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People Behind the Packets
Presented by Nitin Rao, Jarrett Appleby
Originally aired on
September 18, 2020 @ 3:30 PM - 4:00 PM EDT
Tune in to hear conversations with leaders building the infrastructure the Internet relies on.
Hey everyone, welcome to People Behind the Packets. This is the show where we speak with leaders around the world building infrastructure that the Internet relies on.
Thank you for joining. My name is Nitin Rao. I lead the infrastructure organization at Cloudflare.
My guest this week is Jarrett Appleby. Jarrett's a senior advisor at Blackstone and previously was in executive roles at Equinix and CoreSight and Digital Realty, a number of companies just critical to our infrastructure.
I know Jarrett really as the person who knows everybody and so I figured I'd just sort of corner him for 25 minutes and try to understand how he knows everyone.
But maybe to start off, Jarrett, how are you doing? Thank you for joining. Thank you.
Appreciate you having me on the show. And, you know, it's great to connect and do all this from the office as we kind of travel the world, sitting at home.
Now, just as we were sort of preparing to go live, you were telling me about the maps behind you.
I think for someone who's been in a role like yours, those maps have special meaning.
So can you give us a little more color into like what are the maps behind you?
Well, I mean, I've been traveling for 30 years in our industry and much like you all, where it's the peering community or the data center community working around the world and traveling and enjoying that, it's hard to be in your office day in and day out.
So we moved into my new office. I have one map that shows our personal travels around the world, which are all on hold right now.
And then I have another map, the subsea cable map, which really I'm tracking the world and the Internet infrastructure that's being built.
And I actually highlight all my clients that I'm working around the world on that map.
And so it's really evolved over the years.
And it reminds us of our role kind of in the Internet and infrastructure and especially developing markets where there's a lot of fun these days.
And so for someone who's maybe like not as close to the data center industry or not as familiar with interconnection, if you're the average Internet user, why does a map like that matter?
Why do submarine cables matter? Yeah, I think what matters in particular is Internet infrastructure is foundational.
It's a basic right. It really opens up emerging markets and provides just kind of the basic needs of the world.
And, you know, in the legacy world, I actually started my career building components for subsea cable for TAD 8 at AT&T.
So that goes back a long way. You know, at this point, you know, that's 35 years ago, those were basic just connecting Europe to US.
And now you're talking about all kinds of markets, whether it's Africa and Middle East and the expansion and how it fits into kind of those basic foundation connecting the world.
So it's exciting to see that kind of investment and track it over time. That's great.
I didn't know that. That's fascinating. There's just so many things to talk about.
I'd love to maybe start by just chatting about all the startups, your advisor, investor, supporter of.
So can you maybe just give us a description of, you know, to the extent you can share sort of some of the companies you're involved in and what drew you to them?
Yeah, so I think, you know, three basic things I'm working on these days after 30 years, I call myself a recovering operator, like you all, you know, I miss the team and the companies.
But, you know, you look at your career phases, I'm kind of at that coaching phase.
And so I get an opportunity to work on, you know, global investment with the Blackstone Group.
And they're making investments. You know, we recently announced something in China, looking at Japan and some developing markets for data center and networking.
The second is kind of emerging market. I work with CEOs of companies like Mexico, Keo Networks is the, you know, the equinix of Mexico, and they've been doing that.
Liquid Telecom and Africa Data Centers is expanding their business and investing in that infrastructure.
And then I spent five weeks in China and Hong Kong.
So I have clients started with GDS, and who's, you know, really expanded across China and now companies like Chaiyor and Sunny Vision.
So it's really working with these emerging markets to share some best practices of things that we learned at equinix or digital reality, for example.
And the last is ventures.
And you're good enough to listen to me. And, you know, when I come in with, okay, here's the newest thing, how's it fit in?
And it's largely around, mostly around the intelligent edge, distributed edge, and the services around edge compute, all the things Cloudflare and the CDNs are evolving into.
And looking at that, and again, helping venture money come in and working with the executive teams to scale.
That's great. So for anyone listening in, if you have questions, you can email us at livestudio at Cloudflare.tv, and we'll try to get to the questions over the next little bit.
Tell us more about the intelligent edge. What is it?
And it's so sort of broad and encompassing. How do you figure out where to really focus your time?
Yeah, I mean, every edge has a real estate component and a location, you know, asset market component.
And so I saw this trend probably six or seven years ago, this edge to core topology and the types of services there.
And I had an opportunity to work with the edge connects guys as they were really expanding in the tier two markets.
So that's one edge and that's happening in emerging markets.
It's actually much bigger investment in markets like Mexico or Central America, who had to kind of grow up on that because they didn't have some of the basic data center and infrastructure.
But the services stack is particularly interesting.
And you see it in terms of AI and machine learning is one of the biggest ones like NVIDIA, you know, with their DGX platform and their EGX platform and the investment that gets a lot of visibility.
The CDNs, the services stack, the edge compute, the bare metal and connecting it back to other high availability services and connectivity.
And then the security and privacy associated with that.
So looking at all those kind of components and the timing of that.
And in the COVID world, that's gone faster. You're seeing things like Australia.
Honestly, the Internet was breaking. And so I've been working down there for three years, talking to the team, seeing some of these opportunities and there's a need to invest.
And there's guys like leading edge and the government down there saying, I can't do streaming.
I can't offer these services. How do I get to tier two towns and cities and give them this infrastructure that we all rely on and take advantage of.
So it's infrastructure, it's service, and then it's the evolution of over the top kinds of services that it's really exciting to see.
And so what's different between like now and 10 years ago? I guess, why now for all these ideas?
Yeah, I think, you know, basically the Internet was going to evolve and people are demanding performance and the scale throughput, you know, it just starts with basic video and high definition and streaming services that we're showing today.
We're not all happy. And when you're working at home or offices that are distributed.
Yeah. In some markets, they skip a generation. So they didn't make some of the same investments we have.
So in developing markets, it's growing faster and they're trying to move to this digital economy.
That's a basic foundation that you need to go do.
So I think the applications are here and the service demand and the experience is there and the costs have come down.
And fortunately for us, folks like you on the CDN side and hyperscalers are building at scale we haven't seen.
And they want to push those services to new tier two markets and new services, which makes it much more affordable and much more scalable.
One example that comes to mind, you're talking about skipping generations that came to mind was India and just the explosive growth where I've seen there.
Every time I pay my T-Mobile bill, I feel very, very jealous of just the data rates in India because it's much more attractive and the average user is consuming a lot of 4G data.
Yeah, I mean, that's a great. I fell in love in India about almost 20 years ago and spent quite a bit of time working when I was with the Reliance Group.
And it was early and the infrastructure was set up differently. That group now you've seen like three iterations of mobile first.
Now you see companies like Jio and the investment coming in.
You see the partners like Facebook and Google kind of layering Microsoft on top.
And then you're seeing the investments of hyperscale.
I work with a company, Yoda Infrastructure is building these huge campuses that you'd see in Ashburn.
Well, now you're building that kind of infrastructure in Navi Mumbai, Delhi, Chennai, and you're seeing the hyperscalers and the subsea come in.
So all those building data centers on the back of subsea.
And then, you know, you got to solve for that first mile, last mile connectivity still.
But the level of investment in India is just really incredible.
But, you know, it took 15 years to get there. So interesting times. I'm with you.
So tell me more about your relationship with the executive team. And so you're helping startups.
But for many of these, just like the capital involved is staggering.
So they're quite literally like this isn't like a couple people in a garage.
There's billions of dollars in a really capital intensive business.
How do you, like, what, like, just tactically, like if you get on a call with this team, like where, how can you be the most helpful?
Yeah, number one is the network you mentioned earlier, I've worked for a lot of companies and been in the business a long time.
So I'm blessed just to have a lot of relationships and I can get access to people like you to bounce ideas off of say, okay, what are you doing in this market?
So kind of helping them with some relationships that they can't get, which is even more challenging in the COVID world.
You can't go up and meet with them face to face.
I think the other side is, I actually have gotten to a point in my career, I've worked for some great companies, I actually stalk these companies, so to speak, like, I go, wait, this is a disruptor.
And it might take me a year, but I get to know them, I build a relationship of trust.
And, you know, people want to work with people and you have fun with it.
And I think that kind of relationship and trust you can build.
And I look for, you know, India is a great example.
You know, this is the team that built Now Magic. It was a no brainer, very talented team kind of building out the market, helped them with some aspects and built that relationship.
They had a very solid real estate, I knew real estate was the foundation of India, and they had Arangani Group.
And so you get to meet with the board and the investors, and then you can provide advice and bring in money for growth.
And that in today's world, there's, I'll call it, there's mixed knowledge of money, there's some really smart money that have done it before.
But there's a lot of money chasing a lot of these opportunities that may not, may be new to this space, and not as educated.
So trying to find the right growth partner at the right time, you know, is important.
So the whole goal is to build a successful business and scale it.
And for me, it's a lot of fun to interact with all these, you learn every day, I learn every day working with these folks.
There, there, there, there's some folks like, like the Yoda example of building just just massive data centers.
There are other folks who are, who are sort of extending the sort of last mile of data centers and, and, and helping birth some of the physical infrastructure to support running compute closer to Internet users.
There are a number of startups doing some version of sort of data centers for mobile edge compute.
So being able to place servers close to where mobile users are.
And, like, there's so many companies, it's, I'm guessing not everyone can win.
And so, what, what's your sense, what, what's going to separate the, the companies that they do better from others that don't?
Because there are a lot of people trying the same thing. Well, I think it goes back to the community.
Who do you, who do they solve for?
People can build smaller data centers and get good at deploying, you know, one aspect is, are they good at site selection, but it's an island unless you can bring the Internet and peering community to these sites.
So I think that's one key win is, does the community endorse it?
And will they interconnect there and provide that fabric?
That to me is, this community really drives that. There's nothing else I learned over the years.
It's, it's the power of the peering and the Internet community.
I think the second is the role of cloud and private networking.
And you saw it with guys like Equinix Cloud Exchange and Megaport Fabric, but this cloud connectivity role and the performance around that is really critical.
And then the services that you can push out and the performance attributes, you know, I work closely with a guy like Edge Micro and, you know, they have some intellectual property around a mobile edge traffic exchange.
Now, I don't know the timing, you know, but it solves for things that maybe CUPS can't solve for, you know, and that transition to 5G.
And so there's some technology aspects that we're trying to solve for, you know, at the edge that could improve it.
But again, unless the community comes and the connectivity, I think the winners will be those who can really solve for that going forward.
And I guess like, maybe I can try and add more background for anyone who's listening and less familiar, but curious.
The cloud providers typically connect with sort of major Internet service providers in the US, for example, in maybe about 10 markets.
So there are about eight to 10 major markets, and nearly all exchange of traffic happens there.
And thanks to projects like the work you did with EdgeConnects, in many markets, we doubled that.
We went to interconnecting at 20 or 25 or 30 locations. But there's an opportunity to really get the next thousand facilities that are run by these major ISPs, be it Comcast or Charter, T -Mobile, etc.
And really convert them into interconnection points.
And that would support a whole series of startups. I love the work you did with EdgeConnects in particular, because it's so real.
It's like, it's not talk about what's possible in the future.
It's helping applications right now.
And I think they did a particularly good job of seemingly almost out of the gate, sort of having the right cast of characters together.
And so if you're in Tallahassee or Madison, Wisconsin, you just have a good Internet experience.
And I'm a big fan of the work they did. Yeah, they're a fantastic team. They now are funded to expand the model significantly.
But you've never heard of the same.
Most folks have not heard the folks that are doing this in Mexico or Australia or even kind of non-flat, non -core cities in Europe, you know, as that expansion happens.
So yeah, it's good just to get the visibility and bring the community these solutions.
Now some countries, some countries just like the, there's like, if you look at like a heat map of population density, like for one, like not every country is broad.
Some countries just, you know, don't have the geographic breadth that clearly Australia does, but other places are smaller.
But there's, but there's also population density.
So like there are some instances where, where the country may be big, but most people really just live in one or two locations.
And so if you're an entrepreneur, you know, standing up infrastructure in the fifth city, sixth city, like, do we need edge compute in Wagga Wagga?
Like why, like what, what is, what is the point up to which it makes sense and beyond which it doesn't?
Well, it's, you know, again, if it's covered, if you want to sponsor a digital community and digital infrastructure, you need to get on the highway, you need to be in a digital highway.
So if the government in those markets may want to sponsor universities like Newcastle.
It has a major university.
My daddy's, my daughter studied abroad there. The Internet performance wasn't great.
And it's not that far from Sydney, but far enough that performance matters.
And so you got to solve for that. If you're in Wagga Wagga, you need Internet infrastructure for the new world.
So if you want to transition from farm agriculture to, you know, the digital world that, and, and I think markets like India, you were, we were talking earlier have done that.
They've taken a mobile phone at a very low cost rate and transformed industries and the community and brought the, you know, India into this digital evolution.
And with that kind of investment, you can really change the landscape.
So these kind of next tier markets become, they get on the highway and they get an opportunity.
I think we're seeing that in US in a big way too, that just some of the basic thing and in COVID world that just open how mission critical this digital infrastructure that you all are building is, you know, to the rest of the world.
So where, so like in the United States, Ashburn, Virginia, for example, just, just outside of DC is an example of a market that just has a lot of history for interconnection and, and it's just, just iconic for a number of reasons.
There are other markets, which, which thanks to many of the companies you support sort of made their transition.
What are examples of US cities that went from, I guess, playing a less prominent to more prominent role in, in.
I live 15 minutes from Ashburn. Now I moved back to the East Coast town next door, eight miles from your Middleburg.
Most of the homes are off the grid.
So there's still work to do to get the connectivity deeper in, in these markets.
I do think you've seen the evolution to 10 or 12 cities like that used to be Ashburn, Dallas, Chicago, LA, Bay Area, Seattle.
Now, you know, you see Atlanta pop up in a big way, you know, is that next year, Denver, you know, you're going to see, you know, those communities really build up at scale.
I think a lot of it is going to start with the hyperscalers.
I mean, you just see the scale that they're building, particularly in these markets and that edge is getting more distributed, you know, every day.
So to your point, you know, we call it the NFL, you know, for the global audience, the National US Football League.
You know, that's where the action is right now is the NFL cities.
I think the tier two markets that were underserved, particularly around, I think the starter will be research and development and some of the cloud applications that are going to be developed will be the anchor tenants for these, these new cities.
I call them AI cities, smart cities.
Again, that interconnected world and the devices will be just as important as the people.
So we tended to look at population. It's going to all be about devices and where that is happening.
These interconnected devices are going to be even bigger in that next wave.
So it's great. One of the things I always, like I've always respected a lot and been inspired by is like your, your, I think it, like some of this really calls for sort of seeing the vision of what, what could be before you have it.
And every time I speak with you, you're, you're just so optimistic and excited about every single startup and that they are helping and, and sort of that enthusiasm really comes through.
Well, I'm passionate about innovation and, you know, I watch, you know, companies and, and, you know, like yours who just are innovating and growing and scaling.
I particularly think the CDN evolution is going to be incredible.
And you can see it in the growth rates and the investment and the valuations of these, you know, companies and the value, but more importantly, the reach, you know, the, the need to get in emerging markets and, and that, so that's a lot of fun to see that kind of evolution and in these underserved markets.
Do you, do you, so, so what, what, what do you, what do you, I know you spoke a little bit briefly, what, what do you, what are you most excited about for the, for the, for the, for the next, for the next several years?
No, I, I mean, I think one is, I think the emerging market space is huge. So, you know, we have some, you know, challenges geopolitically with China.
I think I spent five weeks in China.
It was incredible to see the amount of investment and innovation going over there.
But, but we see these communities kind of creating their own environment.
So, I, which has created really an acceleration of opportunities in markets like India and Africa right now in particular.
And then regulation is the thing, data protection is really big.
And so data sovereignty and protection.
So I think that being distributed really opens up, you know, new markets in the world and not the traditional hubs.
And so the winners can be the folks that can solve for that and be that next generation of, of platform development.
I'm a huge fan of platform development. So I think if you think of the world at a market level, at a platform level, and then at an ecosystem level where the community comes together, the secret sauce is getting the community to play together.
But if you can build a platform that's very powerful and scales, you can solve a lot of challenges for, for your customers and the base.
That's great. Have you, have you, do you, how do you, how do you, so where, how do you, how do you, how do you, I guess, like take a break, take time off?
Are you Bouncing between ideas and startups all the time.
What do you, what do you do to just like recharge?
Well, I mean, until, you know, March 17th, I was traveling, you know, and personally, I like to mix work and play.
We've traveled around the world and we had a lot of trips.
So now I got a lot of Receipts for airline tickets that I want to use someday.
But you travel the world in a day, you know, for me, my outlet is I live on a golf course.
So I get out in the morning before you go. And that's opened up and you can be outside.
I read a ton. And, you know, sometimes I get my photo bombers, my granddaughter when she's visiting or the dogs will step in like all of us.
Yeah, I think, I think, I think the dog briefly had a Yeah, so we all experience that now in today's world.
But, you know, you just, you kind of the family and friends are critical and using communications like this is big.
So, yeah. That's great.
Where are you in, are you in touch with the So like the, like the, I guess the Sort of folks from from previous companies, you're working.
So we're, we're like, have they like the I guess you have an interesting vantage point to see what alumni of equities companies went on to do and What have you seen of folks who have sort of use that experience as a launching pad for Yeah, I mean, in particular, you know, you do keep in touch with your old teams, you're very proud of the folks have stepped out You know, the pedigree that was developed in some of these companies have are the CEOs of new companies in Japan and Australia and all You know, they just been very successful.
So you read on that, you know, I spend time two things. I'm also passionate about it.
I have to to daughters to women. Investing in that. So before I left digital, you know, I was I sponsored the women in technology group and That WTF group, you know, they've done really some amazing things for that community, you know, I wish I could participate.
But, you know, they, you know, I do introduce you know global folks to that group.
I like the I masons what they're doing because Unfortunately, there's too many older people like me still in the industry and we need young diverse talent.
And we need to invest a lot more in training and development.
So I encourage all my clients to get back and invest in it.
So those are two groups that I'm particularly Proud to sponsor and recommend because we need to get back and we need to develop talent out there.
So it's, it's good to reach out to those folks as well.
Well, I really appreciate your, your, your making the time to to chat Jared and hopefully you'll be back on the golf course.
Me too. Yeah. Well, thanks. I appreciate it. Thank you. Thank you so much.
Take care. Thank you.