Does anyone have experience in data centres, or know anyone who does?

searcher profile

June 24, 2020

by a searcher from London Business School in London, UK

HI,

I am meeting with a company that makes hardware for hyperscale data centres.

Logic would suggest this is the fast growing sector that the shareholder claims it is. However, I would love to sense check this with someone who has experience of the sector, particularly as the shareholders are looking for a racy multiple. Also keen to understand what, if any, disruptive technology threats might be on the horizon to destroy the apparent non stop growth of this sector

Do you work in /have experience in this sector, or know someone who does, and would be prepared to have a brief call?

Many thanks

Martin

Martin Scott

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commentor profile
Reply by a searcher
from University of Pennsylvania in Denver, CO, USA
Would be interested to understand what type of hardware is being produced. Are we talking power distribution, HVAC, servers? Is this a patented design which differentiates from the larger cohort of corporations that provide similar products? Each has its own competitive dynamic... as for the data center space itself, there's some maturation happening in standard colocation space & power in the US and Western Europe, but emerging markets still seem to present attractive growth opportunities. The "hyperscale" class seems willing to take on large capex builds themselves, unless they're seeking a more tactical "edge" market for expansion.
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Reply by a searcher
in Seattle, WA, USA
If it weren't for the operating costs, data centers would be the most profitable real-estate per sqft, even ahead of public storage! Be aware that there is huge variance in both operating and build-out costs, (by a factor of up to 8x), and location is absolutely critical! Do not enter into this market expecting to learn as you go... :)
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