain a premium product and a premium experience? Some of it's in their design and their packaging and their marketing, and some of it's in their supply chain management and twenty, thirty goals, and shown that in a really compelling way.
Speaker 3:So I bring that to the table because I think it's it's inevitable to hit, you know, our industry, and we see it a little bit in some of the clouds. Google Cloud has a nice little, would you like to get the lower carbon impact VM? You know, just kinda bubbling that up, and I think we're just at the very beginning of a rapid cycle there, Probably as rapid, if not more so, than what we've seen with, you know, AI moving from a cool idea to, like, a thing people want. It's a great point. Life.
Speaker 4:So Jacob, I think the point there that is so fascinating to me is that we're seeing, like a significant amount of leadership there in consumer B2C businesses, right? People being a great example, know, Mike I'm sure you know you buy a know a thing of soap, know it's gonna help. There's probably a product manager of sustainability at, you know, every consumer goods company or a whole team. And what we've typically seen in the digital infrastructure space is sustainability primarily be more of a legal or finance, like regulatory compliance, maybe investor compliance to comply with new stuff coming out with, you know, shareholder needs and whatever. But I've seen even, like, I think the first company I know of in our kind of b to b space is Cisco, which has, you know, Denise Lee leading, head of sustainability product.
Speaker 4:And this is like, how do you bring the benefits of a circular and sustainable way to end users and customers?
Speaker 2:So save that because I remember you specifically talking about a circular economy and that's gonna be a little bit further down in the show. But I do wanna go back to your original point about these data centers. And how does a data center like an Equinix take large components of their facility and make it more sustainable. Are there economic benefits, technical benefits? I want to understand that at a data center level, we're going to get to the consumer product level later, but I'm very curious.
Speaker 4:Yeah, mean, there's a couple of ways that we can peel back this onion. And now it's got me all kinds of hungry. I think an onion dip and Super Bowl. I don't know whether. But, you know, if we peel this onion in a couple ways, like, actually, the last few years with what I'm gonna call the the the energy crisis in Europe with the Ukraine conflict and kind of the related reaction there, you know, made this like not just, how do I say, a nice to do thing, a checkbox or a green bond or whatever.
Speaker 4:It's like it turned it into actually making a lot of sense financially, right? Because you had this massive energy costs that were very, very difficult for not only the providers, but the the end users or the customers. And then in many cases, you just couldn't get any energy. And it's still the case. It's this large gap between the demand and the supply.
Speaker 4:And so there's this race for efficiency, which is awesome. Right? And so I think there's just a pure, like, lever here going on in terms of it makes financial sense, just like we've seen in, solar power in the kind of utility space, right? It makes financial sense to have a more efficient data center. Okay?
Speaker 4:But there's a couple of other aspects here that are planned. I really wanna separate the difference between single tenant data center solutions and multi tenant data center solutions. Right? Because in a single tenant data center solution, whether it's a large enterprise or a hyperscale or they have control over the workload. Right?
Speaker 4:They know what they're putting into it. They know and can optimize things around maybe kind of a vertical implementation of cooling. Maybe they can, you know, singularly like raise the temperature within the data center for things like that, right? They have a lot of control from end to end, right? But when you're in a multi tenant solution, you really have very little control, right?
Speaker 4:A, you might actually have contractual guarantees, which is something I know we worked on at Equinix, which is working with the industry to kind of raise temperatures that we could within the ambient side of intake to meet ASHA guidelines, which was work we had to do throughout, you know, 10,000 plus customer contracts to make sure that we weren't SLA or guaranteeing an intake temperature in a certain way. Right? So things like that, even though we knew the equipment, you know, standards for the past decade have a higher thermal intake, you know, there was, like, issues related to implementing just a more efficient way for us and for the customer. And so some of these things, you know, are just kind of complex ways that we deal with efficiencies in a multi tenant world where you don't control all the components. And so there has been Can
Speaker 3:I tag on that, Zach? Or are you done? Because I have a quick interjection there. Because I think that that is an important point, not only like single tenant, multi tenant, but hyperscale and everyone else. Right?
Speaker 3:And so when we get to everyone else, they need a lot of help. They need a lot of help with a lot of But including, you know, we've had this nice dividing line like, hey, you know, like, you know, we'll build the data center, we'll build the data center in the cage, we'll provide the power. But you know, after that, like, you kind of got to do a lot yourself. And I think we've seen broadly speaking enterprises, but let's just say anyone who values technology as a core part of their business, but is not a hyperscale get,
Speaker 4:needing a lot of Just help wait, from the almost everybody, right?
Speaker 3:Almost everyone, right? So whether they're brand new and they got a billion dollars in venture funding or they're 100 years old and they're transitioning their business in meaningful ways, they need a lot of help. These are areas of expertise. I think one thing we observed, especially as Zach noted the power issues in Europe, very dynamic market, super complicated. Gosh, customers just needed our help.
Speaker 3:Like they were glad that we were working that you know, angle of, you know, pre buying power and understanding the mix of it and how to make it, yes, more sustainable and efficient and cheaper and whatever. I think that that opens up the box a little bit when it comes to things like, what are you doing within the rack? How are you cooling your stuff? How are you utilizing it? They're going to need help from data center providers, people like Cisco and Dell, know, MSPs, clouds, they're all playing a role, I think, in helping to frankly move the needle on something that's just too complex for for most companies aren't scaled at that.
Speaker 3:They're just not you talked about scale at the beginning. They are not scaled on these issues, and they need our industry scale to come together and support them.
Speaker 4:How many enterprise companies have thermal engineers on staff?
Speaker 2:Yeah.
Speaker 1:Let's we'll we'll release an informal poll. I'm curious, Zach, you talked about the the race for efficiency. But on the flip side, Jacob, you're talking about, you know, I'm hearing, with your Apple example, and you're kind of reading our mind on the questions, consumer expectation. Not going to be, I'm not gonna give you my money unless you meet certain standards, environmental standards. I'm who's leading there?
Speaker 1:Is it the consumer driving change on the business side? Or the race for efficiency and potential cost savings and alternate energy sources is driving the business forward, or is it a mix of of both?
Speaker 3:You're asking the question to a revenue guy here. So, yes, marketing. But really, you know, the way Zach and I often divided the business when we worked on it together was front of house, back of house, and I really like the front of the front side of a restaurant. Right? Everything from, you know, getting you to the restaurant to taking your coat to to giving you your bill, right?
Speaker 3:That part of the customer experience is my jam. And I'm a little biased. I think that we've kind of worked through a big cycle of cloud, right? Cloud has been enormously impactful. It's changed everyone's expectations.
Speaker 3:What they want, they want cloud. They want that thing, right? They want operated stuff. But we've moved a lot of the generic workload, and I don't mean that like it's not important workload, it's just a lot of the stuff that's like fairly normalized. And as we get into the non generic, we're generally talking about revenue generating workload versus cost workload, right?
Speaker 3:ITE, things that are like, okay, I want to compress that now. So there's definitely an efficiency angle, but I think we're going to see more and more just because of the stage of the cycle we're in, and we see a little bit of that with AI, which isn't like, oh, I must save my AI costs. It's like, no, I must differentiate and grow and adopt. Otherwise, I'm going to not be able to pursue my revenue goals. Opportunity be a driver for these things as much, if not more, because I do think that digital infrastructure and this is kind of, you know, longstanding opinion on this side of the fence is that, you know, at scale, you know, things become more specialized, hardware and software start being integrated together.
Speaker 3:They're not generic, right? People care about them. Most businesses are becoming more digital. Digital is getting to be less generic and more specialized, ergo. You're going to care a lot about both sides of it, and we're going to have to surround more of the, I'd say more of the product and revenue conversations with the advantages, not just the sort of cost reductions, although that's a huge part of profitability and certainly gonna be a big driver.
Speaker 4:Jacob, you're punching on something there. I usually use something like the bell curve workload. It's almost like the bell curve workload had gone with the mass market numbers. Like, 80% of companies did mainly the same stuff, right, which is run a web app, like, have kind of SQL data stores, and do some storage. Right?
Speaker 4:Like, 80% of companies did 80% of their workload with kind of the same stuff. And now you're seeing it very differently. It's the anti bell curve. Right? Which is like a small number of companies consume the vast majority of infrastructure on a few very specific things.
Speaker 4:Right? And the most the best longest serving example is like wireless, the telco. Right? There's only four wireless companies in The US, and they spend, you know, billions, tens of billions of dollars a year on IT. And it's super, super specific to only those four companies.
Speaker 4:Yeah. And there's no bell curve there, which is why it's pretty hard to do, like, telco cloud and related. Right? Like, five g in the cloudy kind of stuff when your radios and your processors and your things and your millions of subscribers are very unique to you. And I think we're seeing more businesses like that.
Speaker 4:I think, like smart cars and IoT things and, like, you know, I'm waiting for the, you know, Apple VR thingamajiggers and related. They're not gonna be normal at all. And yet they're gonna be a massive technology driver. And so I think we're just gonna see more and more businesses operate a space that's highly specialized and anti bell curve, and that's really different than the kind of generic mass market supermarket stuff we've had in cloud that has benefited most kind of, what do call it Jacob? Like cost driving normally compressed workload and what we had over
Speaker 2:the past twenty years. So I think that's great, right? An anti bell curve allows us for more control, right? If the masses are doing something a certain way in a big way, like a PUE of 1.2 or whatever it is, right? A hyperscale single tenant data center gives us control.
Speaker 2:Right? But let's still talk about because that's a nice world that we're, I guess, heading towards, but there's still tons and tons of companies.
Speaker 1:There's a
Speaker 4:lot of gaps between that and our little dreamy there.
Speaker 2:And Jacob, you brought up a good point earlier where you start talking about people that are interested in whether it's the thermal or the energy or the efficiency or whatever, right? However, I have a 100 clients. And there's only two of my clients that are talking about green sustainability or caring. And I've noticed that both of those organizations are larger on the larger size and seem to have some sort of mandate. So the question becomes, I don't think anybody If you look at a list of 10 priorities when selecting infrastructure, a lot of the smaller midsize companies, I mean, that's probably number 99.
Speaker 2:Where's the world going? How do we create, you know, or entice these people?
Speaker 3:Give me some different data points there, Greg. When I was at Equinix, was, you know, hanging out with the CRO leadership team, helping them adopt product led growth and do lots of different things around operated infrastructure. And one stat I found interesting is we went from serving, you know, 10 to 20, you know, sustainability reports per year custom, you know, like, hey, give me I need this big partnership with Salesforce that was public about that years ago to doing like 1,200, you know? So I would say it matters. The question is, is it, you know, Apple's a great example because they're Apple, biggest, most profitable company in the world, but also based in California, who this week was passing legislation as they often do ahead of national curve around scope three.
Speaker 3:So it's probably no surprise Apple wasn't like, you know what I should do is be the best steward. They know it's coming, right? It's coming to regulate that. And some of this is going to simply be driven by requirements versus preference. So we could all Are we there?
Speaker 3:You're eight customers. Well, no, we probably are not, but I mean, SEC is talking about Scope three right now in Congress, and that's like a problem, and it's probably going to get watered down, and it's somewhat inevitable. And the question is, is it's also impossible for companies to do right now. I mean, that's really probably why they're not asking for it, but they're going to start leaning on their vendors. The suppliers are going to get the pressure.
Speaker 4:Listed companies are already being forced into it. We saw that in the RFP side, pretty much top of every listed company was there because AIA, they have to start reporting carbon impact. They you know? And they're subjecting most of these are global businesses. I'll give you a little anecdote.
Speaker 4:We, you know, we're required to, like we got a regulation one of my last, like, months at Equinix where it was some, like, thing that came from the city of Amsterdam saying, you must because you have servers, computers, not data centers, you have computers in the city of Amsterdam, you must report the power saving mode, of every computer on a quarterly basis that resides within the city of Amsterdam to us in this format. Yeah. You know? Like, was it possible to do? No.
Speaker 4:It wasn't possible to They're like, but you have all the computers, so you must tell us that, because we really don't have enough energy, and we need everything to be more efficient. That's like a local city law. Right? I mean, who knows how they would do it, all the other things, but this is like it's gonna happen. Right?
Speaker 4:Whether it's at a big, nice, convenient federal level or it's, like, individual little places. Know? I know. Ashburn, Virginia says, like, you know, hey. We want this to be this way.
Speaker 4:Singapore is a great example. Why do have a Singapore data center problem? Basically, we're like, we're not gonna issue any more permits unless you all do these things this way. And so I think that this is coming, smart companies or those that are investing, Greg, for the long term because it's a critical differentiator for the future of their entire company versus, like, we need this to be cheaper because IT is expensive. You know, those companies, like, if they're thinking ahead five years and they got a board and they're like, what are we gonna like, they are we must do better here.
Speaker 4:We must start understanding what our carbon impact is. Resources really matter. How are we going to report and account for it? How are we gonna reduce it? And a lot of companies, you know, have taken bold steps like net zero goals.
Speaker 4:How would they get there? Right? I always like to use the 2030 net zero goals for companies who have five to ten five to seven year refresh cycles on their computers and haven't started yet. I was like, I believe it's 2023, almost '4.
Speaker 1:You're inside the window.
Speaker 4:Yeah. Right. I'm like so and and I think you'd be hard pressed for any company to to be able to report accurately on their scope one or scope two, let alone their three, on every single carbon impact of every single component in their supply chain. Like
Speaker 2:Understand.
Speaker 4:Yeah. So I think it's common for the vendors. It's a great opportunity for service providers and other people in the ecosystem to start stepping up with actual offerings and products. And this was what I was trying to make earlier, which is like, I personally don't believe in, Alex, you mentioned something like green energy cheaper. I was like, uh-uh.
Speaker 4:Right. Actually not. Like, more value. We're gonna do more for you. And there's a huge burden.
Speaker 4:I think one of the biggest, you know, opportunities I see right now in the data center space has moved this from a, oh, we have to do this reporting for you so that you will buy our existing product into there is a set of value that we're providing for you that is worth a lot, and we're going to charge you to deliver this offering, this new service. And I I I just don't see how the investments can be made without actually turning this into a product and a monetization angle.
Speaker 3:Yeah, especially since it's not, you know, we are at a REIT, right? Equinix is a REIT. They led the industry in terms of that kind of structure, and so there's a lot of thinking that goes into kind of twenty year cycles of buildings that tend to get more valuable over time. And obviously, as you think about refresh cycles on, I don't know, NVIDIA h one hundreds, you know, that don't last for twenty years, let alone do.
Speaker 2:The need to pump that stock's gonna dictate that for sure.
Speaker 3:Yeah. But also just like the technology, you know, technology's gonna change. And so we've been putting stuff into data centers for a long time and kind of letting it work its way out over time. But obviously, you look at hyperscale and, you know, they're on three year cycles at Meta and that's like refreshing all of it Yeah. Because of advantages, reasons, whatever.
Speaker 3:It's kind of another flank here where we've got this circular part that's gonna matter a lot more as we start turning the estate over And that gives us opportunity as well, right? It gives us opportunity to reinvent what we're doing, but, you know, like, it's hard to be agile with physical things. Like, have to you can't just apply agile method, you know, to hardware. It's difficult. The cycles are long.
Speaker 3:It takes time to build can do it.
Speaker 4:Physical stuff. R m dash r f the data center and recreate it. Yeah. Not so much.
Speaker 1:Let let let's let's dig into circular, because that's come up a few times. You know, circular economy, to me, that brings to mind things hardware, laptops, iPhones. Some people get a new phone every year, some every two, if not more. Potentially a significant amount of tech waste. Where does that go?
Speaker 1:How is the circular economy currently applying to data centers specifically?
Speaker 4:I start, I just to say something. I think in some ways, cloud and data centers have really moved the needle on circularity. Both are recurring revenue businesses. They're paid for outcomes, not widgets. So things in an as a service model, in my personal viewpoint, cause an economic reason to pay attention to the right things.
Speaker 4:Like, who who has the cost of operating an inefficient data center? A data center company. And they, like, don't get new money for that. It's not like they charged an NRE, built a data center, and walked away. Right?
Speaker 4:They have to operate it. And so I think that's good because it causes the right kind of tie between economic outcomes and, like, you know, efficiency and whatnot. So I think the as a service model has been a great boon both in cloud and in kind of data centers in general. I think really where we're struggling is that when I look at the carbon impact of a square foot of data center, certainly significant amount in, you know, core plant and equipment, concrete, and all the other things that go into building the actual building. But then you put, like, you know, millions of dollars per square foot of hardware into those things that all have a significant, you know, carbon impact.
Speaker 4:And right now, I think the biggest opportunity is to introduce first and foremost, we started the conversation with this concept, like, the cloud is mainly invisible, and you said something like a laptop. If I get a laptop, I I'm, like, pretty conditioned not to throw that in the trash can. Right? I take it to e waste. There's city programs.
Speaker 4:Dell's gonna take it back. I can go to Staples. Like, there's a lot and my kids know lithium ion batteries are bad. Like, don't put those in the trash. Like, there's lots of things built into it, and I suspect there's actually cost structures built into it from a consumer standpoint that, like, get paid for as part of those recycling programs and take backs and other things like
Speaker 3:You'd like trade in your iPhone when you upgrade. I mean, it is part of the
Speaker 4:Or some great product management, which is like, would you like to and I'm, you know, I'm pretty sure Apple's not taking that iPhone and throwing it in the trash. They're doing it and, like, taking apart all the pieces, melting out, and all the palladium, and putting it back into a new iPhone. And but that's not happening in the data center. Right? Which is right now, most people think of the data center as you put stuff in it, and oh my gosh, I hope I never see it again.
Speaker 4:Right? And we found it to be one of the biggest issues we have in a multi tenant data center is like getting rid of the equipment. Like what happens when you're done? Right? So first off, nobody knows.
Speaker 4:It's all kinds of a hodgepodge of, you know, kind of deconstruction slash disposal companies. You don't really get to return it to the manufacturer. There are no programs as far as I'm aware of that you can reasonably expect to, like, click a button and take back all your things to different OEMs and ODMs and cable manufacturers and things like that. And so I think it's kind of the dirty little secret of the cloud because it's out of sight, out of mind. And I think it's an opportunity that we can really I mean, I think one of the easiest, most awesome if all you data center people are out there, please introduce a paid recycling program.
Speaker 4:Like, charge your colocation customers money for destructing and recycling back to the OEMs, you know, the hardware and the data center. Like, they will love to pay. Right? There's some issues there, like data destruction and very, like, put put screws through my hard drives, but, you know and there's all kinds of issues that we need to work through. But it seems like one of the biggest opportunities is appropriate re appropriately recycled.
Speaker 4:You know, the hardware. Buy buy it's not free. Right? So, like, even You
Speaker 2:walk out of Whole Foods. Right? And there's three bins there for compost, for paper, for trash. So again, I know it's dumbed down substantially, but same concept. I mean, there's one data center out there that's doing this and it's Iron Mountain.
Speaker 2:They happen to have a
Speaker 4:disposal portion Yeah, bought a company That did that.
Speaker 2:And it's not it's not even promoted properly. So I I couldn't agree with you guys more, and I think it starts here. Should we man should they be fined or should they be required at some level to do something? It's a revenue generator. I mean, you said it yourself.
Speaker 4:I think I think that, you know, very soon you're gonna start to see procurement sides and related force the suppliers to be like, I am not buying that computer unless you give away for me to give it back. Like, you have to guarantee your scope three supply chain for me. So, like, how are we dealing
Speaker 3:with I'm not taking that on from you. I mean, that's that's something you wanna buy with your brand new server is the the long tail emissions Exactly. And you want someone else to do that.
Speaker 4:Yeah. Yeah. I think there's gonna be push and pull there. It's gonna go to the OEMs and whatnot. Certainly, they can't burden it.
Speaker 4:So I think it's gonna be an awesome opportunity for the data center operators to be like, guess what? We created a program, and you can, for only $100 a month per rack, we will put on your, you know, end of life protection program, right, which is works with these 10 OEMs, and we take care of it in a sustainable way, and we know that it's not gonna end up in a landfill. Like, we know that it's not gonna just get trashed by some random provider. It's an awesome opportunity.
Speaker 3:In the bucket of they need more help. Right? Again, we go to hyperscalers. We had companies like IT Renew, which I think was the one you guys were talking about with Iron Mountain. You know, did a great job taking hyperscaler three year refresh stuff and turning it into valuable bits for enterprises because they're like, cool.
Speaker 3:It's like half price, you know, three year old stuff. I love it. That's not the growth of the future, right? That's an important part of the supply chain, which is fairly homogenous, right? And yet, as we look again at the kind of the rest of it, which I think the rest of it is not just like, you know, a dog's breakfast.
Speaker 3:This is actually really valuable and we can create thousands of companies innovating with technology. They're going need lot of help to do it, right? Not just from a regulatory standpoint, but they got to move faster, right? They got to be able to take advantage of that H100, you know, and, you know, whatever, right? And so I think there's a lot to it.
Speaker 3:And, you know, my general sensibility on it, Greg and Alex, is that at some level, every enterprise becomes a service provider or has one within them or borrows one from someone else to do their thing technology wise at scale. And that's going to include a lot of this efficiency, circularity, sustainability stuff, because you're going to have to be expert at it in order to lead the market in it. If it's not important to you, you're gonna push on someone else and hope it goes away. I don't think that's a long term option, you know, long term Five years. Yeah.
Speaker 3:Ten years max. Right?
Speaker 4:And and so the last little change I wanted to point on there related to the circularity aspect was the business model shift. Right? That's gonna it's already happening with OEMs who are coming out with as a service offerings, which means they own the asset. So now they're much more attuned to, well, how do I retrofit that piece of hardware versus trying to sell a new piece of hardware? How do I extend the life of the asset versus trying to give you the new model every year?
Speaker 4:You can see the whole way that our industry works is like, yeah, all that stuff I sold you last year. Yeah. That's no good. This year's model is the best. And I look at like the most staid, you know, industry in the world, like automobiles who has like, how many different ways can you choose to utilize an automobile?
Speaker 4:You can buy one. You can lease one. You can finance it. You can get it via Uber. You can get a rental car.
Speaker 4:Like, they even have, like, subscription programs from a couple of companies. Like, there's lots of ways to, like, have access to an we have, like, one way to get access to a server. It's either, like, cloud or, like, buy it. And so now we're starting to see this whole, like, a little bit of a subscription model, HPE GreenLake, Dell Apex, cool. That means those OEMs are gonna care a lot more about how it's made, how I can take it back, how long I can use it for, you know, how I, you know, the refresh cycle.
Speaker 3:And then that will also push to
Speaker 4:the silicon manufacturers who currently do not have kind of any node I don't think any of them have subscription revenue of node on their P and Ls when they report their quarterly revenues. But, like, eventually, wouldn't we want, you know, Intel, NVIDIA, AMD? Like, they sell you access to their IP, you know, processor or whatever. Like, wouldn't it be great if they actually made more money if you used it longer? Like, right now, they they make less.
Speaker 4:Right? Because they can't sell these on the new. And, like, that is, in my opinion, the big shift that will have to happen if we want circularity to become real. Like, we can't we can't overcome those kind of the industrial logic of the major part of our industry, silicon and OEMs, not having a subscription model. They they gotta move to that.
Speaker 4:And if they do, like, it's gonna change the entire and I think data center industry has a huge role to play in that because who's go we already know how to do monthly billing. We already know how to put it in and out in theory in places. They're probably ending up, you know, at our at our physical spaces. And so there was a real partnership that I think could happen to re to remake how the industry works and think about, you know, the revenue models. Right?
Speaker 4:And the services. And this is what it has to be. It has to be extra services because I doubt high margin silicon businesses want to take on cheap financing as their their new model. Right? Yeah.
Speaker 4:So they're gonna have to, like, have a new lever. Right? More value versus just, like, more financing.
Speaker 3:Yeah. Yeah. I was gonna add one one thing that we talked about taking things out. Sorry, Alex. But, you know, makes me think about that little opening around open nineteen, which is now called what's that?
Speaker 3:What's open nineteen?
Speaker 4:It's sign, man. Sustainable skillful structure. It's a sign. Yeah. No.
Speaker 4:It's a sign.
Speaker 3:You know, the way Open nineteen
Speaker 4:started yesterday, Alex. So it's just yesterday. All
Speaker 3:business. Breaking news. Breaking news. News. You heard it here first.
Speaker 4:Everybody stop. The data center open source thing has changed its name. Dinner table conversation at seven.
Speaker 3:But I always found it intriguing that, you know, kind of Genesis, you know, for LinkedIn and Evolve and Open nineteen at the very beginning, I think the trajectory of that particular project, I'm going to dumb it down because I'm just a marketing guy, but like get rid of the cables basically. So you can slide stuff in and slide it out, which makes it a lot easier. I mean, oh my gosh, the beautiful cabling that is done. That's a work of art. You can't undo that.
Speaker 3:I mean, there's all kinds of gravity around like, just put it in and leave it there and don't touch it, monetize it, sweat it, make it last as long as you can. Some of that's okay. But like, as we think about how to make technology, which would you say like 70% of it's like making the thing and
Speaker 4:getting it think it was an idea
Speaker 3:where a study. Getting it from China to Mexico back to Taiwan and then over to Sweden where it lives. I think that's where most of our Okay, how do we make that more efficient too, you know, and move things around?
Speaker 4:Three hours is just Reduce, reuse, recycle. The middle one is the best. Like, if we could just I take
Speaker 3:think that phrase is actually kind of of the vintage of Greg's t shirt.
Speaker 2:Oh. It is.
Speaker 3:Yeah. Reduce, reuse, recycle. Right? You know? And dare.
Speaker 2:Ask me for a cable that they can't get because they shipped everything to a data center. Right? And they're missing this one cable, and it needs to be installed.
Speaker 3:One thing.
Speaker 2:Who they do from, you know, god knows where to set up servers. So mean, I Yeah.
Speaker 3:Reduce, reuse, recycle. Right? And I think that that that certainly holds true for this problem. We just had kind of an interesting pressure because everyone that sounds good until suddenly it's like, oh, it doesn't matter. I have to do generative AI right now no matter what, make it go.
Speaker 3:And, you know, I think we have to, again, offer up solutions that are holistic, and and we have to solve those challenges as an industry. I don't think that we're just gonna expect our enterprise customers to do it, you know, on that side of the house. Anything on hyperscale is totally different.
Speaker 1:Yeah. The regulations come in, the mandates come in, the the natural evolution of the the technology comes with it. Zach, name rebrand aside, anything else you wanna share about SSI? Give us a little more color into the mission of the organization.
Speaker 4:Totally. So it's project within the Linux Foundation, and, you know, these challenges it's focused on kind of standards, creating standards, first and foremost, within the rack with Open 19, which was how to have a more efficient rack deployment model. So computers, power, shared power shelf. You don't have to put two $600 power supplies in every server with tons of copper. You can have one power shelf.
Speaker 4:How to reuse sheet metal so you don't have to, like, throw out the entire chassis just because you wanna upgrade the CPU. And shared cabling. Right? Which is more efficient, kind of blind mate connected cabling. And so we started there.
Speaker 4:And what we found out through years of going through this was that there was really a need for an open source community that was not hyperscale dominated. And I don't mean that in a bad way, I just think like the needs of somebody who buys a million servers a year are just super different from somebody who buys like, 5,000 servers a year. And we we found the need for a community come together around these challenges and problem sets. What I think is so cool, and I can learn this from my time in open source and software, which is easier in a lot of ways because you can collaborate with basically a zero cost basis and creating castles in the sky. It's very different when you're innovating on physical hardware standards, power, cooling.
Speaker 4:We we recently finished the v two spec, which focused on aligning with OCP and the industry around something as simple as the coupler size and location of liquid cooling cables. Right? Like, so we don't keep moving them from side to side. So we don't, like, have different ones. So that way, like, across the world, you could go into a data center and they wouldn't bar you at the door saying no liquid allowed.
Speaker 4:Right? You can't bring a coffee cup in and somebody wants to bring a vat of some weird chemical. Right? You know, like and so, you know, I think, like, these these issues that we worked on actually showed this need for and and and kind of very inspired by open source software that the diversity of constituents in a very dispersed market from silicon manufacturers to OEMs to data center financing to, like, operators to cloud people to end users who never really have a great forum for coming together and figuring out, like, well, should we put the liquid cooling two phase coupler on the left or on the right? Like, should it be this size or that size?
Speaker 4:Everybody has an opinion. Like, everybody's got one. But can we agree? Because, like, we know that if we can agree on a standard or a set of them, it'll all, like we'll be able to roll out, say, liquid cooling or heat captured systems, you know, to the vast majority of data centers. What's that?
Speaker 4:Yeah. Betamax. Yeah. It's just what it is. Right?
Speaker 4:It's like, we just work off of one? And Open 19 is a little bit different than OCP because we don't require any of our members to kind of contribute and open up all of their own IP. So whatever you put inside the server, it's up to you. So like, you know, super micro who participates doesn't have to open up all of its, you know, special board designs and whatnot just to participate in a form factor discussion. So that's really powerful.
Speaker 4:I think there's more to do. We've, we have that's that's why we rebranded the organization to SSI, which is we think it's more than just the standard related to to rack level hardware. So some of the ideas that are being incubated right now are things like reusable packaging. Right? If servers are all kind of the same size, why do we basically package them up?
Speaker 4:And then the second they come into a data center, we throw out all the boxes because the data center operator is, like, get rid of all those boxes. It's fire hazard. And then we plug in all the servers to find out, like, five of them don't work and we have no boxes, and we can't ship it anywhere. We can't get it back. Very inefficient.
Speaker 4:And so like the amount of waste we have just in packaging, just imagine if we could bring a standard or reusability around that. Right? Similarly related to some of these challenges on, you know, how do we describe data destruction? How do we change SLAs to support liquid cooling? Where does it start?
Speaker 4:Where does it stop? Could we work on one, you know, as an industry and come up with a way that would work for all of us versus trying to all recreate and negotiate and figure out, like, does the SLA stop at the rack? Does it stop at the breaker? Does it stop at the, you know, building system? These things, like, we'll do way better as a community of diverse constituents.
Speaker 4:So, yeah, super excited about leveraging that for further work. I'm no longer the chairperson. Chairman Zach is you know, it's held by somebody who is a member company, which Equinix is. So my Trong has taken over that with Chris Lilligian Stopel from Cisco, and I'm just a independent member helping to, you know, push and prod and move it along.
Speaker 1:So still very much a part of the the movement. We're breaking news here. We've got the Open nineteen rebrand, and Greg Moss, not a fan of Betamax. Greg, I told you, I moved to Laserdisc a long time ago, dude. I
Speaker 3:catch up. Long time. Super. If you guys ever have a, you know, if you ever have a spare moment to listen to someone else's podcast, you know, I mean Go. This one aside.
Speaker 3:Right?
Speaker 1:Of course. Gotta Stop. Right.
Speaker 3:Research. But there was a there was a a podcast with Planet Money in 2000 whatever '17 or so did a podcast about going to space because, you know, they were doing something about, you know, the space industry and whatever and getting uncovered the CubeSat project, which, you know, started out like Berkeley with a project, but long story short.
Speaker 4:Stanford. Yeah.
Speaker 3:Stanford? Okay. Berkeley, Stanford, very close by. But either way, the idea of collaboration and form factor and simplicity, so you can say something to space, kind of been around for a long time. And, you know, we used to joke that it's easier to get a, you know, a satellite into space than a server into Singapore.
Speaker 3:And in some ways, it's true, which doesn't matter if you're doing it once and just leaving it there and it's not super important and you can plan it a year or two out or whatever refresh cycle you got. But if it's like more urgent slash dynamic, which I hope it will become so, so we're not just over deploying and hoping someone buys it, right? This kind of like standardization at industry level is super impactful. And I think working with, you know, between OCP and SSI, know that kind of stuff. It's just you know it's really critical.
Speaker 4:Dream was always within Open nineteen, our dream Greg was always like, could you get plus one new server into a market for, like, $20 and a and a shipping cost? Like, so that way you could just in time gear when you needed it. Or if you could move it because it's no longer being used over there, but you could move it over here and extend the life. Yeah. Like, those things would be huge for our industry.
Speaker 4:But right now, it's so onerous to put something in or take something out. You just don't do it. Right? It's too hard.
Speaker 2:And that's why the standardization, it plays such a critical role.
Speaker 4:Yeah. Like, is it a slot? You know, I I wasn't really inspired. I had learned a lot from the early days of the telecom industry when I think it was probably the Bell system got rolled out in The US where they're building a central office in, like, every town of America. Well, guess what they did?
Speaker 4:They standardized it and made it all feel the same. So they could train an army of technicians who knew how to service it, who could go into it, and we don't have that. Like, we need some standard form factors, especially as we move to more advanced systems like liquid cooling. How would we possibly train and support the data center techs who would be like, hey. So I just got here, and I'm on remote hands call, you said I should, like, fix the RAM disk, but there's all these weird cables coming in and out with fluid.
Speaker 4:Like, which one do I pull? Right? Like, you know, like, they're gonna say I don't know.
Speaker 3:It's just
Speaker 4:a WhatsApp chat, though, isn't it? Oh, it's a WhatsApp chat. Yeah. It's WhatsApp though.
Speaker 3:Yeah. It's
Speaker 4:And so, like, I think that, like, we need some standards just, like, for the mechanical side of just our industry training, getting people comfortable with. Mean, I I remember first time at Equinix, walked in with some liquid cooled servers. Like I got an escalation from the head of facility operations globally saying like, our team is not okay with you having it. What we ended up doing was doing a training program, walking them through, you know, it was dialectic fluid, so it evaporated. Like we showed them how to service it.
Speaker 4:They needed a lot of support so they could feel comfortable, you know, because they were accountable for maintaining that facility. Right? It's just interesting, you know, how much work that we need to do as a community. So we've also just thought about training and documentation as something that SSI can produce for our industry to help accelerate the adoption of liquid cooling in particular, which I think is going to be quite important towards our sustainability goals. You know, all You think know, about
Speaker 2:liquid cooling is something that Alex and I have noodled on for quite some time now, right? Because there's this back and forth on, you know, immersion versus chip based cooling like a zoo decor. Right? And it's it's a super Max
Speaker 4:versus versus
Speaker 2:Yes. Yeah. Yeah. Is immersion the Betamax? I don't know.
Speaker 4:Yeah. Well, we want
Speaker 3:the LaserDisc one for sure.
Speaker 4:And then the Slim Yes. One for sure. Then
Speaker 1:It's more difficult to store, but still So I
Speaker 4:think that there are, like, there's a lot of different technologies out there right now. They all have their pros and cons. You know, I think we tried to work and we worked through significant amount of these religious battles, right, during our Open nineteen v two working groups, which were every Thursday, nine to eleven with a bunch of mechanical and fluid engineers on the phone talking to each other. But what we ended up doing was just backing out to where we could agree on, like, coupler size across single and two things. We could agree on flow rates from a building system.
Speaker 4:We could agree on, you know, certain parts that, hey. We need to build twenty year infrastructure around these components. These other things are gonna evolve much more, you know, rapidly. And I think that I think I wouldn't be surprised, Greg, that over time, I wanna get a little weird here, but, like, I don't think we'll have form factors of servers look at all how they look today. Imagine instead of servers that look like 19 inch rock things that you have to be able to put in any IT class in the world.
Speaker 4:Well, why not just have, like, a cartridge that's fully enclosed liquid thing that you put in a slot? You know? Like like a video game. Like a Nintendo cartridge. Had to blow it at first and put it in.
Speaker 4:Know? But, like Yeah. Why why not a totally different form factor for fully immersed? Right? Only because it's too hard for us to work as an industry right now.
Speaker 4:We don't know how to do it. And I I do believe, that we together in a community driven way can move to innovate and say, hey, that's possible. Okay. Most computers are never gonna be touched by a random enterprise. They're gonna be done by a service provider, and we have, like, the 10 biggest data center service providers all hanging out working on this thing.
Speaker 4:Like, we could probably come up with a way where this worked for everybody. And then we, like, wouldn't with all of our, you know, regulatory environmental, you know, fat in the market and made that happen with certain OEMs. Like, it's it's actually what's funny about our industry is actually pretty concentrated. Like, 10 business owner builders, OEMs, three silicon people. You have basically the whole industry.
Speaker 2:We all know each other.
Speaker 4:Yeah. It's, like, not very big, but we just don't have a good I'm actually excited to be, you know, outside of Equinix because now I can work with other data center operators. Actually, they were a little shy about coming together. It was in a good way. We're like, hey.
Speaker 4:We get Equinix and DLR and Databank together to talk about how we're all gonna do this. And they were like, oh, definitely not. We're not doing that. And I was like, why not? You know, in the software, we're used to that, actually, right?
Speaker 4:We do it all the time. And I think in data center, we don't really have that habit. And so I think getting along that, we've seen a little bit like what Dean's done in infrastructure Masons has been a good example. Need We to practice those more because together we have that we can make it work. We have a lot of really smart and passionate people who all care about, I believe, the same outcomes.
Speaker 4:Yeah. We just don't have great great mechanisms for making it happen right now.
Speaker 1:A bit of a segue, somewhat. Cloud obviously has come up a bunch throughout this conversation. We certainly support our customers on a number of different cloud deployments. Was reading the journal, it could have been last week or last year. I think this article quoted that two thirds of technology leaders were not seeing the return they expected from their cloud investment, and therefore seeking more flexibility.
Speaker 1:Frankly, this kind of supports, Greg, what we're doing with our customers and and how we often find ourselves advocating for a hybrid solution. Mhmm. I'm curious how this idea of sustainability in the data center relates to cloud or hybrid? Is there anything that we can be doing, given our close connection with our customers, to better emphasize efficiency in that strategy?
Speaker 2:Before I have before I have the Smith brothers answer that, I wanna add to it.
Speaker 4:Because we will talk for ten minutes and not let you ask any more questions.
Speaker 3:Good story.
Speaker 2:We need content. Give us more. We want more minutes. You know, I've always pushed, and this is one of the things I loved about Equinix is that you guys ultimately fell into a position of true hybridization, right? You had this fabric, you had the metal, you had the colo, all these fun things.
Speaker 2:We've been advocating hybrid for a long time. So you have these small companies that are saying, I think I wanna go to the cloud. Right? And they finally get there and they realize it's 30% more expensive than it should be. Right?
Speaker 2:So where do they really belong? But but then they're gonna lose these efficiencies we all talked about. Right? Because they're not following certain guidelines. You know, what's the right thing for them to do?
Speaker 2:Do they go into a less economic environment, right? For them, that's more, I guess, sustainable from a green standpoint? Or do they stay where they are and go into a hybrid environment? I know it's kind
Speaker 4:of weird.
Speaker 3:Lay down on my couch and tell me about your childhood. Right? I mean, I think it's a it's complicated, and it is expensive to do various things. I'll give you my perspective. Zach can correct me on all the things he thinks I did wrong.
Speaker 3:But first of all, think cloud is an experience, not just like product called public cloud, which we understand as an industry very well, but customers are like, give me that thing where it all works better, faster, and my developers are happy, right? And someone else deals with all the stuff. I think operated infrastructure and operated services are pretty, you know, important when you just can't do it fast enough or great enough yourself. Now, if you can have that cloud experience and have some of your other choices with it too, like, oh, I needed locality, or I want it on different hardware with a different cost basis, I want to own some of it, I want you to lease it to me, you know, OEM, whatever. Hybrid, right?
Speaker 3:I think, sure, yes. And I think a lot of customers would say, yes, please. Actually, I demand it, but they're probably not going to go backwards on the experience of cloud. Cloud has provided a whole sense of automation and resiliency and global access and all these great things, ecosystems that people don't want to give up. And so I think that to me, that cloud just goes everywhere.
Speaker 3:The experience of cloud, if we do our job right. And then it becomes like, well, what kind of opinions do you have that you want to prioritize? Could be about economics. I think that's the least interesting one of them. Although, of course, it's real, but there's a lot of costs baked into infrastructure that's more than your cloud bill, and I'm not making an argument for public cloud as expensive or cheap, depends on what you're doing, right?
Speaker 3:Depends how good you are at managing it. But, you know, worked with a company last year that had major relationships with each public cloud and also a major global deployment in their own data centers. And they had close to 50 people managing procurement for their own data center stuff. And they had one person assigned to each cloud. That was pretty good, clear economic incentive.
Speaker 3:Didn't have anything to do with their cloud bill, obviously. Do they have the people? Are they keeping, you know, what kind of expertise are they having in their company? What does it cost for them to do something? How quickly could they respond to an opportunity?
Speaker 3:So I think it's super nuanced and the kind of cloud repatriation economic angle to me falls a little flat. I think it's real and economics for things you really care about that you're building your business on, you know, that's like obviously critical. Okay, Zach, correct. Correct to Jacob.
Speaker 4:Well, was gonna put two things. I totally agree. The first one is that for most people, I think cloud is really what I saw with enterprise really about digital transformation, which I used to hate that word. I was like, oh, that's just word salad. Right?
Speaker 4:But actually, it's it's like a real, like, process people go through. They're they're investing in the digital, like, bones of their company and getting to a point where they can leverage off of kind of more automation or I'm going to call it primitives that are highly automatable and global really helps with that, right? Helps with the transformation and the people and the capabilities of a large company. And I think that's pretty different from like most people's IT, right? Moving into a place where technology is our weapon versus it's our cost driver.
Speaker 4:So I think that's a big part of why people go and use cloud. And so I don't think it's as easy as thinking about hybrid because you have to think like, is my organization ready for that? Do I have the tools and capabilities to do that in a hybrid manner? Do I have the is is my service provider, what I'm gonna do in on prem or in outsourced colo or something like that, able to deliver that to me, or do I have that internally? Because my real goal is to get developers to have cycle times of a week versus a year.
Speaker 4:That's my real goal, maybe.
Speaker 3:Yeah. Other related related goals there that we talked about for the previous hour, you know, whereas you wanted someone as a service provider to manage your problems and opportunities related to sustainability or security or whatnot. And so I think hybrid for sure is the way. The question is who's helping you do it? And how much are
Speaker 4:you doing? That was my next point.
Speaker 2:Going into a single environment, how are they gonna struggle to get? I understand it is a challenge. And Jacob, just to correct myself, I mean, I didn't explain myself correctly. I was referring more to the big three, right? It gets really expensive, but there's a whole layer of these secondary cloud providers, right?
Speaker 2:Like whether it's DEFT or High Velocity or whoever, right? Do a really, really good job at exactly what they're doing. They may not have every bell and whistle, but the cost basis is substantially lower.
Speaker 3:Forget if it was AMD, Zach, back in the day, a couple of years ago, I used to really think about specialty cloud providers, right? Like I said, right now we're like the public clouds and the tier twos and that's kind of the industry parlance for like, how big are you? And I think we might see, you know, the mobility and the telecommunications and the various, you know, the AI clouds, you know, just as much as we will, the sort of big guys and small guys. And, you know, that's a prediction. We'll see if it happens, but.
Speaker 4:I think it's absolutely going to where specialized cloud MongoDB Atlas, e g, the database cloud is a big business now, and people rely on it. And, like, I want that expertise of that one thing versus, you know, the kind of the overarching one stop shop. Right? And I think people are getting much more comfortable with that. They already do a security, like, with Akamai or Cloudflare.
Speaker 4:You know? And and and I think that it's gonna become more and more common. The second point I was gonna make was around global. I think we in our industry do a really poor job, and I'm gonna use the the the whipping boys and gals of data center and and OEM. If you wanna most companies I've worked with over the past couple years think in a global lens.
Speaker 4:Right? With technology, they're thinking everywhere. My customers are everywhere. My users are everywhere. I I need to have the flexibility to be kind of everywhere ish.
Speaker 4:But data center companies sign contracts with you and assign sales reps, like, on your local and where the data center is. Like, it's all very localized. It's super as if we're gonna roll up in our pickup truck and rack and stack a server in the rack. Like, that's gotta change. You gotta think globally.
Speaker 4:Right? Which means global contracting, global usage, portability, single account team, like US dollar pricing and hardware.
Speaker 2:Same deal.
Speaker 4:You know, one bill. Like, one bill. Right? Like like, these things are such a burden, like, because we haven't evolved the way we work to be global. Like, we're still thinking, like, well, I got my sales team for the Northeast using the thingamajiggers, and we're gonna, you know, assign you there.
Speaker 4:And it's just not, like, how I think most companies are acting. So cloud has done that. Cloud is, like, really good. I always thought that most of what I've done in my career of cloud and hosting has not been turning computers and networks on, but has actually been metering, billing, global contracting, and consumption models. And that was, like, the actual thing that we worked on almost all the time, which is why, Greg, you know, the billing systems and metering systems and the invoicing things, like, to make that happen.
Speaker 4:And I think the second part of that, you know, is just the kind of experience and and self consumption model. Right? That whole PLG concept, product led growth, e. G, the user, the human, the creator, the developer, the sysad that needs to have access, you know, to things is still a gate right now. Like, the whole zero to nine months to be able to put a rack of computers in Sydney is a total buzzkill to somebody who is, you know, paid for innovation.
Speaker 4:Right? Like, yeah, what did you ship this month? It's like, they're gonna go somewhere else where they're gonna happen. Yeah. And negotiating, like, a three year term on a something or rather so I can try it out, this is a nonstarter.
Speaker 4:And so we're gonna have to, I think, as an industry, do some work there between OEMs and data center companies, which currently, you know, frankly, it's just kinda like running through a barbed wire fence. You wanna go global.
Speaker 2:Yeah.
Speaker 4:That's not very fun.
Speaker 1:Not not fun. So so I hear. We have a lot of technology leaders listening, owners of IT budgets. We've covered a lot of ground. I think, Greg, in fact, we're gonna need another onion because this one's pretty well well peeled, but not a tear in any of the eyes on this podcast, which is a good sign.
Speaker 1:Why don't we go in reverse birth order? How about that? One piece of advice for the listener when it comes to sustainability, and be it the data center or more broadly.
Speaker 3:I got it. It's easy. It's I mean, Ted Lasso gave it to me last night. It's
Speaker 4:so easy.
Speaker 3:It's like curiosity. Right? You gotta be curious about these things, not just try to get rid of them. And so whether it's sustainability or the evolution of technology, like AI developers, software, open source, these topics are not going away. Be curious.
Speaker 3:Right? Be curious about how they work, how they could work, set aside. I mean, I always used to give advice to my clients when I was in the consulting business. It's like, you don't do it all the time, but how about like an eighty twenty rule or seventy thirty? You know, make sure that you're spending 30% of your time being curious about things that probably don't make sense to you right now, but are gonna be an important part of your language and your tomorrow.
Speaker 3:So Ted Lasso says, be curious. He was just quoting Walt Whitman, so we'll go with
Speaker 4:that. I would play a little bit off of it and say, like, listen. There's no silver bullet. Nobody's got this figured out. Right?
Speaker 4:And so let's lean in as a community. Most complex, problems we can solve together. And so find the right partners, create open forums, join organizations where you can talk about it, be a little bit vulnerable. Like, you don't have all the answers. That's okay.
Speaker 4:No does anybody else. But we can learn from each other, and we can probably do better together. And so finding those partners and ecosystems that you can kind of invest some of your time in, as Jacob's putting, maybe it's your 10%, your 20%, maybe your five. Like, you put it up there, you put it out in the universe, and you spend some time with people who also are thinking about it in open and vulnerable way, I think we'll move the ball forward.
Speaker 1:Leave it to Zach and Jacob Smith when asked for professional advice to give us life advice. I don't know I don't know where else
Speaker 4:we can much easier. Jacob is three years late to Ted Lasso. So I
Speaker 3:was gonna ask. I'm, like, totally late.
Speaker 1:But it's not a new against coming Right? Are you gonna go to Twin Peaks next? Is that next Yeah.
Speaker 4:That's that's a great idea, actually.
Speaker 3:Let me take some notes here. Hold on. Start soon.
Speaker 4:But, you know, in all seriousness, I've been saying being bullfish is Jacob, actually. Jacob's been looking at me like, what?
Speaker 2:I was excited to go for the next time you were gonna be joining us. It was pretty cool. And, Zach, I miss us. I miss us.
Speaker 1:You guys go way back. Way back. This doesn't have to be the last time you see each other or we we talk in the podcast. It certainly helps.
Speaker 4:I'm pretty sure I I knew Greg when he had some some hair on his head.
Speaker 1:I did. That's I did.
Speaker 4:Now that's
Speaker 2:Steve Callahan, but I did have some hair on my head.
Speaker 3:Well, not that much candy.
Speaker 4:You know?
Speaker 1:With hair. That that should be the logo for the Upstack podcast. Well, Jacob, Zach, thank you very much. It's been an honor to be with you both. And our I think our first four person podcast went pretty well, I must say.
Speaker 1:Yes. And as always, we're scratching the surface here, because the onion's gone, so I'm turning to a surface. But, we look forward to picking up the conversation, watching as sustainability efficiency continues to evolve within the greater industry, not just data center. Things are happening. Let's pay attention.
Speaker 1:Let's be curious, and let's tune in to the next episode of the Upstack podcast. Thanks for listening, everybody. Thank you for listening to the Upstack podcast. Don't forget to like or subscribe to the show wherever you get your podcasts. We'll see you next time.
