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HomeMagFall 2019The Next Internet: Driven by Real Estate - Vapor Io

The Next Internet: Driven by Real Estate – Vapor Io

More so than ever before, real estate will enable the next generation of internet technology. New real-time applications such as autonomous vehicles, AR/VR and 5G networks will rely on cloud computing deployed at the “infrastructure edge,” or the edge of the last mile network. Edge data centers housing vast quantities of computer, storage and networking equipment will depend on a diverse collection of urban real estate locations, empowering the owners of commercial buildings, rights of way, parking lots and cell towers to benefit from the next generation of internet infrastructure.

Without the appropriate real estate to support these edge data centers, the next generation of the internet will not come to pass. Compared to previous internet deployments that prized a few hyperscale locations in mostly rural towns where land and power is cheap, infrastructure edge computing, as in Vapor IO’s Kinetic Edge, taps the previously hidden value of urban real estate.


Much like a classic three-act play, the history of the modern internet can be separated into three key acts that help us understand how this most recent act, with the advent of edge computing, is fundamentally different than the first two acts, and how it will be driven by unlocking the value in distributed urban real estate.

Act I: Setup

In its original form, the internet was mostly a network with a small number of users relative to the world wide web we know today. There was no “cloud” to speak of, the most important thing was to get data from point A to point B, and any distributed infrastructure was to provide the capability for the network to self-heal in the event of a network or site disruption. This architecture worked well enough to establish the internet and for many years provided enough performance and resources for it to operate.

Outside of a few locations, this early stage of the internet depended very little on urban real estate. While there were few prominent facilities, such as MAE-WEST in San Jose and Los Angeles, the number of locations used for internet infrastructure at this stage was very small. However, this would soon change as the internet grew in popularity.

Act II: CDNs and Regionalization

With the advent of the modern web browser and new higher-speed connection technologies, such as DSL, the internet continued to grow exponentially through the 1990s. With this growth, and the emergence of the consumer demand for movies and instant page loads, the internet entered a stage of confrontation; the existing infrastructure needed to be augmented with a second tier of internet infrastructure that provided resources and capabilities to the users of the internet on a more regional basis than was done before. This stage of evolution of the internet brought about the advent of regional data centers and Content Delivery Networks (CDNs), both of which brought internet infrastructure closer to their users than they had been in the original internet.


This second tier of internet infrastructure meant that more real estate was being used to support the internet in urban areas, as regional data centers and CDN nodes extended further from the few centralized points of the past towards their users, who were primarily concentrated in urban areas. The performance advantage of this infrastructure evolution was clear: By positioning vital internet infrastructure closer to its users, large volumes of traffic were able to remain within a single region and often did not need to transit across the country — let alone the oceans — in order to retrieve essential content.

This regionalization of the internet created a second tier of infrastructure that depended on urban locations to address the population centers. This second act of the internet brought about significant performance and scaling enhancements, and in some cases allowed real estate owners and operators to benefit meaningfully, as it also helped drive the expansion of 3G and 4G cellular data networks into urban areas. However, as the internet and its users continued to evolve towards very high bandwidth, low latency use cases, a further step was needed that relies upon urban real estate to realize its true value.

Act III: Edge Computing and Urban Real Estate

The third act of the internet seeks to resolve the problems with our current infrastructure and is where we stand today. To meet the current and future needs of a diverse set of users, from consumer to commercial to connected public safety and other life-critical use cases, the internet needs to go beyond regional deployment and operation, and instead will be deployed locally.

During this stage of internet infrastructure development, vast numbers of edge data centers are being deployed at diverse urban locations all across the United States. By the end of next year, over 30 major metropolitan areas from one side of the country to another will have multi-site operational deployments of this technology, with a minimum of three sites per city. That’s a lot of connected urban real estate that needs to be prepared, leased or acquired and operated in a way that adds significant new value to property owners and the entire real estate value chain.

What do these edge data centers look like? Typically, they are deployed outdoors as a single sealed unit that accepts power and network feeds from the connected real estate location. They are around the same size as a commercial shipping container and are designed to be operated in areas with urban noise limits and other environmental considerations such as no need for access to an external water supply to cool the dense computer, storage and network resources inside each edge data center. This makes them suitable for deployment at a large number of urban real estate locations, turning what may be thought of as a lower-value real estate asset into a key part of the growing digital economy and of the upcoming 5G networks.


Austin-based Vapor IO has ambitious plans to build out edge infrastructure in the top 30 US cities over the next few years and has initially partnered with landowner Crown Castle (NYSE: CCI) to leverage Crown’s land holdings in cities that include Chicago, Atlanta, Pittsburgh and Dallas.

Vapor IO has developed a unique deployment model it calls the Kinetic Edge, which places three or more custom-built micro data centers in a metropolitan region, then meshes them together with high-speed fiber. By stitching together many data centers into a software-defined network fabric, Vapor IO can deliver infrastructure edge computing across an entire region. Each of these micro data centers requires a suitable location — hence the new demand for commercial real estate. These data centers are often placed on land used for cellular infrastructure, but can also be deployed in parking garages, on building rooftops and on municipal rights of way.

As the leading edge data center company, Vapor IO designs, deploys and operates the Kinetic Edge, a nationwide network of edge data centers that is currently operational in four cities across the United States, with a footprint of over 30 cities planned by the end of 2020. These photos are from the many Kinetic Edge deployments in Chicago, Pittsburgh, Atlanta and Dallas:


The advent of infrastructure edge computing, as seen in Vapor IO’s Kinetic Edge, is the next step in the evolution of our nationwide internet infrastructure. As well as enabling a new set of applications and 5G networks, the Kinetic Edge is a prime example of how urban real estate is shaping the future of the digital information systems that we all use today to stay connected.

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