For some, digital infrastructure means data centers, cell towers and optical fiber networks. For others the category includes software, computing hardware and devices, artificial intelligence and other information technology. For investors, operating companies, asset owners and many others in the category, the definitions matter.
For investors, it changes the classes of assets that are investable. For operators the definitions shape business strategies. For asset owners, broader definitions change the scope of potential buyers. For everyone, the definitions can affect equity or asset values and multiples.
Likewise, broader or narrower definitions shape firm strategies for all others in the ecosystem: who “customers” are, how marketing and sales efforts are structured, what product development has to happen.
For most firms, a practical definition will be narrower. But it seems inevitable that with the emergence of artificial intelligence as a trend at an inflection point, that the category will see practical changes, with more asset types emerging as part of the digital infra marketplace.
Not to be ignored either is the amount of competition for the narrower class of assets, higher valuation multiples that put pressure on upside profits and the sheer emergence of new asset classes closely related to traditional digital infra. Also, existing asset classes could emerge in new form as part of digital infra markets.
Historically, “public” assets such as communication networks or data centers have been distinct from “private” assets such as computing hardware or operating systems; end user applications and software.
We should see a growing trend of greater inclusion of other asset classes beyond “public” infra.
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