The Future of the Edge in Growing Markets

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Scott Willis, DartPoints President and CEO, discusses how he started his career, the evolution of the industry and the edge, and DartPoints mission to transform digital ecosystems in growing markets.

Rapidly increasing streaming and two-way video services, 5G and the future promise of IoT continue to drive up bandwidth needs and put pressure on latency in growing markets across the country. The DartPoints strategy is making progress in addressing inferior service performance in select markets with sufficient demand to drive investment, colocation, interconnection, edge content and peering. These markets signal to the wider industry what is possible and where opportunity is driving digital ecosystem transformation.

Q:  How did you first end up working in the world of data centers?

A:  If you look at my background or my profile, I’ve been in communications since I came out of school. So, I’ve been blessed and just excited about being part of this industry. And that started back in the mid 80s. But if you really think about how this industry has evolved from that time, and where it’s going, it has made tremendous strides, collectively as a communications industry. As I look forward, I think we’re even on the cusp of what is going to be greater change. And that’s what keeps it exciting.

You know, in particular with data centers, I did have some experience with it back in the late 90s, early 2000s for a few years, but really, if you think about the DartPoints model and what we do, it’s defining what is edge. Edge means a lot of things to a lot of different people. A part of my goal of our conversation today is I want to articulate what edge means to DartPoints, how we look at edge and what [challenges] are we solving.

You think about the environment within our industry and the pivot from a digital distribution architecture perspective that we’re embracing as an industry and that is what we’re doing at DartPoints. We are looking to define our strategy and edge and our vision of edge and how we’re going to deploy into the growing markets that I described earlier. I don’t see it so much as a pure play data center background kind of play. I see it more as a collective experience of really what my background is in terms of telecommunications, wireline and wireless. I have deployed a lot of fiber and I’ve deployed a lot of wireless networks. It definitely is easy to see the data center as a whole, as a separate entity, but it’s obviously part of that digital infrastructure you talked about. There’s a lot that goes into the data center and there’s a lot that comes out.

Q: What does edge mean to you, is there a specific phrase or terminology that you use when you’re describing?

A: We still refer to it as edge. Others who have heard me say this, and I’ll repeat it, if you line up five people you’re going to get seven or eight different definitions. And that’s okay. That’s a wonderful thing for our industry because it creates opportunity. And certainly from DartPoints’ perspective, [the common definition] really is less than what we are delivering. What we’re attempting to build is not anything that the communities that we’re deploying into cannot achieve today. However, for them to achieve it [without DartPoints], they have to reasonably expect an inferior performance solution and they have to expect a higher cost point.

If I’m in eastern Iowa, which is where we recently deployed, and I want to participate in an ecosystem of interconnected peering, whether I’m a school system or whether I’m a local enterprise, something in a cloud environment that I desire to participate in. Well, I have to either backhaul all the way to Chicago or I’ve got to backhaul down to Dallas. And I’ve got to pay a cost for that.

What we want to deliver is that capability in eastern Iowa where it’s local, and where the request is local. It’s processed and it’s delivered locally, but yet they can still have access to either the larger, broader US market, or even globally. We can do that and deliver a far superior performance at a lower cost point because they don’t have to deal with transport and latency issues associated with connecting back into those markets.

When you couple that with many of these future use cases that are becoming more and more visible, whether it’s agricultural, telemedicine, biotech applications, autonomous vehicles, gaming, etc. The list goes on and on and all of that requires latency-driven infrastructure that can support that demand. That’s what DartPoints is participating in and we’re excited about it. It’s bringing capabilities into markets that are clearly growing today, and doing it in an optimal and a cost effective way. That is really what the DartPoints model is all about.

Q: From a customer perspective, with the impact of COVID in all regions you’re seeing people are moving away from the cities and are working in their houses, etc. Have you seen customers come to DartPoints to get demand now for more local sourcing?

A: The way that I look at this is because I’m still very measured, because edge is evolving, we’re still very much evolving and emerging in terms of at least the DartPoints definition of edge. We are a demand-driven model, we’re not putting capital to work on spec. We’re demand driven.

In many ways, it has accelerated the need for the model we’re discussing. So from that perspective, I think people recognize the need for edge. We’re no longer just looking at some wishful future, latency-sensitive use cases that everybody likes to talk about that may have been a few years away. They are really prevalent in the market. I think COVID has accelerated the acceptance that edge is needed, but clearly from a customer perspective, it’s still measured.

People still want to understand what’s the real value proposition of me as a consumer, whether it be an enterprise, whether it be the private sector or whether it be the carriers, content, CDN, etc. All of these [are] customer segments DartPoints is targeting.

I think the acceptance and the need is well understood for the model. But we’re still evolving through and maturing from an edge definition or an edge value proposition. What that really means, and I think that’s a cycle that will continue through 2021 certainly and into 2022, to me it’s a matter of not convincing the market around the advantages of edge. But how do you define and really deploy to optimize the value proposition for the market or the consumer that you’re delivering edge solutions into.  That’s the piece that we continue to evolve and innovate. We continue to be very aware of how we need to evolve our thinking, to be able to support and ultimately deliver the value that the customer is demanding, at a price point that is acceptable to the market, and that will always continue to be something. I think over the next 18 to 24 months that will be on the forefront of what we do every day.

Q: From a geography perspective, DartPoints is targeting tier two, tier three, and tier four regions. Where is that in the US? Paint a picture, specifically, where are you, where are you operating and where are you targeting?

A: Right now we’re listening to the US market, not even North America.The US market is a very big place and we see lots of opportunity for demand within that market. We’re trying to define the geographical market that we focus on. In our world, what that means is it’s a four region footprint. So it’s the Mid Atlantic, upper Mid Atlantic, Southwest, and it’s upper Midwest. That’s what we’re initially focused on.

What that really represents is that about 30 to 32 of the 50 states. We’re initially staying away from the northeast, it is very competitive, lots of solutions and availability. Similar comments for the West, and so it doesn’t mean that that demand won’t take us there. If we have a customer demand that drives us there, we will consider that. We’re just at a stage, not only within DartPoints, but within an industry, that you need to be flexible. You need to be able to support demand as you deploy, but from an initial focus perspective, that’s where we are.

Q: How do you use data analytics to identify the sites?

A:  We’ve invested fairly heavily into this because it gives us a tool and a roadmap to drive our efforts. That is really unusual. Its population, its commerce growth within these regions, it’s competition. Listen, the bloodline of what we do is fiber, whether I’m in Northern Virginia or I’m in Eastern Iowa, to deliver digital infrastructure. Fiber is the central nervous system. You have to have that. That’s a critical piece we have to understand, where the fiber is available and where it’s deployed. When you quantitatively bring all of that together and you pivot that over to the right, we’ve developed the funnel. Today, that represents about 212 sites within that four region geographical footprint that I described, the 30 to 32 states. That’s what we initially target and that’s what we go after and what we’ve determined through our quantitative model. We know there’s opportunity there and we know there’s a need.

Time sensitivity is a challenge right so you have to apply the knowledge of the market to deliver and prioritize those 212 markets based on timing, and then our go to market efforts around that quantitative model. Applying those demands so as we’re out there talking to the customer organizations that we are targeting to enable our ecosystem. We will ultimately drive on demand, when we get enough interest in a market that’s when we deploy it, and that’s how we go to market and that’s how we have quantitatively developed our go to market strategy in terms of the markets we want to deploy into. If we have other customers which we have conversations that are going on and reach outside of that footprint, we are certainly open to that. But we want to remain very focused and that drives both our organic growth strategy, as we’re deploying, whether it’s Greenfield, whether it’s brownfield type of builds or new builds, and if you look at us you look at our history and we’re a fairly acquisitive organization.

Q: What do you think will have the biggest impact on the market?

A: You bring up artificial intelligence. You bring up a lot of these use cases which a lot of people like to talk about. They’re happening right, we’re involved with some of those ecosystems that are developing but I try not to focus too much on the future because some of those might be a year away some of those might be two years away. Some of those might be five years away, but you are talking to someone who believes that they are coming and they’re going to be great for our industry, and they’re going to be great for society because they’re going to change and have an impact on our lives whether it’s your personal life or your professional life in a very meaningful way and that’s exciting to me to be a part of.

Q: Where is DartPoints heading and what are your plans over the next couple of years?

A: It’s a lot of what I’ve described. I think that you will continue to see us be very aggressive, on the deployment side, as we look to bring the right solution for the right applications and the right needs into the markets we’ve identified. I think you’ll continue to see us be very complementary to that strategy on the acquisition side, we’re going to continue to complement and accelerate our growth into those that we’ve identified.

Then it’s really about enabling the DartPoints strategy. Once we’ve acquired those locations and bring the DartPoints solutions into that environment we can create that robust ecosystem through interconnect and peering solutions that we want to bring into the market. That is going to enable that market, region, and that environment in a very different way than how they’re experiencing digital consumption infrastructure today.

I think too many of us take it for granted because it’s what we use to have access to the internet, it’s normal. It’s just expected and there are a lot of people in emerging countries and emerging regions where they’ve never had it, and it’s a game changer for them.

Q: If you could give one piece of advice to anyone looking to work in the data center industry, what would it be?

A: I give this advice to many groups that I talked to. I love the opportunity to give advice to my daughter who’s very early in her professional career. Be purpose driven, if you look to go to work every day and you look at what you do and the time that you commit to it, do it for a bigger reason. Do it because there’s something there that connects with you, that you identify with and that is hopefully driving towards an outcome that’s broader than yourself. Find that purpose regardless of what industry or what you wake up and choose to do every day and if you do that, I think that the contributions and the impacts you’re going to make as an individual are going to be achieved.

You can listen to the complete conversation here.

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