HITT- Midyear Review on AI and Cloud Trends- June 3, 2025

In a midyear review, Telarus VP Koby Phillips and his team discussed key trends shaping the cloud and AI landscape. They highlighted the shift towards hybrid cloud solutions and the migration away from VMware, emphasizing the cost benefits of Eleven Eleven’s partnership with AWS. AI’s integration into various sectors, particularly in HR, was a focal point, showcasing its potential to enhance productivity and streamline processes. The importance of data readiness and security for successful AI implementation was also stressed, alongside the need for meaningful customer engagement to address challenges. Overall, the discussion underscored the growing opportunities in AI and cloud solutions as companies adapt to evolving demands.

Transcript is auto-generated.

Introduction to Midyear Review

Today, we feature a midyear review.

Did I really just say that? We’re nearly six months into this year. Anyway, a midyear review and discussion around cloud solutions and trends, the the transformative power of cloud computing, and the powerful support available to Telarus advisors from our cloud practice team.

Koby Phillips is Telarus VP of cloud, and he’s joined today by Telarus field solutions engineer, Chad Muckenfuss, and by Telarus sales engineer, Mike Kowalski.

Koby, Chad, and all, welcome back to our Tuesday call.

During the introduction, I don’t I don’t know who came and who left. Chad, how are we doing?

We’re doing well, and Koby’s here to join us too. So, thankfully, we can roll forward here with everything.

Alright.

Just like to keep it interesting. Thanks for, making anybody nervous.

I would You stiffed us on rehearsal.

I don’t know where you are. The dance number went completely out the window. No.

It’s good to have you here.

Koby, welcome.

No. I just like to make Chad sweat. Just say, hey. Like, you’ll see. And, anyone that’s worked with Chad will know he will, come in and perform more than adequately and and would probably do a better job than I’m gonna do.

But we’re gonna give it a shot anyway. So, Chad, I appreciate you, not nervously texting and blowing me up while I was trying to get over here. So, I’m excited to be here to talk just a little bit about the mid year review, everything we’re seeing, and really what the conversation, guys, is that we’re gonna focus on will be what is actually selling right now, what’s creating funnel, and what conversations are driving all of those things. And I think, it’s not gonna be a fancy PowerPoint.

We don’t we’re not gonna draw anything out. We’re just gonna have key conversations. So my advice to you is take ample notes. We always have the follow-up and the recap emails in case you do miss anything.

Current Trends in Cloud Solutions

But, Chad, and then, as Mike is able to join us coming on here shortly, we’re gonna highlight where you guys are seeing wins, what we’re seeing in the marketplace, and how we’re attacking those. So, Chad, you know, a lot of stuff’s been happening this year already. We’re coming off the the the key trends last year where all we talked about most of the year was Broadcom and VMware and everything like that. We’re finally seeing some of those deals actually hit.

We’ll give some updates on that. We’re gonna talk about AI. Shocker. I know that was probably on everybody’s bingo card that we’re gonna discuss.

But more importantly, we’re gonna talk about the bridge between what we’re seeing in cloud bridging into cyber, which is an easy step, but also back into network and into to CX and, the UC conversations now with that agentic, that playbook that we’re putting together. And then last but not least, really that good old fashioned hybrid approach, putting the right workloads in the right places.

Hybrid Cloud Impact

So, Chad, what are you seeing out of those three elements make the most impact right now, and where are you seeing a lot of wins coming?

So a couple of places. First of all, I think, the hybrid cloud conversation is one that continues to be at the top of the list with companies that, again, you and I have said it time and time again on on these types of presentations that the big push to public cloud was was major because of COVID.

Cost overruns still continue to be a situation. So what’s happening is workloads are being pulled back to private cloud and building a hybrid model so that everyday workloads and applications that are daily use are put in a private cloud, and then storage, disaster backup, all that type of thing is done in the public clouds where it can be cost contained and and utilized that way. What I’m seeing a little bit more is, the concern in and around data governance to touch on that aspect of things too. So, you know, figuring out how in the public cloud aspect can can data governance be implemented properly so that as companies begin to embrace and leverage AI, they can also have the knowledge that the data is safe and not out there for public consumption and be able to utilize that in the manner that they need to both from an internal, use side for employees, etcetera, for the company, and then external facing too, that we’ll touch on here in a little bit when we dig a little deeper into the AI model stuff.

Transitioning from VMware

That’s the that’s the two big areas that have been consistent specifically in the first half of this year. I would say to your point also, the VMware discussion has not gone away.

We have some really good opportunities.

I’m I’m working on two actively right now that are leaving VMware behind. They made the decision to to one, to Nutanix, one, to Hyper V, and we have the suppliers in house to be able to bring them over, help with the migration. It’s not a huge uplift for the IT teams on the customer side, and those have been really, really good projects, albeit a longer buying cycle, because that VMware was a big, a big slap in the face last year to companies, and and, the the customers there. And then in turn, now they’ve made the decision. They’ve kinda settled down, taken, the emotion out of the decision is the best way to phrase that, and now moving over to what needs to be, needs to be done in the best interest of their organization. So lots of stuff happening, continues to happen.

Supplier Highlights and Partnerships

I’m excited to talk about too as we dig in a little bit deeper here the, the connectivity side of things and how some of the new features that we have through our suppliers are really cool.

Let’s break the golden rule. What supplier did the Nutanix?

The supplier that did the Nutanix, well, we’re not we’re not supposed to talk about that.

Review. So it it ended up with Expediant, was was the one that’s Yeah.

We’re gonna end up highlighting a few suppliers here, the guy, today and make sure that, you know, we’re spreading the love around a bit. But I wanna make sure you guys know who we’re who we’re going to for that. Nutanix, as an as a service isn’t exclusive to Expedient anymore. Right?

A lot of people dump that, and they said, hey. We’re just gonna focus on our VMware partnership. I think Broadcom put a lot of pressure on it. We saw Expedia.

We see some others that are building out some Nutanix offerings that’ll be coming out to give some other options there. But I know Expedia has done a really great job on those type of opportunities.

Anything else you’re seeing on that VMware conversation that’s peaking interest? Because it’s not only it’s not just migrating away. Right, Chad? We see a lot of, like, companies that are going, hey. We’re gonna stick with VM, but we don’t wanna manage this at all anymore. And we have a a ton of different great suppliers that are helping with migrations onto their platforms.

What does that look like?

So that that looks again, that’s that’s a great point. A lot of it comes down to the customer saying, it’s not worth my time or effort to try and maintain this at a level that that our premier suppliers can handle for them. So what happens a lot of times is now those IT teams that have continued to be slimmed down, are pushing that over. So we’re we’re doing migrations onto a private cloud solution for them and taking all of that management off of their plate so that they can focus on streamlining what they need to do and what their focuses need to be internally instead of managing all that VMware. Some great successes with eleven eleven, since we’re calling out suppliers now, with that with that.

Strong.

Yeah. And and the other cool thing too is, you know, sticking with the eleven eleven side of things, You know, their their relationship with AWS, has really kind of kicked the door open for, s three storage and and all of that, and we’ll get into that more as as the call goes along here. But eleven eleven has done some great things. They’re a really good supplier for that transition. Again, they throw a bunch of engineering resources at that transition, so the customer isn’t responsible for the big uplift of migrating all of that from their existing, usually on prem, VMware to, private cloud VMware. So it’s it’s a really good streamlined process.

Data Storage Innovations

Yeah. That, let’s dive into the data storage conversation real quick. With eleven eleven in particular, that has been a big selling point.

I’ll give a little bit of the background and story on it and give an analogy for everybody on the call that you can kind of wrap your heads around it a little bit better. So eleven eleven partners with AWS on s three stories. So, Chad, give a quick snapshot of what that that product is from AWS, the s three buckets, and what that’s meant to the cloud based object storage community for years.

Yeah. So the the cloud based s three storage is great for cold and warm storage.

It’s it’s their premier, storage side of things. It is literally one third the cost of going to AWS Direct, buying through eleven eleven in that partnership. And what it allows for is, really a huge cost decrease for the customer in in long term storage. So being able to take information, drop it or migrate it, not drop it, but migrate it over to AWS in that s three storage bucket, be able to keep it there, touch into it when they need to.

The, ingress and egress is is a part of the fees included in the in the whole, offering through eleven eleven. So, again, it’s extremely cost effective. I have been moving literally petabytes of information over to that that model, over the past six months here. We had some major, major, wins in that aspect of things for this whole, this whole AWS storage aspect.

It’s been great. It’s been really, really good. It’s a a real easy door opener for conversations, you know, partners with your customers to be able to ask where where the customer is currently storing their data, and it’s a really easy door opener for us to get in, get an easy win.

Competitive Edge in Object Storage

There’s there’s not a competition that touches that right now in that space, and it’s it’s direct competition with Wasabi. So if you’re working any deals that are Wasabi based, I can almost guarantee that we can win with this product set too.

Yeah. So the the story behind this guy so everybody has a little bit of background is AWS partnered He said, we want you to go compete this product with Wasabi and another company called Backblaze. So that’s always been kind of the low cost option. And in doing so, they gave them the ability to sell for about seven dollars a terabyte, the same product that AWS sells directly for twenty three dollars a terabyte.

The best analogy that I can probably, kinda talk through here is the, kind of more in the aggregator space for network. So imagine, we’ll say AWS is AT and T in this space, and ACC is eleven eleven. That’s kind of like they’re they don’t own eleven eleven, but the partnership’s very tight. They go to them and say, hey.

We wanna make things easier and streamline it and be more cost effective, but we don’t wanna dump our prices. So go compete in the in that space.

Eleven eleven’s networking background really gave them an advantage here because that’s what helps with the egress type charges where they network it all out. So for seven dollars a terabyte, you get a flat storage fee with no egress charges. When you bring that up to a client and you simply go, what are you doing for your object storage? I have a great product here.

It is an amazing door opener. And what we’ve noticed is once we get in with one of these door openers, eleven eleven, TierPoint, Expedient, Thryv, RapidScale, etcetera. All these guys have the propensity to grow those accounts once they get in there. They go you have levels of protection in the agreements.

They’re gonna make sure that you ride along with them. And what we’re seeing is about a thirty to forty percent growth rate still. Once a deal is sold, that inside of those opportunities so you sell a dollar today, twelve months from now, we’re seeing about a dollar thirty to a dollar forty build with these type of suppliers.

Expanding Opportunities through Data Storage

I just named a few. There’s there’s many that fall into that bucket. And then the other piece of it is once they get in there, we see that handyman effect. Right, Chad?

I we’re we’re talking about data storage, but then that falls really quickly into a backup and and disaster recovery and then some additional infrastructure. And And it becomes like when I call it a handyman, you get somebody over to your house to fix something and you realize you got a lot of other stuff on your on your list that they can help with. All of a sudden, they don’t leave your house for a couple weeks. They’re coming back every day doing more and more services for you.

So that’s something that we’re seeing continue to be a a great entry point into these conversations amongst a couple others that we’ll continue to highlight. So we hit on, you know, that data storage conversation, and, I’m gonna go and answer the question in, the chat from Steve. Absolutely. What we’re seeing is, Microsoft’s product that aligns to eleven eleven.

It’s called Azure Blob Storage.

We’re seeing, wins across the board. This has happened now, multiple times where our clients in Azure Blob Storage will then migrate their data over to eleven eleven. It usually saves, I think it’s about on average of forty to sixty percent depending on the rates that they’re getting from Microsoft.

And it’s, then you got the the migration plan and all of that that you put into place. It’s a pretty easy conversation. If you guys were had the background like me, or I grew up at a company called Integra, and, my first job is, you know, the fifty cards, fifty calls a day, knock on every door, and you’re just asking for phone bills so you can take it back and do an analysis on how much you can save them.

If anybody had lived that life, right, throw it in chat. You can just say me too.

Or, if there was a if there was any kinda, like, a nightmare type of, emoji, we could put that in there. But it really did happen. And once you got a bill from, like, a let, Chad remember this? Like, you get a bill from AT and T or Verizon or any of those type of place, you’re like, oh, this is gonna be an instant sell.

Right? I’m gonna save these guys thirty or forty percent. That’s what we see with this data storage product. It’s it’s gonna grow into a couple of the other things that you’d mentioned around cost optimization.

You mentioned that two or three times. Like, we’re trying to save money. Everybody needs a very much aware of what’s going on in the economy.

Data storage is one of those things that people just kinda set and forget. They pay the bill. This is creating a conversation where you’re like, hey. I can save you twenty or thirty grand. I mean, a couple of petabytes, we saved the company forty grand a month just by moving their data storage.

That is now expanded where they are having eleven eleven do some other services. So, again, it’s then ops seems to be a scary conversation for a lot of people. But if you really focus on it, it’s all it’s cost optimization and resource optimization all driven in together.

And that’s what we’re being able to provide a lot of the times with a lot of these solutions.

AI as a Game Changer

Speaking of, Chad, you kinda teased it a little bit earlier. The other major door opener that we’ve been seeing and that we’re having a lot of success with, you kinda talked about the AI conversation.

So what you’re seeing in that space, there’s there’s multiple pieces to this, but what are you seeing in particular that’s starting to move the needle in AI?

So what’s moving the needle in AI right now and especially the the conversation in and around it is we try and, you know, AI is a is a topic of conversation with virtually every call that we have across the board with our partners, with their customers, all that. So what we’re looking to do is instead of, you know, hey. The the world of possibilities, we try and narrow it down to some specific areas where we can get in that company, score a win, get some buy in on on the AI and how it’s helping the company, and then go from there. And and, again, the same mentality that we’ve had with a lot of other of the, offerings that we have is a land and expand like we just talked about with storage.

Wins with AI are small wins, but they open really big opportunities once you have that small win and a buy in from that customer.

So with that being said, some of the wins that I’m seeing more and more often here are actually companies that are leveraging the AI for internal facing information, specifically in and around HR. So what we’re seeing is chatbots and voice bots being implemented and being utilized in the HR departments to be able to handle onboarding and offboarding new employees.

Instead of an FAQ on their website or pointing some somebody somewhere to a file, they are actually having interactive chatbots set up. Again, the guardrails are built around the HR information internally. It’s secure. It’s typically utilizing some kind of private cloud, in that instance, although we have we have them set up also in Azure instances with Microsoft leveraging Copilot too.

All of that to be said is, hey. I need my my w four form for a new employee coming onboard. So it’s it’s forms. It’s things that you you have questions on.

All of that information because it’s it’s a question response type of model, it’s a very easy implementation. It’s a very easy win, and it eliminates a lot of time and effort on the HR staff to be able to onboard and off board employees quickly and to allow the HR teams to be able to do more of what they were brought on for instead of the clerical type model of stuff. So it’s a productivity enhancement that has that, again, I’m seeing time and time again is a huge win. So leveraging that as as small wins and then growing that small win once you have buy in from the customer of, oh, AI does really help.

Measuring Productivity Gains with AI

Here’s what I can point to as look look at the increased productivity, look at the, savings of time and money so I’m not paying HR staff to do any of that. And it’s been it’s been really, really good, and it just speaks to where AI is going. It’s a productivity tool first and foremost.

And from there, I think it’s just how that’s leveraged within each company’s unique ecosystem.

Yeah. And it’s a different conversation than I’m gonna go save you money on data stores, but the outcome, right, can still fit in. The number one thing that’s going on right now outside of the the AI conversation is continually FinOps. Right?

Give me like, how do I leverage what I’m utilizing more? How do I get more out of my resources? And, Chad, you just gave a really great example of how companies are doing that. And we’ll invite Mike into the conversation as well if we wanna get him going in here, Chandler, if you wanna get Mike, onto the bigger screen with us.

The, the conversation, Mike, just to catch you up really quickly, and then we’ll do a recap for the audience here. We really covered out where, we’re seeing a lot of the wins in the Broadcom, space, in migration of VMware on either to, you know, infrastructure that’s not owned by the company or by the customer or onto a different platform, whether that be Microsoft led or, Nutanix in a lot of instances.

We’re now kind of on to the conversation around AI, spinning off the conversation around what we’re seeing wins in data stores, you know, centered around eleven eleven. So rules of the game, Mike, just so you’re aware. Okay. Gloves are off. We’re mentioning suppliers in which that we’re seeing the success with, success, with. So you don’t have to guard against the supplier’s names. It will highlight them, and we’ll make sure that, we’ll call out anything else that we’re seeing in the major trends for the for the group here.

Ultimately, Chad, on that AI conversation, finding a good use case like that. And what you just gave to to the audience is a really great one in where we’re able to implement. Who are you seeing? And I I think I know the answer, but we’ll add a couple of other options in there too most likely. Who are you seeing kinda lead that that charge on that internal, you know, process change?

Success Stories with Yellow AI

Yeah. Yellow AI has been the one that that I have had the most success with, and they have done a tremendous job of going in. They they are able to interface with all different types of software, overlay existing services and functionality, applications, all that type of thing. And, again, the wins there have been really, really good, especially around what I what I described. So you have, you know, a a bunch of information that is, an ask and answer type model, super easy to implement.

It’s it’s a, I don’t wanna say it’s cookie cutter because there are some there are some nuances that need to be set up and properly designed, but Yellow and their team really goes in, does a great job on the discovery on the front end, and then turns around and is able to present a really good strong product on the back end with the option to really grow and expand that internally within the company and customer facing as well.

Yeah. And, see, I I want everyone to kind of witness what we’re seeing here. We’re on a cloud based hit series, and we’re bringing up yellow a that’s traditionally been in our CX bucket. Right?

But that’s what this this is starting to expand into all these conversations. So I’ll take you guys on a quick journey. Think about what Chad just laid out out and might jump into if if you have anything to add as as we kinda start to tell this story. But it’s around the data.

The Value of Data in AI Strategies

Right? If you start to do this, follow the data model, it takes you everywhere you wanna go in the conversations with your customer.

I don’t know. Several years ago, guys, we had that was it Forbes? It was an article that came out that said data is new oil. Right? It’s the most valuable thing in the world.

And that has with this boom of AI, it has really just even set it off even to a higher standard of truth where, like, everybody that is looking to do anything in technology now, first rule is, is your data in the right place? Is it secure? Is it cleaned? Is it usable? These are all the things that are now being asked more and more and more. And it’s an analogy I’ve used before, but I’ll I’ll use it again here in case you’ve heard it. I just don’t wanna sound too repetitive.

Chad, Mike, you guys are gonna hear it all the time. But the, the analogy that I was looking at is you have your house, and it’s not, you know, clean. It’s not dirty, but it’s not picked up. Right?

Now you’re having a party. And you gotta go, and you’re all of a sudden, you got an hour and a half before people start showing up, and you have more motivation than ever to then go and start to clean up that that space that you’re gonna be hosting in, make sure everything’s tidy and and looks its best. That’s what every IT organ part of, every organization’s looking at right now when it comes to their data. All of a sudden, everyone’s looking to go, hey.

Data Readiness and Organizational Preparedness

We want this technology. We wanna be able to do this, this, and this. How’s our data look? And they’re like, oh, no.

We gotta go clean up that house really, really quick. And so those are some of the projects that Chad’s mentioning, that starts off small and then grows because there’s data there’s data cleansing, there’s data readiness that needs to happen, etcetera.

And then that leads into Mike as as one of the most, like, under top like, underutilized, not spoken about a lot, but then when we get these deals, they grow like crazy. Database as, database management and a kinda database as a service. Who are you seeing hit in that space? You know, traditionally, entirety has done really well. We’re seeing some others start to emerge. Are you seeing a lot of growth in that space and conversation around data management as well?

I am. And I can’t speak to specific suppliers at this point because we probably have a half a dozen that are going through our supplier vetting process that really have that ultimate focus on the data because it is really kind of a specific thing that a a lot of the suppliers in the portfolio have it kind of as a offside service, but the whole business isn’t designed around actual data.

So I think there’s some really exciting things that are coming up through the channel that we’ll be able to kind of, talk, socialize a little bit in the future. I nothing is approved yet, but I’ve been hearing a lot more about data. How do we, capitalize on our data, monetize our data, protect our data, especially when it comes to LLMs and people are pumping in classified you know, company classified data into ChatGPT, which now becomes part of the, you know, the language out there for everyone else to capitalize on. Right?

How do we minimize that? How do we mitigate that? How do we control that? So as of today, bring those types of opportunities forward.

Navigating Customer Conversations on AI

If you’re having these conversations with your customers and it’s it’s kind of tricky for you, you don’t know the the the the path, the talk track, the way to handle these, the best way you can do is it sounds like you need some help here. Let’s get on the phone with one of one of our engineers so that we can really dig into this and have a meaningful conversation.

Well, speaking of that, I’m gonna tell a quick story that just happened yesterday. So this is this is, a customer meeting that I took part in with one of our advisers.

As we’re we had about it’s about an hour plus long meeting. We We had a list of things to go through. And as I walk away, kind of like last five minutes of the meeting, posed the question, hey. What are you what are you guys doing for, like, your AI strategy and and everything when it comes to chat g p t.

Now this organization’s, kind of larger mid market style company, and they said, well, we put an AI governance team together. We’re letting them have Copilot. Said, well, what if you guys could have fourteen major LOMs up to twenty depending on which option you went with? Because we have a couple of suppliers that can do this.

And that allows for, security that puts everything in security, in a secure and compliant environment for you for twenty ten to twenty dollars a user. And all of a sudden, that became the number one thing they wanted to meet with first immediately. So the guys the companies that can do that are company named Liminal.

And I might be butchering that name. I always kind of mess it up a little bit, and Expediant again. So both of those guys have come in and put together a secure environment and platform for multiple LLMs like ChatTPT, Gemini, and others to be able to go in and for companies to utilize right away. Chad, you’d mentioned how that can, talk through the, you know, bringing in your HR data and things like that. One of the best examples I’ve seen in a demo, just to kinda give a little bit more clarity on that on top on top of the onboarding is imagine when a cussed a comp sorry. An employee has to look up their insurance.

Hey. What’s my PPO look like? What’s my edge you know, what’s my health care plan? That generally would mean an email to HR.

They then have to find the documents, email it over, which they probably have ready. But all of those things that they talk through now can be done in seconds and right there and delivered internally. And, again, safely and secure because the model that they put together in these platforms. So this has been a a tremendous door opener.

We’re seeing a a tremendous amount of funnel. We’ve had advisors host customer facing events where they had twenty to thirty different customers show up and immediately register twenty, you know, twenty plus opportunities out of it. So this is a pressure field, environment, for organizations. They’re getting a ton of AI pressure, and so this helps kinda, like, relieve that that stress quite a bit.

You know, Chad, as far as the AI modeling goes and the data and everything, anything else that you can think of in any other major opportunity that I’m I I can Yeah.

AI ROI in Manufacturing

I wanted to I wanted to address there was a a couple of, things a little little, early on in the chat there where is AI hype, BS, or real? Where’s the ROI? So I’m gonna give a specific example that shows this, of an of an opportunity. Again, Yellow AI and Boost AI were two of our suppliers that bid on this project. It’s a manufacturing company that makes aftermarket high end exhaust systems, for think Porsche, Lamborghini, Ferrari, Bentley, all very high end, stuff.

They have three specific customer service representatives that are there to handle all inbound calls. It’s a smaller shop, so this is not a big, you know, manufacturing company. It is an SMB, and they’re US based. And what they were struggling with is those three customer service reps are getting pinged. They’re operating on a twenty four seven or twenty four not twenty four seven, but twenty four hour schedule during the work week. So Monday through Friday, twenty four hours a day because they ship globally.

What they needed to do was have the ability to be a resource for the installers of their product on a global scale.

We brought in Boost and Yellow AI to present, and the customer ultimately went with Yellow AI for this. But what they wanted to do was, leverage the ability to ask questions via whether it was voice, and the voice can can talk to them in a hundred and sixty different languages, something like that. Right, Mike? Something like crazy like that.

But it’s it’s a hundred and fifty plus languages, that they can they can actually speak to the agent, the AI, or they can chat back and forth, same number of of languages as well. And it’s a repository of all the information of how to mount, the the proper products, where things go, question and answer. And now those three customer service people are being utilized where they needed to be utilized. Instead of installation support, they were being utilized now for actual customer service, shipping, all those types of things.

So the ROI was there immediately. It was not a huge uplift for the company to be able to leverage that product set. It integrated in. They had a dataset that was fairly clean.

Yellow’s team came in and and helped clean it up a little bit more and and went to market in a short period of time. It was less than ninety days. So, again, just wanted to address that so that there is ROI there. And, again, we’re looking for small wins. This is not something where you’re looking to implement AI to replace people. It’s a tool to supplement their work, make them more productive. It’s not a replacement for people a lot of times.

Expanding AI Capabilities Across Industries

Yeah. And I’m gonna I’m gonna do something I’m very, much not in the practice of doing. I’m gonna expand on Mike’s answer here a little bit in chat. Somebody asked how many AI, companies we had access to in our portfolio currently. When you look and you span across it, companies that are selling an AI based product, right, specifically that’s that’s AI capable or that is targeted as an AI solution, you have north of fifty.

You start to get into the CX conversation and that bridge that’s being built by some of these AI conversations into the in the cloud and cybersecurity, etcetera. And you get into even, like, the IoT stuff, what they are doing with the cameras and all of those AI type of, environments, you start to expand a pretty large ecosystem and conversation here. Within particular, the cloud space, you got about twelve to fifteen, right, that are doing what I think Mike was answering. And I just wanted to give a little clarity there around the data cleansing and data readiness and, like, in, there was a third stage of AI that we’re seeing some wins in. And this is where the cool stories come. Right? So we have the the stage one kind of approach, if you wanna call it that, with liminal and expedient that AI awareness will get you in a secure environment, let let you start taking advantage of some of these features and functionalities from these large LLMs like Chat GPT, Gemini, etcetera.

Stages of AI Implementation

Great. Cool. That gives me if I’m sitting there as an organization, I can now you know, Mike and Chad go, I have an AI answer all of a sudden, and I have some employees, and I can get my organization off my back a little bit.

Stage two, guys, if you think about it in these in these these terms, stage two, that’s where you go back and you go, alright. I got my Band Aid. Right? I got this really great product from, you know, one of the resources we previously mentioned, and it it’s doing great, and we can build on top of that.

It gives me a little time to get my data cleaned up. I can now go through and get my data, you know, my data aligned either figuring out what all areas I wanna include in these AI projects, start to put those into place, etcetera. And then stage three is once I have my data cleaned up and I have this other piece, I can go through and go, man, are there any AI centric, like, app dev type of projects that I need to put into place that can really drive some additional ROI? And this is where you start to see some eyes light up and things start to kinda change pace.

Case Study: The Lobster Pricing Project

I’m gonna steal an example from RapidScale. RapidScale did a deal, late last year, and it’s it’s been highlighted on the calls before, but I’ll it it was such an interesting opportunity. I’ll highlight it again in chat. I I believe you have some working knowledge of this one too.

It’s the lobster story. Yep. The client was wanting to you know, keep me honest here. They wanted to set the price of lobster and and better be able to forecast it based off of trends and and everything that they had seen for years.

But remind me again, and I know the answer, but we’re doing this for dramatic effect. Where was that data held for that client?

That data was in three ring binders sitting on shelves and stacked in boxes inside their, inside their warehouse.

So, not a data lake.

Nope.

Not a data warehouse.

Just an actual warehouse. Yep. With paper. So we saw Rapiscale come in, build out a road map, take the data, get it in alignment to be able to utilize it, and then build some custom app, or some custom dev to the AI and put that in place on top of what the datasets that they had cleaned up and created this environment for that organization that can now help set the price of lobster and help them forecast and all of the things that they were looking to do. I miss anything on that story?

Digitization and Data Readiness

No. Well, I think yeah. Just, you know, some some more specific details on it besides the the paper aspect of things and building that out. I do like to highlight that all of that aspect, including the digitization of the paper and and everything came through Telarus. So it was not rapid scale that did that, but we had a BPO, that’s in our portfolio that that focuses on digitization and and database development. So they were able to do that and and digitize all that paperwork, put it into a database that was clean.

They they had all the data readiness as a part of that project, and then and then RapidScale stepped in and built the LLM in and around that and added in the feeds, that were necessary that that lobster company subscribed to for weather in the North Atlantic, you know, fuel prices in and around Canada and and the northeast of of, the United States, all those things that impact the cost per pound of that lobster that goes into it so they can have an accurate price real time whenever those lobster boats pull up at their docks. It was pretty cool.

Transitioning to New Supplier Opportunities

We’re getting the we’re getting the, the hook, from Doug here to get ready for a really great, supplier in in Zoom coming on. But I’m gonna I’m gonna give a little lead in to Dustin. Right? Dustin, give me two seconds.

This’ll this’ll end up being good for all of us. I promise. Mike, the other major thing we’re just having right now is we’re seeing a decline in opportunities around these big two, three, four megawatt style deals. Right?

Yeah. And we see this pressure with tariffs in a lot of the supply chain, and that’s opening up some additional conversations around companies that do bare metal and some other infrastructure hosting like what Enzu does. We’re seeing a pretty big uptick in that. Anything you wanna kinda tee up real quick, and then we’ll toss it over to Doug and and Dustin here.

Hey. I’m not seeing the door closed overnight, but those large opportunity for power have basically gone down ninety percent. And that’s because these clients are now looking at preestablished infrastructure that they can commit fully dedicated to their workloads. So they now realize they don’t necessarily need to take down five megawatts of power, huge commitment, by the way, and lots of infrastructure to go with that. They’re moving that off into, fixed dedicated infrastructure that can host for for their workload specifically.

Cost Efficiency in Dedicated Servers

And, you know, speaking of of Dustin, he has gone through and created some crazy looking dedicated servers for us. Very large million dollar CapEx in some instances, but this far outweighs the cost of what it would take to do this on their own for these other, you know, two, three, five, ten, twenty megawatt deals.

So I I I wish they would come back because now all of these data centers have been building out to support this, and it’s available, soon to be available. But, you know, when we have that ability to sell value with our services, you can do it this way if that’s the way you’d like to do it. But let me introduce you to Enzu who who can do it a little bit differently, and maybe this is gonna be a better value to you. So, therefore, opens the discussion.

Urgency in Data Center Conversations

Well, we’ll hand it over to you guys with that. I will say one thing to put a quick bow on that for the for the advisors.

The enterprise customers, the mid market enterprise customers do have a sense of urgency like they never have before in the data center space. So continue to have that conversation because all of that capacity was taken. It triggered this effect of like, hey. We need to go do this now.

There’s that bubble hasn’t hit yet, and there’s still a lot of big opportunities there, but more in the traditional size data center opportunity. So, keep having those conversations. And, again, we’ll hand it over to Doug and Dustin to take it away from here. Thank you, guys.