NYU Schack Blueprint: Technological Infrastructure and How Companies Like Raeden Can Play a Role
With our growing reliance on the use of high-speed internet and compute-intensive applications such as AI, graphics and 3D intensive applications, virtual reality, video conferencing, and latency-sensitive applications, the line between real estate, infrastructure, and technology begins to blur. The ever-increasing requirement to handle larger and larger files, manipulate them graphically, and do so with managed latency means the actual location of high-power computing is becoming a critical criterion.
Real estate owners could play an integral part in adopting the needed digital infrastructure, yet there has so far been hesitation. Raeden, a startup out of Silicon Valley, provides a solution to bridging advanced technology deployment and real estate, creating a marketplace where the worlds of real estate, data centers, and telecommunications can meet to build the infrastructure we need.
Today, we have begun a transition to relying on 5G wireless connectivity and edge computing, which requires a different technological deployment than we have needed in the past. Our communications and computing infrastructure have needed changes over time with the emergence of innovative technologies. When data centers first emerged in the 1940s and 1950s, they looked quite different than today, existing as windowless rooms at universities and military bases. After IBM introduced TRADIC (the first transistorized computer in the USA), data centers were suddenly needed by commercial companies. In the 1970s, the introduction of microcomputers such as the Digital Equipment VAX extended capabilities to companies that could not afford mainframe computers. When the dot com bubble occurred in the late 1990s, companies needed expensive data centers and internet infrastructures, leveraging new data center technology, and requiring significant upgrades to local power grids.
With the rise of cloud technology in the 2000s, the number of corporate data centers began to shrink as workloads moved to fewer, larger, shared data centers such as Amazon’s AWS and Microsoft’s Azure. Cloud service providers like Amazon, Microsoft, and Google need physical data centers to provide their services. While they own their data centers around the globe, they lease 70% of their data center footprint from data centers owned by other companies such as Lumen Technologies. Enterprise server rooms began to disappear, and we began to see massive data rooms such as Switch Inc’s 7.2 million square foot facility known as the Citadel Campus. Today we see a shift again with 5G and edge computing enabling AI, graphic-intensive and latency-sensitive applications requiring higher data volumes at extremely fast speeds.
Technological infrastructure takes a different shape today compared to the preferred architecture of only a few years ago. With the speed and needs of our devices, tether-free graphic processing, artificial intelligence, steaming, and autonomy, there is too much data to travel with managed latency to the cloud and back in the demanded time. Our infrastructure needs to get as close as possible to the end user. The solution is edge infrastructure which allows for the “data center” to be small, localized, and closer to the end-user devices, and the “connectivity” to be high-speed wireless which requires fiber infrastructure for high-speed network connectivity. Edge Computing is a framework that brings data sources closer to our devices and servers. 5G has completely changed users’ physical reach and mobility, but it requires fiber optics for network connectivity.
There is a growing appetite for 3D, data-intensive, large compute, low latency, and tether-free services from internet and technology companies, and this demand will continue to expand as increasingly large companies rely heavily on or provide these digital services. One Medical, an Amazon company, does not just provide medical services but virtual care. Today, most companies function like internet companies requiring the infrastructure to support their day-to-day activities. According to Synergy Research Group, in the last year Cloud Infrastructure service revenues reached $227 billion. The recent explosion of AI has led to an arms race among tech companies to integrate AI. The need for data centers, specifically last-mile data centers, continues to increase exponentially. The need for advanced cellular support and edge computing is clear.
This shift has resulted from the anticipated disruption of AI, 5G, and IoT. The rollout of fiber and 5G cellular required massive changes in the Telecom providers’ networks for which the Telecommunication giants and internet providers have been preparing for years. But the new applications also need a new architecting of the “last mile,” the short geographical distance between the telecom providers network and the end user. Edge computing, pico-base stations, and their network connectivity and backhaul now have critical requirements of the buildings the end users occupy. There is a large and primarily unmet demand for these spaces. Yet, many real estate owners fail to take advantage of the opportunities to adopt and incorporate innovative technologies. At the intersection of technology and real estate, especially in last-mile technologies, there is a desire for collaboration and untapped potential for both sides.
Most digital tenants, including large enterprises, technology, telecommunication companies, hyper-scale cloud providers, and network carriers, need space to deploy their technology. For technology service providers, it is difficult to determine and acquire the best places to locate. Many real estate owners are unaware, uninterested, and unsure about if and how to monetize their space for technological deployment. Real estate owners are thinking about the needs of tenants and consider the provision of telecom and computing services not as a source of income but as the fourth utility. There is a lag between changing needs for technological infrastructure and understanding and action from the real estate industry, and that is where Raeden comes in.
Founded in 2019, Raeden is a technology startup founded in 2019 by a team from the data center, telecommunications, and real estate industries. Raeden provides a marketplace to help facilitate the connection between real estate and digital infrastructure, anything that transmits, processes, and stores data. Their platform connects edge and network technology to an inventory of real assets, including office buildings, raw land, and industrial facilities allowing customers to find and distinguish between deployment-ready locations around North America and the UK. Kari Schrader, Raeden’s Co-Founder and CEO, worked in real estate for seven years when she realized that investment opportunities were being missed simply due to a lack of ease and understanding around these opportunities. Raeden lowers the barriers for these deals, providing technology companies with the information needed to access the best locations and giving real estate owners a simplified investment process with a trusted partner.
At the 2023 NYU REIT Symposium, Brendan Wallace from Fifth Wall discussed the changing role of real estate companies to function as technology companies, utility companies, and infrastructure companies. Does the industry need intermediaries like Raeden? Will real estate companies make these shifts on their own? The alignment between real estate and technology has increased significantly over the past decade, and companies like Raeden will play a big role in unlocking the potential at the intersection of both industries.