IT Consulting is Not Having a Good Time
6/18/202621 min
Data centers might have a climate problem. With more than 80% of data centers worldwide in regions at high risk of drought, flooding, or wildfires. The implication of these trillions in investment being at elevated risk to weather related disasters could have some major downstream issues. Pluis, a dive into Accenture’s earnings and the challenges facing the IT consulting industry.
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Companies discussed: META, TSMC, SPCX, TSLA, BMI, ITRI, VRT, ACN, EXLS, GLOB, IBM
Host: Tyler Crowe
Guests: Matt Frankel, Jon Quastl
Engineer: Bart Shannon
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Clips
Transcript preview
First 90 secondsTyler Crowe· Host0:00
[upbeat music] The SaaS apocalypse was the wrong apocalypse today on Motley Fool Hidden Gems Investing. [upbeat music] Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors Matt Frankel and John Quast. So we're gonna get into the kind of decline, I guess if you will, of the IT services consulting industry over the past couple years based on Accenture's earnings that were released earlier today, and we're also gonna do something a little bit different. It's a special message from The Motley Fool at the end here. But we're gonna start today with a recent report on how climate could be a much bigger factor for data centers than originally thought. Now, Matt, you originally brought this idea to the table with us. So what was the market missing about da- data centers that this report was bringing out?
Matt Frankel· Guest0:55
Yeah. So it was a study by First Street that was released today. It analyzed 97 different data center markets around the world. So th- the headline is that nearly 90% of our global data center capacity today, not what's being built, is at an elevated risk from climate related hazards. Think flooding, think wind storms, wildfires. So most underwriting when you're buying insurance for real estate, it still uses historical data, uh, which isn't doing a good job of predicting how climate events perform today. I know John lives in Florida. This is why a lot of insurers have exited Florida because the past looking data isn't doing a good job.