Do you need more data?

3 minute read

Matthew Norris

Director, Real Estate Securities

The digital world is developing at an extraordinary pace, and we are often asked, how does an investor capture the opportunities when everything is moving so quickly? Doing so is certainly challenging. That’s partly why we like the infrastructure assets supporting the software, not the software – or indeed the hardware - itself.

For example, we don’t know if Microsoft or Google will win the battle for supremacy in the search engine world, or indeed if ‘digital personal assistants’ will replace the search engine altogether. Neither do we if know if it will be Tesla or Waymo that develops the best autonomous vehicle. What we do know is that all market participants are going to require data centres to manage, monitor and secure the data they need.

The mass production of data

In his 1928 book Propaganda, author Edward Bernays commented that "Mass production is profitable only if its rhythm can be maintained." I think of digital technology and the data it requires in a similar way.

Consider this: Intel estimates that autonomous vehicles alone may generate 4 terabytes of data each day*. That’s the equivalent of an average person using a smartphone for 60 years**.

There is always the threat of future technologies – low orbit satellites being a notable example. In time they could compete with infrastructure on the ground but not in the foreseeable future. Why? The mobile network operators have simply invested so much in terrestrial based physical infrastructure attached to communication towers (owned by next generation infrastructure companies such as American Tower, Cellnex and Crown Castle International), that they are not going to switch them off overnight. They are going to want to get a big payback first.

What’s more, latency - the amount of time it takes for data to travel from one place to another through the internet or indeed through a network – takes longer travelling from the ground to a satellite and back down again, than via a communication tower. Ask any gamer what they would prefer, and a ‘lag-free’ tower is likely to be the answer.

Kenneth Rogoff, professor of economics and public policy at Harvard University recently highlighted*** US economist Robert J Gordon’s view that ‘post-1970s inventions – even the computer revolution – are not nearly as economically important as, say, the steam engine or electricity generation’ and we would argue the same for the physical digital infrastructure.

The so-called ‘Fourth Industrial Revolution’ in which digital technologies pervade every area of life, from how we work and play, to how we navigate day-to-day life, is well underway and the evolution from analogue to digital has happened startlingly quickly. The technology now at our fingertips operates at a speed and sophistication that would have once fallen well beyond the reach of many our imaginations.

Find out more about the VT Gravis Digital Infrastructure Income Fund here.

*Source: Colocation America, Autonomous Cars as a New Generation of Data Center Requirements, 16 July 2020

**Based on average data consumption per month of 5.6GB, source: 3G, How much data do I need? 24th January 2023

***Source: The Guardian, Chinese economic slowdown is a result of debt supercycle, 21st August 2023

Important Information

This article has been prepared by Gravis Advisory Limited (“the Investment Adviser”) and is for information purposes only. It is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Any recipients outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction. 

This article should not be considered as a recommendation, invitation or inducement that any investor should subscribe for, dispose of or purchase any securities or enter into any other transaction with the VT Gravis Digital Infrastructure Income Fund, or any other Fund affiliated with the Investment Adviser.  The merits and suitability of any investment action in relation to securities should be considered carefully and involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of such securities.    

Although high standards have been used in the preparation of the information, analysis, views and projections presented, no responsibility or liability whatsoever can be accepted by the Investment Adviser for any errors, omissions, misstatements, loss or damage resultant from any use of, reliance on, or reference to the contents. The views and opinions contained herein may not necessarily represent views expressed or reflected in other Gravis communications, strategies or funds and are subject to change. 

VT Gravis Digital Infrastructure Income Fund, a sub-fund of VT Gravis Real Assets ICVC, is a UCITS Scheme Open Ended Investment Company (“OEIC”). 

Past performance is no guarantee of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. 

Gravis Advisory Limited (Registered Number: 09910124) is an Appointed Representative of Valu-Trac Investment Management Ltd, which is authorised and regulated by the Financial Conduct Authority.  

Gravis Advisory Limited’s principal place of business is: 24 Savile Row, London, W1S 2ES.


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