Hyperscale Data Center Evolution: Power & Development Shifts

[00:00:00] Speaker 1: Mike Netzer: Welcome to the Data Center Hawk podcast. I'm Mike Netzer, joined as always by Data Center Hawk, founder and president, David Leggett. David, how are you this morning? David Leggett: I'm feeling great, Mike. How are you? Mike Netzer: The redness from your face has subsided since our suffering earlier today. David Leggett: That's terrible. Mike Netzer: I know. David Leggett: That's a great way to start this podcast. Mike Netzer: Hey, you know what we're talking about today? It's a buzzword. It's called hyperscale. David Leggett: Oh my gosh. Mike Netzer: And I'm calling this the hyperscale evolution. So as we think about hyperscale, Mike Netzer: it's a term that many people know. Mike Netzer: Yes. Mike Netzer: And as many people know, this podcast is hopefully educational and informative for you as you are listening. Just know if we haven't mentioned it before, we have a ton of other information. We actually did a whole series on hyperscale a couple of years ago that is kind of evergreen content, just to kind of orient you to the ins and outs of the hyperscale data center space. Obviously, a ton more information on our website. We'd love to connect with you there, datacenterhawk.com. [00:00:56] Speaker ?: Mike Netzer: Yes. [00:00:56] Speaker 1: Mike Netzer: But for today, we're going to talk about the hyperscale evolution Mike Netzer: and how those groups have changed over the last 10-15 years. [00:01:03] Speaker ?: Mike Netzer: Yes. [00:01:03] Speaker 1: Mike Netzer: And as most people know, they are the elephant in the room when it comes to the data center space. We'll kind of talk about some of the statistics behind that. But it's groups that people are very intent on understanding how they operate. Mike Netzer: Yes. Mike Netzer: Given, you know, the large impact they have on the space. Mike Netzer: Yeah. Mike Netzer: So I thought we'd start with really just defining what are we talking about when we say hyperscale. Mike Netzer: Go ahead. Mike Netzer: If you think through the entire universe of data centers, Mike Netzer: all data centers globally, whatever. Mike Netzer: And you kind of split that into two groups. Mike Netzer: Yes. Mike Netzer: One group being what we might call co-location or groups that are building Mike Netzer: data centers to lease them to other people. Mike Netzer: The other group would be groups that are building data centers for their own use, Mike Netzer: or self-building, self-performing, have whatever your term de jure is. Mike Netzer: Within that group that is building data centers for themselves, Mike Netzer: you have banks, hospitals, government agencies, technology companies. Mike Netzer: And a subset of that group are the ones that are building at large scale Mike Netzer: or hyper scale, as we might say. Mike Netzer: Oh, there it is. Mike Netzer: That's where the term comes from. Mike Netzer: There it is. Mike Netzer: So, you know, what five, 10 years ago may have been 10, 20, 30 megawatt data centers. Mike Netzer: Now it's gigawatt campuses. Mike Netzer: And again, we'll talk a little bit more about how we've gotten there. Mike Netzer: So when we talk about that and you apply that definition, that measure, Mike Netzer: you're talking about probably 10 to 15 companies. Mike Netzer: Yes. Mike Netzer: And really probably five or so that are even distinct within that group Mike Netzer: that are building data centers at the largest of scales. Mike Netzer: Yeah. Mike Netzer: So that's kind of the definition we're working from today. Mike Netzer: So let's talk a little bit about how this group really came to be Mike Netzer: and how they evolved kind of into kind of some distinct eras. Mike Netzer: I think if you use broken out, there's kind of some inflection points and growth Mike Netzer: growth phases within that group. Mike Netzer: So talk about really how we got here. Mike Netzer: What's the initial kind of start of that hyperscale group? [00:02:52] Speaker 2: Mike Netzer: Yeah. Mike Netzer: And I'd point out before one thing you said that I think is a good reminder, Mike Netzer: which is our space is unique in that it is the largest demand comes from a small Mike Netzer: amount of users, and so you know, it differs from other commercial real estate asset Mike Netzer: classes in that way. Mike Netzer: There's not and there's typically smaller amounts of large requirements in a market, Mike Netzer: in the office market or in the industrial market, but in the data center space, it's Mike Netzer: it's even more pronounced. Mike Netzer: Yeah, because of the size and who these companies are. Mike Netzer: So that's one thing just to I think for people that are on the fringe of the industry Mike Netzer: trying to understand, that's one thing that's really important to understand, Mike Netzer: because that impacts things like pricing. Mike Netzer: It impacts on the leasing side. Mike Netzer: It impacts where they go. Mike Netzer: There's a lot of different things, because that's the first thing. Mike Netzer: Second thing is one of the challenges people have with understanding Mike Netzer: our space is these 10 to 15 companies and their relationship between Mike Netzer: self-performance, so going out and buying a piece of land, Mike Netzer: building on a piece of property and then operating that property over a time period, Mike Netzer: and then also leasing capacity. Mike Netzer: And so there's this relationship between the two. Mike Netzer: And it's a really important thing to try to get your arms around. Mike Netzer: And there's a couple of things I would mention. Mike Netzer: One would be there in the 20 years I've done this, Mike Netzer: questions I get all the time for people that are coming into space like, Mike Netzer: what happens if these companies decide they just want to do it themselves? Mike Netzer: That's a reasonable fair question. Mike Netzer: Yeah. Mike Netzer: You know, we just haven't seen that. Mike Netzer: In fact, we've seen the opposite. Mike Netzer: And I've got the numbers to back it up, Mike. Mike Netzer: Oh, do you? Mike Netzer: There we go. Mike Netzer: Do tell. Mike Netzer: We're a numbers company. Mike Netzer: Here we go. Mike Netzer: So, you know, and I probably should have gone back further than this, Mike Netzer: but these are the North American absorption numbers for the last four or five years Mike Netzer: that we tracked. Mike Netzer: So in 2020, again, this is kind of in the heart of all the pandemic stuff going on. Mike Netzer: 857 megawatts of leasing. Mike Netzer: And pre-leasing is included in this in the North American market. Mike Netzer: 2021, 990. Mike Netzer: 990 megawatts. Mike Netzer: 2022, we're going to switch to gigawatts. Mike Netzer: 2.27 gigawatts. 2023, 4.13 and 2024, 6.79. Mike Netzer: So you can see the significant increase of leasing that's happened in the space. [00:05:15] Speaker 1: Mike Netzer: And it's primarily driven by the hyperscale group. [00:05:17] Speaker 2: Mike Netzer: Yeah, absolutely. Mike Netzer: You know, the hyperscale group is driving that. Mike Netzer: Now, I will say the enterprise market continues to grow and is certainly not slow, Mike Netzer: but but that is what is driving those numbers to the to that level. Mike Netzer: In the same in the same time, these hyperscale companies have been buying land and Mike Netzer: growing on their own as well. Mike Netzer: And so so I just just to kind of Mike Netzer: maybe level set people's expectations. Mike Netzer: There's two things happening right now. Mike Netzer: And and I don't really see a significant shift in either. Mike Netzer: I know there's been some market news lately about Mike Netzer: groups, maybe changing their approach, whatever that's pretty normal Mike Netzer: in the ebbs and flows of of the data center space. Mike Netzer: You know, we've been in a period of time where it's been like Mike Netzer: grow, grow, grow. Mike Netzer: And I guess if you're in it for the short short term, Mike Netzer: you know, if you've been here for a little bit and you you are, Mike Netzer: you know, highly you're paying attention to these the you know, Mike Netzer: the news, which is good to do. Mike Netzer: You know, I think that can be more acute. Mike Netzer: I think if you like look over the long term, Mike Netzer: you know, some of these some of these announcements Mike Netzer: and things once once they kind of settle out, you go, OK. Mike Netzer: And I think that's what we've seen over the last couple weeks to month of Mike Netzer: you know, dealing with some of the news that's been in the market around Mike Netzer: changes on on approach. Mike Netzer: But what I would like to do, Mike, is talk about some of the Mike Netzer: changes around the hyperscale companies Mike Netzer: owned strategy, their self-performance strategy. Mike Netzer: I would like to identify a few of those. Mike Netzer: Talk about maybe where that is today Mike Netzer: and what that might look like moving forward. Mike Netzer: Because I think that's a big part of the market that that if you're Mike Netzer: if you're listening as an investor, you're listening as a Mike Netzer: someone that's trying to sell power land. Mike Netzer: We've done podcasts on that. Mike Netzer: Like there's an opportunity for you there. Mike Netzer: But I think understanding Mike Netzer: the different and to be honest, Mike Netzer: even the those that are leasing capacity, Mike Netzer: those that are, you know, data center operators that are going, Mike Netzer: Hey, we want to build it. Mike Netzer: We want to go buy land and build the campus. Mike Netzer: And we have the operational Mike Netzer: know how to convince these companies Mike Netzer: to sign a lease with us. Mike Netzer: You know, this is really important too. Mike Netzer: Yeah. [00:07:25] Speaker 1: Mike Netzer: And when you talk about lease versus build, Mike Netzer: it's always been a dual strategy. Mike Netzer: But one of the stats Mike Netzer: we tracked for a while Mike Netzer: was kind of that lease versus build Mike Netzer: kind of dynamic. Mike Netzer: Yes. Mike Netzer: And so I think this was an interesting status. Mike Netzer: I think in 2017, there was roughly 70, Mike Netzer: 65 to 70% self-build and 30 to 35% lease. Mike Netzer: Okay. Mike Netzer: By 2022, that had flipped. Mike Netzer: It was about 60% lease, 40% build. Mike Netzer: Interesting. Mike Netzer: And I think you started to see some of those groups Mike Netzer: get a little behind as some of the demand hit. Mike Netzer: Yeah. Mike Netzer: They got a little bit behind. Mike Netzer: And I think in 2024, I haven't run this exactly, Mike Netzer: but I think it's about 50, 50. Mike Netzer: Yeah. Mike Netzer: It may have even shifted back Mike Netzer: slightly more to the self-built side. Mike Netzer: Because of some of these massive campuses Mike Netzer: that have been announced. Mike Netzer: And you got to think about- Mike Netzer: That is a kind of constantly evolving stat. Mike Netzer: Yeah. [00:08:10] Speaker 2: Mike Netzer: And you got to think about the end user. Mike Netzer: I mean, they have a really, Mike Netzer: you know, to predict IT capacity, Mike Netzer: demand and growth today, Mike Netzer: and then what it's going to be in a year, Mike Netzer: two years, five years. Mike Netzer: I mean, there's so many factors that come into that. Mike Netzer: You know, the individual company, Mike Netzer: how they do planning, companies they acquire, Mike Netzer: you know, growth and density, you know, Mike Netzer: there's just so many things that play into that, Mike Netzer: that I think it's important to realize Mike Netzer: that's a tricky thing to get right. Mike Netzer: And it's always changing. [00:08:42] Speaker 1: Mike Netzer: Yeah. And our team has worked really hard to Mike Netzer: boil all of that down into some very Mike Netzer: simple, straightforward metrics. Mike Netzer: But to your point, there is so much that goes into it. Mike Netzer: Yeah. Mike Netzer: Before a piece of land is acquired. Mike Netzer: Before a lease is signed. Mike Netzer: But yeah, this is incredibly complex. [00:08:58] Speaker 2: Mike Netzer: Yep. So here's a couple things that are worth Mike Netzer: taking away from the hyperscale own strategy. Mike Netzer: So number one is the size of well, Mike Netzer: there's been a large increase in the amount of land Mike Netzer: purchased for data center development by hyperscale companies Mike Netzer: on their own over the last four or five years in the U.S. Mike Netzer: And and I don't really see that changing anytime soon. Mike Netzer: I mean, we've we've seen, you know, Mike Netzer: in my great little sheet of paper here. Mike Netzer: But we've seen, Mike Netzer: you know, go up from 3,500 acres in 2020. Mike Netzer: And again, this is not all of the Mike Netzer: the land, but it but it's most of it 2021 4,300 acres. Mike Netzer: 2022 5,900 acres 2023 14,500 acres 2024 almost 17,000 acres. Mike Netzer: So there's just a lot of Mike Netzer: land being purchased for this type of growth. Mike Netzer: This will not happen this like the growth Mike Netzer: The building and construction will not happen this year will be over, Mike Netzer: you know, a long time period. Mike Netzer: But that's certainly worth noting. Mike Netzer: That's the first thing, the amount of land. Mike Netzer: Number two, if you're taking notes, Mike Netzer: is the size of parcels that are being purchased Mike Netzer: and and the average size, you know, in in 2020, Mike Netzer: you know, it goes basically from like, Mike Netzer: you know, 90 acres, 100 acres average to 150 acres to 200 acres. Mike Netzer: You know, now we're at 225, 250 acres average on these purchases. Mike Netzer: And so I think that's really important to Mike Netzer: to note is that the size of the parcels are getting bigger, Mike Netzer: which goes back to your strategy on like just how large the Mike Netzer: the vision has become for this. [00:10:41] Speaker 1: Mike Netzer: And if I got to issue a point number three. Mike Netzer: Oh, please do. Mike Netzer: This is my pastor outline of three point sermon here. Mike Netzer: Okay. Mike Netzer: So in 2015, those hyperscale users had 2.5 gigawatts of built capacity Mike Netzer: with about 71 percent of that being in the U.S. Mike Netzer: In 2020, that number would jump to 10.1 gigawatts, Mike Netzer: 77 percent in the U.S. Mike Netzer: And in 2024, it went to 23.4 gigawatts with 78 percent in the U.S. Mike Netzer: Globally, there's still a heavy focus in the U.S. Mike Netzer: Yeah. Mike Netzer: The growth is incredible. Mike Netzer: Yeah. Mike Netzer: And still you see like pretty hockey stick. Mike Netzer: Yeah. Mike Netzer: With far as far as deployed capacity. Mike Netzer: Yeah. Mike Netzer: Again, still a big focus in the U.S. Mike Netzer: Obviously, that's growing internationally. Mike Netzer: But the main area of deployment is still the U.S. Mike Netzer: Yeah. [00:11:21] Speaker 2: Mike Netzer: And I think, you know, actually, this brings up, if you think about the U.S. Mike Netzer: I was reading a state. Mike Netzer: This sounds so terrible. Mike Netzer: I was reading a state bill on AI legislation. Mike Netzer: You know. [00:11:32] Speaker 1: Mike Netzer: This is the hard work you're doing. Mike Netzer: Don't judge me, people. Mike Netzer: No, no, no, no. Mike Netzer: We were reading IRPs. Mike Netzer: We're reading legislative initiatives. Mike Netzer: That's right. [00:11:40] Speaker 2: Mike Netzer: One of our team members. Mike Netzer: So we actually, this is a good little sales pitch or a plug for, we have these regional podcasts we're doing now. Mike Netzer: So you and I have done a podcast for years and years. Mike Netzer: Now we have a North America team, our Latin America team, our Europe team, and our APEC team doing podcasts. Mike Netzer: And I'm telling you right now, these are really good. Mike Netzer: Like if you're in these markets, you should listen to them. Mike Netzer: I listened to one the other day from our team and I'm like learning from them. Mike Netzer: And so one of the things that was brought up was a state bill Mike Netzer: that had to do with like the self reporting Mike Netzer: that the state wants the hyper skill Mike Netzer: and the large users to do on power usage. Mike Netzer: And this is not passed yet. Mike Netzer: Power usage, water usage. Mike Netzer: A lot of these bills don't get passed. Mike Netzer: It's part of the Mike Netzer: Saber rattling. Mike Netzer: Yeah, the negotiating process to get to get a more Mike Netzer: an environment that that works for data Mike Netzer: center development. Mike Netzer: However, it just made me think like you've really Mike Netzer: got to do your homework on where this legislation Mike Netzer: could go state by state if you're going to go buy Mike Netzer: land or you're going to go invest in a certain market Mike Netzer: because that's a really easy way to shift, Mike Netzer: you know, demand from one market to the other. Mike Netzer: And we have seen this. Mike Netzer: We have definitely seen this Mike Netzer: in certain states across the U.S. Mike Netzer: where people had bought land, invested in sites, Mike Netzer: doing the initial site preparation work Mike Netzer: and the legislation changes. Mike Netzer: And it's like different day. Mike Netzer: So yeah. Mike Netzer: So anyway, okay. Mike Netzer: So now let's do point four, Mike. Mike Netzer: Lay it on me. Mike Netzer: Let's talk about the locations that have shifted. Mike Netzer: Within the U.S. Mike Netzer: Yeah, sorry. Mike Netzer: Yeah, U.S. Mike Netzer: In in because we've seen a significant Mike Netzer: shift there. Mike Netzer: And I just kind of give it like, Mike Netzer: you know, probably before the A.I. stuff, Mike Netzer: we were seeing, you were seeing Mike Netzer: the hyperscale companies buy land in markets Mike Netzer: that were data center co-location markets. Mike Netzer: So like in Northern Virginia, Mike Netzer: there's a couple that have bought a lot of land there Mike Netzer: and they were building it on their own. Mike Netzer: But most of these Mike Netzer: land purchases where they were own and building, Mike Netzer: owning and operating the sites themselves Mike Netzer: were in more rural markets. Mike Netzer: So think about like Des Moines, Iowa, Mike Netzer: Omaha, Nebraska, Boardman, Oregon, Prineville, Oregon. Mike Netzer: You're talking like Mike Netzer: 10 plus years ago. Mike Netzer: Yes, absolutely. Mike Netzer: Boynton, South Carolina. Mike Netzer: And even up to the, you know, Mike Netzer: even up to the last four or five years, Mike Netzer: because they're they're growing in those markets. Mike Netzer: So they're continuing to invest, Mike Netzer: invest their San Antonio. Mike Netzer: But then even so areas like Chicago, Mike Netzer: Atlanta, I mentioned Northern Virginia, Mike Netzer: Columbus like those markets Mike Netzer: we're seeing growth, too. Mike Netzer: Now, since then, Mike Netzer: I think when the demand got really large Mike Netzer: and the expectations Mike Netzer: around future growth Mike Netzer: with the AI got really large, Mike Netzer: there started to be a whole new world Mike Netzer: of places that these groups would go. Mike Netzer: So Temple, Texas, Mike Netzer: Augusta, Georgia, Indianapolis, Mike Netzer: Charleston, South Carolina, Mike Netzer: Louisiana, Mississippi, Mike Netzer: El Paso, Louisville, Mike Netzer: Montgomery, Alabama. Mike Netzer: Those are examples of Mike Netzer: Boise, Idaho. [00:14:34] Speaker 1: Mike Netzer: Also known as anywhere that has power. [00:14:37] Speaker 2: Mike Netzer: That's right. Mike Netzer: You can find that on your map. Mike Netzer: That's right. Mike Netzer: That's that's been a big part of it. Mike Netzer: And I think that that's worth keeping your eye on Mike Netzer: as you think about, you know, Mike Netzer: where the opportunities are. Mike Netzer: Now, there's some risk there. Mike Netzer: You know, as things move out of larger markets, Mike Netzer: there's things you have to figure out, Mike Netzer: you know, including how are you going to build Mike Netzer: where are you going to get the labor Mike Netzer: to build a data center of the of this size? Mike Netzer: You know, it's not a small. Mike Netzer: You mentioned the 30 megawatt, Mike Netzer: like that's a smaller data center today Mike Netzer: compared to what we're seeing. Mike Netzer: now, but but we're talking about 300 megawatts Mike Netzer: of, you know, demand. Mike Netzer: So it just takes that that many more electricians, Mike Netzer: that many more people to actually do the construction. Mike Netzer: So I think that's worth thinking about. Mike Netzer: Another risk is, hey, the further we get out from the Mike Netzer: these larger cities, you know, Mike Netzer: how are we going to backfill this capacity if the end user, Mike Netzer: you know, decides to terminate a lease or to, Mike Netzer: you know, leave after 10 years. Mike Netzer: So there's some additional challenges there Mike Netzer: that you really have to think through. Mike Netzer: But you know, think about this. Mike Netzer: So the amount of land is increasing Mike Netzer: that they're buying. Mike Netzer: The parcel sizes are increasing. Mike Netzer: The markets that they're going to in number are increasing. Mike Netzer: And in the nature of the places that they're going Mike Netzer: are very different than they were today. [00:15:56] Speaker 1: Mike Netzer: Yeah. Mike Netzer: You mentioned those kind of eight Mike Netzer: to 10 core markets that existed 10 plus years ago. Mike Netzer: In 2024, 34 markets in the US that had at least 500 megawatts of kind of built plus Mike Netzer: planned capacity. Mike Netzer: I didn't know that, Mike. [00:16:10] Speaker 2: Mike Netzer: See, I'm telling you, I just need to stay on our podcast. [00:16:13] Speaker 1: Mike Netzer: I can access our website as well as the next guy. Mike Netzer: That's right. Mike Netzer: But that's just indicative of them, to your point, to spread. [00:16:19] Speaker 2: Mike Netzer: Sorry, say that again. [00:16:20] Speaker 1: Mike Netzer: So you mentioned, I think, what, about eight to 10? Mike Netzer: That's right. Mike Netzer: That were kind of hyperscale clusters that existed 10 years ago. Mike Netzer: Yes. Mike Netzer: I think, again, not the technical expert, but those are more, Mike Netzer: I almost call this like back office, like kind of like cold storage work, Mike Netzer: computing work those groups were doing. Mike Netzer: Yes. Mike Netzer: They weren't necessarily serving the end user because they were Mike Netzer: pretty far distributed. Mike Netzer: Yes. Mike Netzer: And in 2024, 34 markets where there's at least 500 megawatts, Mike Netzer: either built or planned. [00:16:44] Speaker 2: Mike Netzer: That might be the stat of the podcast, right? Mike Netzer: Thank you. Mike Netzer: I mean, I'd love for one of my stats, but that might be, seriously, Mike Netzer: that's a really interesting point. Mike Netzer: The other thing, you know, we did some work on Mike Netzer: single hyperscale user markets where there's no Mike Netzer: co-location provider in the market as well. Mike Netzer: And this is a strategy that you've seen over the last Mike Netzer: 10 years, which is, hey, if a data center end user, Mike Netzer: one of these large ones moves to one of these markets, Mike Netzer: we should go buy land there, too, Mike Netzer: because there's a chance that if they want to grow, Mike Netzer: we can get ahead of that and probably be a partner for them. Mike Netzer: So right now there's one, two, three, four, Mike Netzer: almost 10 or 11 markets in the U.S. Mike Netzer: where there's a single hyperscale user Mike Netzer: that's growing probably in the 200, 300, 400 megawatts Mike Netzer: and no co-location operator. Mike Netzer: And there's one, two, three, four, five, six, seven. Mike Netzer: You know, there's seven additional ones Mike Netzer: where there's only one co-location operator. Mike Netzer: So there's there's still opportunities. Mike Netzer: That's 18 to 19 markets, 17, 18 markets that Mike Netzer: either have no co-location operator or one, Mike Netzer: you know, next to close in close proximity Mike Netzer: to a hyperscaler that's building. Mike Netzer: So there's still opportunities Mike Netzer: for finding areas that you want to, Mike Netzer: you know, look at the group, look at the user Mike Netzer: that is growing there and maybe look at how Mike Netzer: they've grown in other markets and apply that same type of Mike Netzer: of growth strategy to that, you know, area. Mike Netzer: And that's not foolproof. Mike Netzer: I mean, there's there's they might say, hey, Mike Netzer: this is our one facility here, and that's not the case. Mike Netzer: And you need to understand that's an AI location Mike Netzer: or there's cloud availability zones. Mike Netzer: I think that's one of the areas Mike Netzer: where providers have really tried to get out ahead of things. Mike Netzer: If we know that a cloud availability Mike Netzer: zone strategy needs multiple sites, Mike Netzer: if we can, you know, hang around the rim Mike Netzer: on the one site that's been purchased and be in close proximity. Mike Netzer: And there's very specific measurements Mike Netzer: on how far the sites can be from a latency and mileage perspective. Mike Netzer: That's a strategy that can work and it has in certain markets. [00:18:41] Speaker 1: Mike Netzer: Well, and the cool thing is, you know, Mike Netzer: we've been doing this now a little over 10 years, Mike Netzer: and you can see that strategy of groups Mike Netzer: where hyperscale kind of establishes a beachhead Mike Netzer: and then the colos kind of come around it like. Mike Netzer: Yes. Mike Netzer: Like catfish to a light Mike Netzer: around the dock is how I like to see it. Mike Netzer: It's a fishing. Mike Netzer: You ever do that fishing like light fishing? Mike Netzer: It's insane. Mike Netzer: No. Mike Netzer: You put the two groups Mike Netzer: hang lights off their dock in Florida, Mike Netzer: at least where I've seen it. Mike Netzer: And the fish just kind of congregate to it. Mike Netzer: It's typically catfish, Mike Netzer: which you don't really want to catch. Mike Netzer: But yeah, Mike Netzer: this is the analogy kind of breaks down. Mike Netzer: But anyways, so you can look over the last, Mike Netzer: you know, 10 plus years and see Mike Netzer: how some of these markets have evolved. Mike Netzer: Yeah. Mike Netzer: Where there is a large user goes Mike Netzer: and then the colo kind of follow. Mike Netzer: Yeah. Mike Netzer: And a lot of those groups have had a lot of success Mike Netzer: with that with that strategy. Mike Netzer: Now, there's probably to your point, Mike Netzer: a limit because some of these groups, Mike Netzer: to your point, Mike Netzer: that are going to have one big campus. Mike Netzer: Yeah. Mike Netzer: And they know what they need to do there. Mike Netzer: And there may never be kind of spillover growth. Mike Netzer: And some there might. [00:19:37] Speaker 2: Mike Netzer: Yep. [00:19:37] Speaker 1: Mike Netzer: And so trying to understand how that, Mike Netzer: how and why that's happened. Mike Netzer: Yep. Mike Netzer: Can really help and kind of inform Mike Netzer: if you're looking to capitalize on some of that growth. Mike Netzer: Yeah. Mike Netzer: That can inform that strategy. [00:19:48] Speaker 2: Mike Netzer: Yeah. One last thing I'll say, Mike Netzer: and we can wrap it up. Mike Netzer: But I think one of the reasons this has worked, Mike Netzer: the leasing and the ownership strategy Mike Netzer: for the hyperskill user is probably, Mike Netzer: I would say like 10 years ago, Mike Netzer: I think the data center operator community Mike Netzer: really changed their approach Mike Netzer: in the way that they worked with these companies. Mike Netzer: And they really, instead of saying like, Mike Netzer: this is how you build a data center. Mike Netzer: We know how to do it. Mike Netzer: I think they flipped and realized like Mike Netzer: these companies are doing it. Mike Netzer: They're doing it too. Mike Netzer: And they know what they're doing. Mike Netzer: And in some areas they're doing it better than we are. Mike Netzer: We need to we need to listen and understand Mike Netzer: and go back to them with more of a Mike Netzer: flexible approach on like, Mike Netzer: how can we work with you over a long period of time Mike Netzer: to help Mike Netzer: you accomplish what you want to accomplish Mike Netzer: while we're also able to benefit Mike Netzer: and meet the returns that we need to meet. Mike Netzer: And I think it was really that shift Mike Netzer: that has allowed this growth, Mike Netzer: has allowed the Mike Netzer: the leasing to grow Mike Netzer: and the the the vision of Mike Netzer: these data center users users doing it themselves Mike Netzer: to grow as well. Mike Netzer: It never would have happened if Mike Netzer: the data center operators had just said, Mike Netzer: hey, this is how you do it. Mike Netzer: And if you don't want to do it this way, then tough. Mike Netzer: Yeah. Mike Netzer: The Henry Ford approach. Mike Netzer: Yeah. Mike Netzer: And so I think it's not going to work. Mike Netzer: I you know, I think you got to give Mike Netzer: a lot of credit because they are serving Mike Netzer: a community, the data center Mike Netzer: end users that they are building Mike Netzer: for our experts in what they do. Mike Netzer: So it's a very you know, Mike Netzer: if someone goes to to to to lease Mike Netzer: a 500,000 square foot office space Mike Netzer: and they're an insurance company, Mike Netzer: they're not experts at office building Mike Netzer: and office efficiency and all these different things. Mike Netzer: Every data center that one of these Mike Netzer: large co-location operators builds Mike Netzer: and leases for these, you know, end users. Mike Netzer: They're experts at it, you know, Mike Netzer: and they know what the costs are. Mike Netzer: They know what the technology Mike Netzer: to bring into the data center is. Mike Netzer: They know how, you know, Mike Netzer: generators work and the efficiency Mike Netzer: behind them and all those different things. Mike Netzer: And so I think it's a to be honest, Mike Netzer: it's a very I think it's it's Mike Netzer: it's been really interesting to watch. Mike Netzer: And I think it's a compliment to them Mike Netzer: on how they've been able to figure Mike Netzer: that out and grow with them. [00:21:56] Speaker 1: Mike Netzer: Yeah, and it's a it's a situation Mike Netzer: that continues to change and evolve. Mike Netzer: Yeah, that's why evolution. Mike Netzer: Yes, thank you. Mike Netzer: My pleasure. Mike Netzer: Underscore point you there. Mike Netzer: But certainly one that we're Mike Netzer: we're doing our very best to understand Mike Netzer: where and why it's happening. Mike Netzer: Yeah. Mike Netzer: And so anyways, we hope this podcast Mike Netzer: has been helpful. Mike Netzer: Do you want anything else to add? Mike Netzer: Sorry, one last thing. [00:22:16] Speaker 2: Mike Netzer: You know, lately we since the beginning Mike Netzer: of the year, we've done more Mike Netzer: of these podcasts. Mike Netzer: And it's been fun because I always Mike Netzer: like spending time with you, Mike Mike Netzer: and you right. Mike Netzer: But we've been I think we've been Mike Netzer: getting a lot of feedback, Mike Netzer: which has been really fun. Mike Netzer: And we always appreciate the Mike Netzer: the feedback. Mike Netzer: And I know people come up to us Mike Netzer: and tell us, hey, that's awesome. Mike Netzer: Love this. Mike Netzer: Or hey, y'all suck or whatever. Mike Netzer: It's cool. Mike Netzer: I call him. Mike Netzer: Yeah. Mike Netzer: We'll refund your money. Mike Netzer: Horses for courses. Mike Netzer: Yeah. Mike Netzer: Oh wait, you don't pay anything. Mike Netzer: I'm just kidding. Mike Netzer: But I do want to say there are Mike Netzer: some of those that have been Mike Netzer: like super supportive. Mike Netzer: And we are very thankful. Mike Netzer: In fact, yesterday I was on a call Mike Netzer: and someone said, hey, Mike Netzer: I am the third listener other than Mike Netzer: your mother and someone else. Mike Netzer: And they go, people more than Mike Netzer: your mom listen to your podcast. Mike Netzer: Anyway, it's a very funny comment. Mike Netzer: I appreciate it. Mike Netzer: As far as I know, my mom is Mike Netzer: still never listening. Mike Netzer: I know. Mike Netzer: Well, we'll get there, Mike. Mike Netzer: Gene, if you're listening. Mike Netzer: We'll get there. Mike Netzer: Anyway, I just want to say we Mike Netzer: we certainly appreciate the feedback Mike Netzer: and it helps. Mike Netzer: You know, we hear stuff like that. Mike Netzer: It's like we got to keep Mike Netzer: keep doing these. Mike Netzer: And also, too, like I know people Mike Netzer: will offer up ideas on things Mike Netzer: they want to hear or something Mike Netzer: that's super appreciative. Mike Netzer: We can't get to all of them Mike Netzer: and we there's some of them Mike Netzer: that we're just not experts in. Mike Netzer: And you know, you don't want to hear us pontificate about. Mike Netzer: Well, that's what the Hawk Talks are for. [00:23:31] Speaker 1: Mike Netzer: That's right. Mike Netzer: So we'll bring on experts from time Mike Netzer: to time and talk to them Mike Netzer: where we have not the expertise. Mike Netzer: We'll bring them in. Mike Netzer: That's right. Mike Netzer: So. Mike Netzer: All right. Mike Netzer: Thank you for your time and listening. Mike Netzer: DatacenterHawk.com for way more information Mike Netzer: than we could possibly give on a podcast. Mike Netzer: But check us out next time. See ya.