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Ep. 8: Raul Martynek of DataBank

Summer of 50 PGH Tech Stories
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DataBank, a leading provider of enterprise-class colocation, connectivity, and managed services, announces the opening of its second Pittsburgh data center (PIT2) in North Fayette Township, PA. The facility, DataBank’s second in the Pittsburgh area, brings the company’s total data center count to 20 facilities in nine markets. DataBank CEO Raul Martynek gives us the details of the data center and its plans to keep growing in Pittsburgh.

Transcription:

Thank you so much for following us on our journey here of telling 50 tech stories here in Pittsburgh hanging out with Comcast making it possible all summer long. It is indeed getting sizzling here in Pittsburgh. It's getting hot. But so are our stories. I'll tell you what last week's and headlines are made with databank opening its second center being opened up here. I love seeing these types of investments. This qualifies as a 50 story for sure. I'm really excited to have Raul Martynek hanging out with us today. He's the CEO DataBank you're calling in from New York House of offices in Dallas and you got a big old presence here in Pittsburgh as well. Welcome to the show. Thanks for taking the time. Appreciate it. Thank you for inviting me, Jonathan. It's a pleasure to be here. Very good stuff. So first off, congratulations on this new expansion. We're gonna jump in that and talk about what that means for Pittsburgh. But real fast, let's just start with a quick elevator pitch for databank and what you guys do because I think the service you provide it's kind of behind the scenes people don't think about stuff just turns on but you guys make that happen.

Absolutely. Yes. Lots of database of business. It's been around since 2005 have started in Dallas with a single data center. And we've expanded over the last 15 years to 20 data centers in nine US markets. Wow. And data centers are these buildings like, you know, obviously normal office buildings, you know, we call them buildings for people, data centers or buildings for servers, right? I mean, it's basically when you when you touch an icon on your phone, or when you're looking at something on your computer, you know, those bits end up at a data center. So really, that is kind of the, the physical manifestation of the cloud.

Yep, absolutely. I mean, that that's where the business happens.

We take it all for granted. When you're using your phone and you're ordering something, it's like that data is going somewhere and being processed and shot out to another center. So that's there. It is just absolutely critical. As far as this 20 centers. That's that's quite the business you have going on. That's a lot of footprint.

Yeah. So you know, look, this whole sector you know, look, I've been in the space, You know, since the mid 90s, the commercial internet started, right. So, you know, if you think about, if you go back in time, right, you know, 25 years ago, you know, there was really no commercial internet. You know, that's kind of that's the telecom revolution started at the same time. And basically the sector, you know, first five years was the.com bubble. And obviously, there was a lot of, you know, a lot of carnage in the year 2000 when everything collapsed, but actually, the building blocks of the of the modern internet, you know, fiber data centers, obviously, with the advent of mobile, the cellular stuff started to come into into play, right, so, so at databank, you know, we're basically underpinning kind of that evolution of the modern internet, ethical perspective. You know, we're part of a group of companies under the umbrella of a public investor called Digital colony. And what they do is they invest across what we call internet infrastructure, right, another three physical pieces of infrastructure, that make kind of that experience on your phone, public. Right when you know, your phone communicates to some type of cell tower, or some type of device called a small cell that then gets connected to fiber. And then that fiber goes back to a data center. And those three links in the chain is kind of what makes the modern internet work and obviously those in software on top of it, and are investing in our group basically invest across those assets. So databank is the North American to us enterprise data center platform. And when we acquired the business in 2016, they had six data centers in three markets, Dallas, Minneapolis and Kansas City. And then since then, we expanded to 20 data centers in nine markets. Right. And our thesis has been that, you know, the internet kind of started, for the most part, if you think about it, kind of in the major metros, right. It started in the New York area in Ashburn and Chicago and Dallas, in Santa Clara. When you look at an old internet map, you know, they had these little points of interconnection they call them out peering points, right. Okay. Yeah, yeah. Absolutely, those were the original kind of points of connections where people would exchange traffic. And really the internet just been this organism that's been growing over the last 25 years. And what we saw in 2016, is that it had really grown a lot in places like New York and Chicago and Dallas, but it hadn't grown as much in the secondary markets got it stood the reason that as we continue to adopt technology, as we continue to, you know, seek services that are more in real time that require what we call less latency, you're going to need more of this internet infrastructure locally. So a consumer in Pittsburgh, while today, he might, you know, go to a cloud, and that information is actually in Ashburn, Virginia, or in Chicago or even in you know, the West Coast. We think that in the next five to 10 years, that information is going to have to be in Pittsburgh. And that's why we're making the investments that we're making them because we think that by making those investments will allow these tech and technology Big companies to kind of transform their delivery model to have more of this local infrastructure. It's a phenomenon that in our space, it's called the edge. And it's the kind of the new rave in, in kind of the digital infrastructure space. We think databank is very well positioned to to capture that demand.

That's just so exciting to me. And I love hearing that, like cities like Pittsburgh now are obviously on your radar. Because you see us as a growing tech sector, you see the companies that are here, like like the roars of the world, you know, they're solving tough problems need lots of computing power, that the lots of connectivity. And to know that they have a center that's right here in Pittsburgh, like you said, based in Virginia or somewhere across the country. It creates a less latency, more reliability, redundancy, and so forth. So to us, that's just so fantastic. And honestly, this is your second data center that you've opened up here in Pittsburgh, give us some of the deets in the center and give us some like technical stats, like how much horsepower is in there, how much cooling you got going on.

So  this data center, you know, we got to Pittsburgh in 2018, we did an acquisition of a data center from a company called 365. And it was actually a very strategic acquisition because it's what we call the interconnection point in the market. It's located in downtown, I should say, on the north side, on Nova place. It's in a 1 million square foot reformed, former mall building that now has become kind of the de facto location where all the fiber networks interconnect in Pittsburgh, right. So Pittsburgh is think of it as like the electric grid, right? It's got all the all the connections going back to this building. And then from that building, they go across the country, you know, east, west, north south. And we control that key interconnection point, which is a really key point because for people that are in doing things like CDN, or internet or network networking, you know, they want to be able to be close to all those networks. So we were looking for another location and this particular building, we acquired in a sale leaseback transaction with PNC Bank. Right.

Yeah. Interesting. I saw that. Yeah, that sounds fancy, obviously, you know, six largest commercial bank in the US, obviously a huge corporate citizen of Pittsburgh. And there's a there's this trend among the enterprise space where they don't want to manage this stuff anymore. They render outsource it to someone like databank because they don't really see a lot of value in owning this, these physical assets when really their their, their their value propositions about their software and about what they interact with. Right, right. So we, we did a transaction where we bought this property, it was 110,000 square foot building on 17 acres of land, it's North Fayetteville, and PNC is our anchor tenant there. So they became they executed a long term lease and they're going to be a tenant in the property. But the building was big enough at 110,000 square feet, that we could develop another 40,000 square feet of what we call rays square footage. Right, right.

Wow, that's impressive.

Oh, these are the floor. You know, this is the kind of the When you put cabinets on top of them, right, and then customers can put their or their computer equipment in those cabinets. And the facility supports we measure power on megawatts, you know, which is, you know, a megawatt is a million watts, right? So think about your LED bulb in your house, you know, it consumes 5 watts, yeah. LED, right? He's five watts, right. So this is, you know, a million watts is a megawatt and the building, the deployment that we're doing, we're going to bring about four and a half megawatts what we call critical load to that location, which means that you know, we can stuff a lot of equipment in that building and improperly power it and properly cool it. So you know, one of the things that you know, Bolden us to do this because it was a significant investment, you know, we're investing over $50 million in this in this property. And when we looked at the the Pittsburgh marketplace, we didn't see any kind of you know, modern as we call it. tier three purpose built data center buildings. And what we believe is that there's still a lot of enterprises in the Pittsburgh market that have been outsourced because they don't want to outsource to a location where there's the possibility that they could lose power, right? They need to this stuff has to be on 365 24 by seven, there can't be any blips, not a, you know, not even a millisecond blip, right. So it requires a certain level of investment to create that level of reliability. We believe this property has that investment. And we think that's going to prompt these enterprises to outsource and then to your point, prompt these technology companies to be able to deploy in the market and not have to look outside the market for this solution. Wow. It's such an essential part of our ecosystem here and to have these blocks being put into place To me, it's just exciting. I think it goes to show you that the future of what's happening here in Pittsburgh is just so bright, because you're making these types of investments here, correct. Yeah. And make no mistake, that was a big factor in the decision, right. I mean, you know, We operate, like I said, nine other markets with the exception of Dallas. They're all kind of second tier NFL cities as we like to call them. Places like Minneapolis and Kansas City and Salt Lake Cleveland. And we saw a kind of a unique dynamic in Pittsburgh, right. I mean, you know, the, the twin universities were Carnegie Mellon and Pitt, you know, UPMC as one of the leading medical researchers, you know, obviously, all the autonomous vehicle development that's happening in the city, which was really, you know, the city government recognized that, hey, let's let that happen. Right, let's, let's let's be a testing ground for that. The robotics that's happening at Carnegie Mellon, you know, so we see a lot of tech formation in the Pittsburgh market and in the Pittsburgh future, and that's one of the reasons that gave us that investment. That gave us the confidence to make that type of investment.

Absolutely. I mean, obviously, you're not putting a datacenter down just anywhere. You're not like throwing darts on a board like hey, we had him on Pittsburgh. Let's check this place out. You're doing your research and you see there's some real potential Hear us that is just so exciting. And congratulations on this investment. And I just know it's gonna be successful for you guys, because I see all Pittsburgh's projecting, we need this. Yeah, it would be pretty rad that you guys are doing this as far as that goes. So but one of our key questions here that we have on our summer of 50 story with Comcast is all about bridging the digital divide. We're trying to raise some money for the beyond laptops campaign, which is getting laptops into Pittsburgh public school students hands, they go back to school. And so I'd love to know what are your thoughts on ways that we can help bridge this divide in this day and age where what are some things we can get more technology into people's hands, and just make sure that technology is accessible and that people have connectivity and all that kind of good stuff?

You know, so we're big believers in all those types of initiatives. You know, from our perspective, you know, we try to do what we can to foster that ecosystem, right. So as an example, we put it up as a blog post, I think about six months ago. we're sponsoring the Pittsburgh internet. Change and our downtown facility. So basically, it's kind of a location where people that have internet traffic can pier on what we call a settlement free basis. In other words, they can exchange traffic with each other without paying each other, they just I'm going to give you, you know, a couple of gigabytes of data, you give me a couple gigabytes of data, and it facilitates the exchange of that traffic. I mean, ultimately, I think the way to bridge the digital divide is to bring these the cost of delivering this product as low as possible. If we can do that, it makes it that much easier for other organizations like yourselves with, you know, with obviously constrained budgets to make an impact in these areas. So, so that's kind of, you know, part of our thinking is, you know, how do we bring these solutions to the market and then, at same time, how do we make them you know, world class from a price point perspective, because if we can do that, then we're going to level the playing field among all these other geographies because they make no mistake, you know, these are These companies when they think about moving to different markets, this is a factor that comes into their thinking, right? They're like seeing himself. What's the cost of IP in that market? You know, what's the cost of transport to get out of that market? What's the cost of data center to get into that market so we can build up more inventory. You know, we can create more demand, which will allow us to sell it at a lower price.

Awesome stuff. I can't thank you enough for taking time to talk to us today. Raul I'm just really pumped at databanks investing here in Pittsburgh. Definitely one of our hottest stories here. Our summer of Pittsburgh tech stories with Comcast are the best man. Thanks for spending time with us. Thank you, Jonathan. Thanks for coming on board. Look forward to seeing you in Pittsburgh again, when we can travel. I'm looking forward to you as well. We're in Nova place. So if you're hanging around, we are as well. Excellent. Perfect. We know where to find. Yeah. All right. Thank you, Jonathan. Take care.

Transcribed by https://otter.ai