David Liggitt is the Founder and CEO at datacenterHawk, helping data center professionals make the best decisions possible. With over 15 years in commercial real estate and extensive experience navigating the data center industry, David understands the communication between providers, users, vendors, investors, and consultants. In this episode, they discuss expansion into major markets across the US and international areas around the globe while accommodating the need for power to run these processes. They touch on the introduction of AI into the marketplace, and the future of data centers across the world.
In this episode, they discuss expansion into major markets across the US and international areas around the globe while accommodating the need for power to run these processes. They touch on the introduction of AI into the marketplace, and the future of data centers across the world.
Read the full episode transcript below:
Raymond Hawkins: All right. Welcome to another edition of Not Your Father’s Data Centre. My friend David Liggitt wetting his whistle as needed because he’s got lots to say. David, here in Dallas, Texas, datacenterHawk headquartered here, as well as Compass. David, thanks for jumping on with us and excited to hear about you and your life and the business. But let’s start with you personally. Tell us a little bit about Team Liggitt.
David Liggitt: Yes, you bet. Well, Raymond, thanks for having me. It’s been fun to see y’all’s podcast continue to grow, so it’s great to be back on. I think you probably know some of this stuff, but maybe for those that don’t, I’m from the Dallas area, grew up here, ended up going to college at Baylor University in Waco, Texas. Go Bears!
Raymond Hawkins: Go Bears, yeah. I never get the right, which give me… That’s TCU. I know that one. Of course, I know Texas. You got to give me the… Okay, got it. I just want to make sure I got it right. Got it. Go Bears.
David Liggitt: Sic ’em Bears. That’s right.
Raymond Hawkins: Got it. That’s its, Sic ’em. I knew it was Sic ’em. Sic ’em. Got it.
David Liggitt: Yeah. If you’re here in the Big 12, you kind of got to know all of the Wreck ’em Tech, and Hook ’em Horns, Boomer Sooner. And then out of college, actually spent five years-
Raymond Hawkins: Saw ’em Off everybody. Everybody’s got Saw ’em Off, right?
David Liggitt: Yeah, there you go.
Raymond Hawkins: Yeah.
David Liggitt: You bet. You bet.
Raymond Hawkins: Got it.
David Liggitt: And then notice the one I didn’t use was anything for the Aggies. Just for those.
Raymond Hawkins: Well, they’re Aggies. They’re Aggies.
David Liggitt: That’s correct. Yeah. They probably wouldn’t notice anyway.
Raymond Hawkins: That’s right.
David Liggitt: But so anyway, out of college, I spent some time working at a sports camp and then got into the business world in 2007 with CBRE.
Raymond Hawkins: David, were you up at Kanakuk?
David Liggitt: Yeah. Did that. Right.
Raymond Hawkins: I didn’t know you did a Kanakuk Tour. That’s awesome. Good stuff.
David Liggitt: Yeah. Right out of college and had a great experience there. And then got into the business world in ’07 with CBRE and spent eight years on that team and just loved that experience. Great group of people and that’s where I learned the data centre business.
Raymond Hawkins: Was Brant on their team? Was he on the team back then?
David Liggitt: Yeah, he came in, yeah, I think in 2011 maybe. So I was there for four or five years with another group, and then he came in and had a great experience working with him, learned a lot from him. And I think those that know him in the industry would agree. He’s just such a great person too.
Raymond Hawkins: Yeah, great human being. Wonderful.
David Liggitt: Yeah.
Raymond Hawkins: This show brought to you by the Brant Burnett Foundation. Oh, wait [inaudible 00:02:32].
David Liggitt: Yes. Check him out.
Raymond Hawkins: Yeah, yeah, exactly right.
David Liggitt: He should have a blog. I have been encouraging him for years to start a blog. He’s a great writer too.
Raymond Hawkins: Here, here.
David Liggitt: And then started datacenterHawk back in 2014. Felt like there was a big opportunity for a third-party data centre information platform in the space, and so we’ve been running ever since.
Raymond Hawkins: I can’t believe it’s almost been a decade, David. Holy cow.
David Liggitt: I know, I know.
Raymond Hawkins: So when’s the 10 year anniversary? Sometime in the next year here?
David Liggitt: Yeah, I guess it’d be in August of, I guess we’re almost to nine years, so August 20, what would it be?
Raymond Hawkins: August 2024.
David Liggitt: 2024, yes.
Raymond Hawkins: Awesome. That’d be really cool.
David Liggitt: Yeah, 10 years.
Raymond Hawkins: All right, well what a awesome decade. What a fun time to be an entrepreneur. What a cool space to be an entrepreneur in.
David Liggitt: That’s right.
Raymond Hawkins: Tell us a little bit, because I know things changed for you guys here in the last year, so talk to us a little bit about what’s changed at datacenterHawk and what the future looks like, and then we’ll get into the business itself a little.
David Liggitt: Absolutely. Yeah. So one of the most exciting things over the last year that’s happened to our company as we were acquired in July of 2022 by a holding company called Simplify Compliance. Now, for those in our space, they wouldn’t know that name, but a name they would know is FiberLocator. So this is the same holding company that owns FiberLocator. And so we were purchased by them, and it’s been just such a great experience, a great process. We have access to more capital to go put more resources in different markets and strengthen our team here in Dallas. And so we are actively growing our team, not just here in Dallas, but also across really the world, which is really fun. So I think you’ll see our platform globalise in the next 12 to 24 months, and we’ll be expanding into markets, certainly more in Europe, APAC, Middle East, Africa. We’re really excited. Latin America, we just hired a regional director for Latin America, so we’re super excited about the future and it’s been a great experience.
Raymond Hawkins: Let’s stick a pin in Africa and Latin America because both, I think, exciting things about the future. David said a bit there guys that he is headquartered in Dallas and recording with us today in Dallas, but we did convince him to fly from his home in The Bahamas after recently selling his business. He’s got a large estate in The Bahamas and we got him to come back to Texas just for this recording.
David Liggitt: I wish. That’d be awesome.
Raymond Hawkins: All great.
David Liggitt: That’d be great.
Raymond Hawkins: All good. All right. Well, so the data centre business just kind of crazy these days. COVID took all of us a little bit by surprise, not only from a health and global standpoint, but from what it was going to do to our business. Grateful that that is behind us from a global health scare perspective, but it’s certainly changed our business. It’s changed our business in lots of ways. And I would love to hear from your perspective as you have your thumb on the pulse of the industry, what’s changed since COVID. We’re past it now. What do you see as the differences? And let’s use that as a launching off point to things that you see in the future.
David Liggitt: Yeah, so that’s a great setup. And a couple things I would say that lead us to where we are today. 2019, I think one of the maybe misconceptions about our space is that it has only grown the way that it has because of CPVID. Now if you look at the datacenterHawk data, we could show you in 2019, actually before COVID started, that we were actually already starting to see mainly cloud service providers, but also some bigger enterprise users, really start to take down bigger footprints. So as that started to creep into 2020, not only were these companies, cloud service providers and other companies realising that they had to expand their infrastructure to support the current world that we lived in, but they were also, I think, looking too at the future going, “We need to make sure that we’re in a position to serve customers three years from now, five years from now.”
And with the supply chain woes that hit our industry then and that demand increase, you now find us in a position where the one word I would use to describe our industry today is constraint. Every area of our industry has really been challenged with being able to get supply online, get UPS systems where they need to go, get a site that is large enough to handle a campus that could support user needs for five to 10 to 20 years. Everything’s gotten more challenging, and so I think the exciting thing within that is that means there’s opportunities.
If you can figure out how to deliver a campus that can support 300 megawatts in the Northern Virginia area south of Manassas, you will have some very interested parties. And I think you could take that same mantra and apply it to Dallas, Chicago, Phoenix, Northern California. It’s the same situation. So I think one of the areas I’m also encouraged is the issue right now with our space is really a challenge to deliver the supply. The demand is there. It’s just can the supply meet when the demand needs it to be there?
Raymond Hawkins: Yeah. Here, here. Well, I would completely agree with your assessment. Let’s go back to ’19. You could see the takes were getting bigger. It was coming. I think COVID enhanced that scale or at that pace of change. But it was coming. We completely agree with you there. I think you nailed that. And COVID just changed everything and the campus and the large takedown in what used to be megawatts became tens and in some places hundreds of megawatts of planning. And that’s really changed in the last three years. It was not that way three years ago.
David Liggitt: Correct.
Raymond Hawkins: And that seems to be, I don’t want to say it’s the norm, but just it’s not unusual today to get calls about hundreds of megawatts.
David Liggitt: Yeah. Totally different, yeah.
Raymond Hawkins: Then the downstream impact that you described that changes everything. It’s enough concrete, enough workers, enough PDUs, everything in the system has to get built and delivered. And it did it at such a scale that the industry, I feel like is catching up now, but had a big, “Oh, my goodness, everything’s changing.” And, oh by the way, it all changed at the same time that we had the worst global supply chain constraint in my professional career. Right?
David Liggitt: Yup.
Raymond Hawkins: So you get those two problems and lots of smart people and lots of hard workers, and I think you used the word constraint. Still our industry feels the constraint, but I feel like at least everyone knows what the problems are, has a plan in place, is working on a fix. We’re working in the right direction, but man, it was tough. So COVID changed the world, everybody worked from home, all the things everybody loved to talk about. What’s changed in the future of the data centre business? Where do you see us headed and what’s driving that?
David Liggitt: Let’s start maybe on the larger scale requirements. I think the size of those requirements are forcing data centre operators to acquire larger land parcels or work really hard within the area that those users want to be to put together a land parcel that could serve whether it’s a hundred megawatts or 150 megawatts. So it really depends on geographically, the challenges in the future, really depend on where you want to be. I think that you will see in major markets, so think Dallas, Chicago, Phoenix, Northern Virginia, Atlanta, let’s take those for instance. I think you will see developments continue to push out to the outer edges geographically. And those will continue until the applications break from a network side of things, and then that demand has to be placed in other potential places. It’s one of the reasons we’re seeing a lot of activity in secondary markets, so think about Salt Lake City, Austin, Minneapolis, these areas that traditionally have had some data centre development but are seeing a lot more interest over the last 12 to 18 months.
And so I think that what this shows is that if four megawatts was a large requirement back in 2010, and maybe that changed to six to eight in 2018, by 2020 it started to be 12 to 16. And then by 2022 that started to be 36 to 72. And then today, to your point, you made the comment earlier about several hundreds of megawatts, that’s not an uncommon requirement. Now, there aren’t 50 requirements out like that in Dallas, but historically, Dallas is a really good example, but it’s like that type of demand wouldn’t come to Dallas because of certain reasons and that has changed.
So anyway, I think in the future we’re just going to see activities by data centre operators and investors really focused on, “How can we meet the large demand? Where do they want to be?” And it’s one of the reasons you’re seeing so much money pour into acquiring land right now. And if you want win three to five years from now, you have to be buying that land today. And in some cases, if you want to win 10 years from now, you’ve got to be buying that land today. I was in a meeting several months ago where I heard 2030 as a, “Hey, this is when the power would be available.” In our space, that’s crazy. But that’s where we are today.
Raymond Hawkins: You brought up the land getting purchased way out ahead, but you also mentioned power. That’s the other piece of this right? Power.
David Liggitt: Yes.
Raymond Hawkins: We as an industry, I say the industry, have come to the market and said, “I need power in such scale globally that we’re really taxing the generators, we’re taxing the grids.” Everybody’s seen the stories around Northern Virginia. It wasn’t a generation problem, it was a distribution problem. And we’re now making those large power requirement requests years and years in advance to go with the land. It’s definitely, that scale change has changed the power dynamic.
David Liggitt: Yeah. And one thing I would say that for maybe those that aren’t in the space listening, historically, if I go back to 2015, if someone was buying land to do a data centre development, you’d acquire the parcel, you’d do the site selection work, and you’d just make sure with the power company that you could get 30 megawatts or whatever the power is. But it was in the 20 to 40 megawatt range. Let’s say that was the power analysis. Now, I think the power analysis is looking at certain areas from a generation perspective and going, “Hey, if we put our resources in this region, can this region support power generation of X over the next 10 to 20 years?”
Then we moved to the transmission, which obviously through areas like Dominion have become much more visible and focused on. Then you get to the site substation, construction, and whatever. And so it’s almost like the analysis to due diligence has gone further up the scale because, to your point, the sizes are so large, and once you put that capital in a market, it’s there. It ain’t coming out, so you got to make sure that you can grow the way you want to.
Raymond Hawkins: Absolutely. Well, we couldn’t agree with you more. It’s interesting to hear because you have such more of a broader market view than we do. But man, absolutely land years in advance now, and power due diligence, and power analysis years and years in advance in close collaboration with the generators. You described it perfectly. All right, so what’s driving all this? When do we get to… What was the great Arnold Schwarzenegger movie? I’m drawing a blank, Terminator. When do we get to where the computers take over the world and we don’t need humans anymore? How far away are we from AI and ML killing us all?
David Liggitt: Seems like that’s being talked about more and more now almost every day, so I kind of keep looking over my shoulder to make sure I’m safe.
Raymond Hawkins: I keep reminding folks that our data centres have off switches. We can just turn them off.
David Liggitt: Sure.
Raymond Hawkins: But go ahead. I don’t want to stop the hysteria. I know there’s lots of worry out there.
David Liggitt: That’s funny. Well, I think anyone that’s gone to a data centre conference over the last five years, you’ve heard words like 5G and Edge and the autonomous cars and AI, that this is going to be the next round of infrastructure needs. And I think several of those technologies have probably underperformed the expectations or at least the amount that the industry has talked about them.
Raymond Hawkins: Wait a minute, wait a minute. Internet of things is changing everything. Stop.
David Liggitt: Yeah, sure.
Raymond Hawkins: So we’re going to have data centres on every corner.
David Liggitt: That’s right. That’s right, of course. But I think that AI is a really good example of probably one of the first technologies that I would look at and say, “Hey, there’s some real strength behind this.” And I don’t even think we know what that is just yet, especially as some of these technologies become more consumer friendly. I think that we are probably just scratch the surface from an infrastructure perspective. And we can tie certain development projects and transactions in the market back to specific AI requirements that are driving that demand. And this is not the Bitcoin type of demand that doesn’t have infrastructure, redundancy needs, or anything like that. This is high density compute that needs to be in major locations.
And so that’s one of the things that we’ve seen really push up the absorption numbers over the last two to three quarters has been the continual adoption of AI, both from, as I mentioned, a consumer perspective, but also from a business standpoint. I think businesses are getting smarter about how can we use AI to save us time. If you look on LinkedIn, you can scroll through, there’s different industries that have put, “Hey, here’s how financial companies should use AI. Here’s how a insurance company should use that.” And so I think the light is coming on to a lot of people related to how they can use AI in their business and even personally.
Raymond Hawkins: Yeah, I’ve been amazed. You mentioned LinkedIn. I’ll see those lists. The top 10 apps your business needs for AI. First of all, I didn’t know there was 10, much less the top 10. I mean what all the things you can do that are AI enabled to have some AI backend. I’m not going to name the company for obvious reasons, but I do know that customer had a set of personal productivity tools and they said, “Hey, it took us 14 months to get to a hundred million users of this set of tools.” And they said, “Hey, when we rolled out this AI solution, it took nine days to get to a hundred million users.”
David Liggitt: Yeah, well they’re-
Raymond Hawkins: I think that that caught some people’s attention, right?
David Liggitt: Yup, yup.
Raymond Hawkins: Is that the speed of adoption and the ability, the ease in which you can integrate it into what you’re doing and how quickly it changes things, I think has got our industry coming out of COVID and trying to handle the COVID demand, just another leg up again. So here, here. AI and what it’s doing to enable businesses of all sorts and the backend to drive it, an incredible driver for our industry.
You mentioned Latin America and Africa. I’ll tell you from a Compass perspective, we have projects going in both continents, both parts of the world. Would love to hear your take about what you’re seeing down there in both places. Well, I should say down for South America and over for Africa. What are you guys seeing? You mentioned, I think before we got on, about that you’re already hiring in both places, so we’d love to hear about that and hear about what growth you see.
David Liggitt: Yeah. Typically, we say, and I can’t prove this with data that the US data centre market is, we would say, two to three years kind of ahead of what’s happening in Europe. And then we’d say that European market’s probably a year or two ahead of what’s happening in APAC. And then I would take a Latin America and an Africa and say, “These are in the next rung of maturity and activity that’s happening from a development perspective of interest for cloud service providers, for other hyperscale users, for enterprises that want to provide better solutions to these regions.” I think one of the things that we need to remember in the US is how big these areas are. Latin America, Africa, how many people from a population perspective live in these locations. And with that density of people, comes business opportunities, and I think that’s one of the reasons that you’re seeing a lot of these groups look at how to mature their infrastructure footprint in these locations.
Now, it comes with a challenge. Some of the way I think some of these companies think is, “Hey, we’ve got a $100 million, $200 million, whatever the amount of money is, $500 million that we’re going to put somewhere. And so we’ve got to de-risk wherever we put that to the best that we can, that money.” And so there are some risks as you move into some of these other less mature continents and areas that every data centre operator and investor has to be aware of related to how requirements get completed in that market, who you need to know to make that happen.
I think one mistake a number of US groups have made is just going into a market thinking that the way we did this in the US is going to work in these other countries. And I think most of us would look back at that and go, “There’s probably a better way.” You really need to understand the culture and the groups that are there and why they’re there and where they are and really probably work with someone in those countries to better your footprint there. I think that’s one of the reasons you’ve seen a number of acquisitions, certainly in those two regions, over the last 12 to 24 months because people go, “Hey, we want to get mature here. We can either go in and do it ourselves or we can look at data centre operators that have a footprint of five facilities or 15 facilities.” And that has seemed to be a more preferred approach over the last 12 months.
Raymond Hawkins: All right, let’s get you on the record. Let’s make some predictions. You talked about here in the US. You mentioned Chicago and Dallas and Northern Virginia and Phoenix and the markets that we all know, and kind of tier two, Atlanta. So let’s get your prediction for big markets in Africa and your prediction for big markets in South America. Pick one or two. Where do you see the first real data centre dense market in either one of those continents?
David Liggitt: Yeah, I think Mexico is certainly one of the most interesting areas with several markets there that I think are seeing a lot of demand. No surprise, power is a challenge in those markets, and so strengthening the infrastructure there. I think Rio is another area that will continue to grow, just given that the population of people in those areas, that I would think both of those areas are really set to grow. For Africa, I know from our perspective, it’s definitely a focus area of growth just because of the density of people that are there and the lack of infrastructure.
Raymond Hawkins: Yeah, I got a funny Africa story or a little anecdote about Africa. So the first time I went to Africa on mission trip, I walk into a village, there’s half a million people, there’s no paved roads, there’s no sanitation system, there’s no sewer system. I mean, there’s no infrastructure, none. There’s no two-story buildings. I mean, there’s nothing there. Yet the first person that walked up to me had a cell phone.
David Liggitt: Of course.
Raymond Hawkins: And I asked, I was like, “Hey, I don’t understand, how do you have a cell phone?” And they laugh, and they walk me through the village, and they said, “Hey, here’s the cell tower that got built in town,” running on a generator to your point, no power. And my next question was, “Look, how do you guys charge your cell phones?” And there were people in the town that carried around car batteries that they had built adapters to the top of. You would come and you would go to the store and charge your cell phone off of the car battery. You pay for the time it was on the charger. So I asked, “Hey, you didn’t do… ” “No, we skipped over the wired part.” And I think we’re going to see similar kinds of things from the data centre business, right?
David Liggitt: Sure. Yeah.
Raymond Hawkins: We’re going to jump in at phase three or four of the data centre business because to your point, the population is there and the size of the economy’s there and the growth. When you look at the demography of Africa versus the demography of North America or Europe, we’re getting older and shrinking in population. They’re getting younger and growing in population. I think Africa’s one of the most exciting places for many, many reasons, not just the potential to develop, but the human growth and the vastness of Africa. I’m always amazed at how fortunate to get to fly on mission air. So you fly fairly low altitude aeroplanes from town to town. It is just the biggest place. And I live in Texas and it’s the biggest place I’ve ever seen. It’s just unbelievable, so I’m excited about Africa for us as an industry.
All right, so let’s get a really, really important question on the table. This is vital. After this, we probably close, and the phones will be ringing off the hook, and we’ll be getting asked for reporters. Let’s have you on the record pick who is the most handsome CEO in the data centre. You got Andrew Schaap, Chris Crosby, or Brian Cox. I mean, between those three, and let’s put Andy Power in the race. Those four guys, who, and we did a question on this online once, if you had to pick the next James Bond out of data centre CEOs, so that’s how we’ll question it.
David Liggitt: Oh, gosh.
Raymond Hawkins: If one of those guys had to be tapped as the next James Bond, is it Chris Crosby, Andy Power, Brian Cox out of STACK or Andrew Schaap out of Aligned, that’s a handsome group of men, and one of them going to have to be the next Bond guy. So who you taking?
David Liggitt: That is a good group of guys and a very smart crew.
Raymond Hawkins: Smart group of fellas. Yeah.
David Liggitt: That’s right. I’m going to go with your boss, Chris Crosby.
Raymond Hawkins: You’re taking Crosby. I’m taking Brian Cox, but Crosby’s not a bad pick. Crosby’s not a bad pick.
David Liggitt: Sure. And I think each one of those could be a good pick. In fact, I’d love to-
Raymond Hawkins: Could be a future Bond.
David Liggitt: That’s right. I’d love to see a little PDF of them as a little movie trailer with them in their Bond [inaudible 00:24:52].
Raymond Hawkins: Yeah, yeah. In their tuxedos, playing poker or something.
David Liggitt: That’s right.
Raymond Hawkins: That would be awesome.
David Liggitt: That’s right. Yeah. I wouldn’t put anything past Schaap and certainly Andy Power knows what he’s doing as well.
Raymond Hawkins: Andy knows what he’s doing too, that’s for sure. Good guys. Well, I would agree with you. Our industry’s led by some really bright guys doing really cool stuff-
David Liggitt: It’s true.
Raymond Hawkins: … taking really big risks and helping change the infrastructure. I get, we didn’t spend any time on this because we’ve done it in other podcasts, but occasionally I’ll get asked by us or journalists or analysts, “You guys are using way too much power. Your industry’s just too power hungry. You’re messing up the grid. What are you guys doing in the data centre business? You got to be more efficient.” And I always ask people, say, “Hey, can you grab your cell phone for me? Just tell me on here what you want to quit doing. I mean, we’ll turn it off. You don’t want Netflix anymore? You don’t want to ride Uber? You don’t want to book your hotel on here anymore? No problem. Just tell me the things you plan to stop doing on here, and it’ll stop running in our building as soon as you want to stop doing it.”
I make the joke that we are enabling the digitization of our planet, and that does take some energy, but I think on the whole, it’s great for growth and great for humanity and great for where we’re going. We want to be great stewards of the energy we’re using, but I do think it does serve the greater good what we’re doing on the other end of those phones, for sure.
David Liggitt: Yeah. I think you could even look at the companies that you just, I guess, Digital, STACK, Compass, Aligned, and look at what they are doing from a sustainability perspective and go, “The industry’s come such a long way over, if you think about it, in a relatively short period of time if you think about our industry in a macro view, related to the efficiencies and in really tying to be as sustainable as possible in many different ways.” And there’s still a long way to go that I think we’re all working to figure out, but I think we’re definitely heading in the right direction.
Raymond Hawkins:Yeah, definitely lessons to be learned, but the business has changed dramatically in the last decade. PUE’s measured in the one dot something is so different than it was a decade ago, right?
David Liggitt: Oh, yeah. Oh, yeah.
Raymond Hawkins: So it’s changed a bunch. And PUE’s just scratching the surface, but an easy metric everyone understands. Well, David, excited for you guys. Congratulations on the success of datacenterHawk and excited for you in the future and grateful to be in this space with you and with great folks like you and your team. And thank you for joining us on the podcast. Thank you so much.
David Liggitt: You bet, Raymond. Thanks for having me on.