East Energy + TGC Data Global Partnership

Data Center Market Competitive Landscape

The Southeast data center market is dominated by national REITs and hyperscalers, creating opportunity for regional providers with local expertise, competitive pricing, and specialized services. East Energy + TGC's partnership leverages power cost advantages and renewable energy positioning.

Major Data Center Competitors

Company	Type	Market Cap/Value	Facilities	Threat Level
Digital Realty Trust (DLR)	Global Data Center REIT	$74B	290+ global facilities	High
Equinix (EQIX)	Interconnection & Colocation Leader	$75B	240+ IBX centers	High
QTS Realty (Acquired by Blackstone)	Hyperscale Data Centers	Private ($10B+ valuation)	28+ data centers	Medium
CyrusOne (Acquired by KKR/GIP)	Enterprise & Hyperscale Colocation	Private ($15B acquisition)	50+ data centers	Medium
Iron Mountain Data Centers	Enterprise Colocation	$14B (data centers ~25%)	15+ data centers	Low

Detailed Competitor Analysis

Digital Realty Trust (DLR)

High Threat

Type: Global Data Center REIT

Coverage: Global (47 metros)

Strengths

• Scale & network effects
• PlatformDIGITAL ecosystem
• Strong hyperscaler relationships

Weaknesses

• High pricing
• Limited regional focus
• Complex sales process

Equinix (EQIX)

High Threat

Type: Interconnection & Colocation Leader

Coverage: Global (70+ metros)

Strengths

• Interconnection ecosystem
• Premium locations
• Enterprise focus

Weaknesses

• Expensive pricing
• Limited hyperscale capacity
• Complex platform

QTS Realty (Acquired by Blackstone)

Medium Threat

Type: Hyperscale Data Centers

Coverage: US markets

Strengths

• Hyperscale focus
• Efficient operations
• Strong margins

Weaknesses

• Limited SME/enterprise
• Geographic concentration
• Acquired - strategy uncertain

CyrusOne (Acquired by KKR/GIP)

Medium Threat

Type: Enterprise & Hyperscale Colocation

Coverage: US & International

Strengths

• Enterprise relationships
• Hyperscale capabilities
• Operational efficiency

Weaknesses

• Private ownership changes
• Limited Southeast presence
• Integration risks

Southeast Regional Competitors

DataBank

High Threat

Locations: Charlotte, Raleigh, Atlanta

Focus: Regional enterprise colocation

Capacity: 8 Southeast facilities

Position: Regional enterprise provider

Flexential

Medium Threat

Locations: Charlotte, Atlanta

Focus: Hybrid IT solutions

Capacity: 40+ US facilities

Position: Hybrid cloud & colocation

EdgeConneX

Low Threat

Locations: Regional edge locations

Focus: Edge data centers

Capacity: 40+ edge facilities

Position: Edge computing specialist

Hyperscaler Competitive Dynamics

AWS

Current Regions:

us-east-1 (N. Virginia)

Proximity to NC:

~250 miles from NC sites

Strategy:

Owns infrastructure, rarely leases

Opportunity:

Disaster recovery, hybrid cloud

Partnership Potential:

Possible - AWS Outposts partner

Microsoft Azure

Current Regions:

East US (Virginia)

Proximity to NC:

~200 miles from NC sites

Strategy:

Expanding regional presence

Opportunity:

Edge computing, Azure Stack

Partnership Potential:

High potential - partner program

Google Cloud

Current Regions:

us-east4 (N. Virginia)

Proximity to NC:

~300 miles from NC sites

Strategy:

Selective regional expansion

Opportunity:

TGC existing partnership

Partnership Potential:

Existing relationship

🛡️ Competitive Moats & Defensibility Framework

⚠️ PE/VC Critical Question: "Why Can't Digital Realty Crush You?"

Institutional investors need to see sustainable competitive advantages beyond cost arbitrage. The following framework demonstrates structural barriers that prevent replication by larger competitors.

🔗 Network Effects & Customer Lock-in

MSP Service Integration Moat

Once customers adopt our 3-tier MSP model, switching costs become prohibitive:

• $500K-$2M integration costs to replicate custom configurations
• 12-18 month implementation timeline for enterprise tier services
• Proprietary monitoring APIs and data analytics platforms
• Cross-platform dependencies across colocation + managed services

Regional Ecosystem Network

Interconnected customer base creates network value:

• Agricultural technology integration (T1 Farmville ecosystem)
• Healthcare and government connectivity (T2 Wilson hub)
• Local peering and data exchange agreements
• Shared disaster recovery and backup services

⚖️ Regulatory & Legal Barriers

Utility Partnership Exclusivity

East Energy's utility relationships create barriers:

• 20-year exclusive renewable energy pricing agreements
• Priority interconnection rights at optimal grid nodes
• Grandfathered transmission capacity allocations
• Joint venture economics with East Energy parent company

Zoning & Development Rights

Site control advantages with regulatory approvals:

• Pre-approved zoning for high-power industrial use
• Environmental impact studies completed (2-3 year head start)
• Local government tax incentive agreements locked-in
• FAA clearance for tower construction (limited available sites)

🔬 Technology & Intellectual Property

TGC Proprietary Technology Stack

Leveraging TGC's proven hyperscaler technology:

• Proprietary cooling optimization algorithms (patent pending)
• Real-time power management and load balancing systems
• Automated facility management and predictive maintenance
• Custom hyperscaler integration APIs and orchestration tools

Renewable Energy Integration IP

East Energy's renewable integration technology:

• Smart grid integration and demand response algorithms
• Battery storage optimization for peak shaving
• Carbon tracking and ESG reporting automation
• Renewable energy certificate (REC) trading platform

💰 Capital & Scale Barriers

First-Mover Time Advantages

Market timing creates sustainable advantages:

• 24-36 month construction timeline advantage over new entrants
• Customer acquisition during competitor construction delays
• Talent acquisition in limited Southeast data center market
• Supply chain relationships and vendor exclusivity agreements

Economic Moats from Partnership Structure

Unique economics difficult to replicate:

• East Energy power cost advantages ($0.08 vs $0.12/kWh market)
• TGC operational expertise reduces development risk
• Combined entity credit rating improves debt financing terms
• Shared infrastructure reduces per-MW development costs

🎯 Competitive Response & Counter-Strategy Matrix

Competitive Threat	Probability	Timeline	Our Defensive Response	Moat Strength
Digital Realty Southeast Expansion	Medium	2-3 years	Customer lock-in via MSP integration, exclusive utility partnerships	Strong
Equinix Acquisition of Regional Player	High	12-18 months	Network effects from interconnected customer base, regulatory barriers	Medium
Hyperscaler Direct Investment (AWS/Azure)	Medium	3-5 years	Partnership not competition, focus on hybrid/edge services	Strong
New Utility-Backed Data Center	Medium	2-4 years	East Energy exclusive agreements, first-mover customer relationships	Strong
Technology Disruption (Edge Computing)	High	1-2 years	T3 La Grange edge site positioning, SME technology adaptation	Medium

🏰 Competitive Moat Validation Framework

🔗

Customer Switching Costs

$500K-$2M

Enterprise MSP migration cost

⚡

Power Cost Advantage

33%

Structural cost advantage

⏱️

First-Mover Advantage

24-36

Months ahead of competitors

🎯

Market Entry Barriers

$200M+

Capital required to compete

🛡️ Moat Durability Assessment

Strong Moats (5+ years)

• East Energy utility partnerships
• MSP customer integration lock-in
• Regulatory/zoning advantages
• TGC technology IP portfolio

Medium Moats (2-3 years)

• First-mover customer relationships
• Regional network effects
• Supply chain advantages
• Talent acquisition lead

Vulnerable Areas

• Technology disruption (edge)
• Hyperscaler direct competition
• Acquisition by larger players
• Power cost arbitrage erosion

🤝 Hyperscaler Partnership Reality Check

🚨 PE/VC Skepticism: "Why Won't AWS Just Build Their Own?"

Institutional investors consistently question hyperscaler partnership assumptions. The following analysis demonstrates why hyperscalers prefer strategic partnerships for regional/edge infrastructure over direct ownership.

🔗 TGC's Proven Hyperscaler Track Record

Google Cloud Partnership

Existing Strategic Alliance

Contract Value: $45M over 3 years (2022-2025)

Services: Hybrid cloud infrastructure, edge computing

Scope: 12 facilities across 8 markets

Performance: 99.97% uptime, 15% cost reduction vs direct GCP

Renewal Status: Extension negotiations ongoing for 2025-2030

Validation: Google's continued partnership demonstrates hyperscaler preference for third-party infrastructure in secondary markets.

Microsoft Azure Stack

Partner Program Tier 1

Partnership Level: Azure Stack HCI Premier Partner

Certification: Azure Arc-enabled infrastructure

Pipeline Value: $28M identified opportunities

Focus Areas: Hybrid cloud, disaster recovery, edge computing

Support Level: Direct Microsoft engineering support

Opportunity: Microsoft's edge strategy requires regional partners for Azure Stack deployment in secondary markets.

AWS Outposts Pipeline

Partner Development Track

Status: AWS Partner Network (APN) Advanced Tier

Outposts Capability: Deployment and management certified

Target Opportunities: $35M over 24 months

Focus Sectors: Financial services, healthcare compliance

AWS Support: Dedicated solutions architect assigned

Strategic Value: AWS Outposts require local infrastructure partners for enterprise hybrid cloud deployments.

💰 Economic Logic: Why Hyperscalers Prefer Partnerships

❌ Hyperscaler Direct Build Challenges

Capital Intensity vs ROI

$200M+ investment for 43MW capacity in secondary markets with uncertain demand

Regulatory & Permitting Risk

24-36 month timeline for environmental studies, zoning approvals, utility interconnection

Local Market Knowledge Gap

Limited understanding of Southeast enterprise customer relationships and requirements

Operational Complexity

Managing 50+ small regional facilities vs 10-15 hyperscale campuses

✅ Partnership Model Advantages

Asset-Light Expansion

Rapid market entry with zero CapEx, revenue sharing vs full ownership risk

Risk Transfer

Partner assumes development, regulatory, and operational risks while hyperscaler captures revenue

Local Expertise Access

Immediate access to regional relationships, regulatory knowledge, and customer base

Core Focus Maintenance

Continue investing in innovation vs infrastructure management in secondary markets

📊 Partnership Economics & Revenue Sharing Models

Partnership Model	Hyperscaler Revenue Share	TGC Revenue Share	Investment Required	Risk Profile
AWS Outposts Hosting	65-70%	30-35%	$0 (AWS equipment)	Low
Azure Stack HCI	55-65%	35-45%	$2-5M (infrastructure)	Medium
Google Cloud VMware Engine	60-70%	30-40%	$3-8M (VMware licensing)	Medium
Hybrid Cloud Services (All)	40-50%	50-60%	$10-15M (custom build)	Low

$155M

5-Year Partnership Pipeline

Projected value across all hyperscalers

$35.6M

TGC Revenue Share

23% blended share across partnerships

$0-15M

Partnership Investment

vs $200M+ direct build cost

🚀 Partnership Development Pipeline

Google Cloud - Contract Extension

2025-2030 renewal negotiations ongoing

$75M

Projected value

Microsoft Azure Stack - Expansion

Southeast regional deployment program

$45M

24-month pipeline

AWS Outposts - New Partnership

Financial services focus initiative

$35M

Under negotiation

East Energy + TGC Partnership: Unmatched Competitive Advantages

About East Energy Renewables

East Energy Renewables is a proven biomass and waste-to-energy company with operational infrastructure at all three datacenter sites, bringing unprecedented cost advantages and operational synergies.

T1 Farmville

15MW biomass plant operational since 2019, processing 200 tons/day agricultural waste

T2 Wilson

25MW biomass plant operational Q4 2024, 280 tons/day capacity

T3 La Grange

25MW biomass plant operational Q4 2024, 280 tons/day capacity

🏆 INFRASTRUCTURE OWNERSHIP ADVANTAGES

Zero Land Acquisition Costs

East Energy owns all three sites with existing infrastructure

Competitor cost: $12-18M per site

Existing Power Generation

Operational biomass plants: 15MW + 25MW + 25MW capacity

Competitor cost: $25-35M per site

Water Rights & Infrastructure

Owned water rights and distribution systems

Competitor cost: $8-12M per site

Experienced Operations Team

East Energy Operations: decades of experience, 18-20 technicians per site

Competitor cost: $5-8M new team

💰 REVENUE DIVERSIFICATION MODEL

Datacenter Colocation

Primary revenue: $388M by Year 5

65-75% margins with cost advantages

Biomass Power Sales to Grid

Stable revenue: $15M annually from waste-to-energy

25-35% margins, net energy positive

Carbon Credits & RNG Development

Growing revenue: $2M → $8M by Year 5

70-80% margins, expanding program

Solar Leasing & Thermal Energy

Additional revenue: $5M annually

Co-located industrial customers

Traditional Datacenter

$73M

Infrastructure CAPEX per site

+ $3.2M annual energy costs

East Energy + TGC

$8M

Infrastructure integration cost

Net revenue from energy sales

Competitive Advantage

89%

CAPEX reduction per site

+60-80% ROI enhancement

🎯 COMPETITIVE POSITIONING VS MARKET

vs. National REITs (Digital Realty, Equinix)

• 89% lower infrastructure costs enable 40-50% price advantage
• Regional focus with existing renewable energy operations
• Multiple revenue streams vs single colocation dependency
• Net-positive energy costs vs $3.2M annual expense

vs. Regional Providers & Hyperscalers

• TGC's proven hyperscaler partnerships (Google, Microsoft)
• East Energy's operational expertise across renewable energy
• Unique waste-to-energy model creates sustainability advantage
• Partner model for hyperscalers vs direct competition

🛡️ Competitive Threats & Response Strategies

High Threat: Digital Realty & Equinix

• Response: Focus on underserved enterprise segment
• Strategy: Superior customer service + competitive pricing
• Timing: Enter before they expand Southeast presence

Medium Threat: Regional Providers

• Response: Scale advantages + hyperscaler partnerships
• Strategy: Superior technology + operational efficiency
• Differentiation: Renewable energy + TGC expertise

Partnership Opportunities

• Hyperscalers: Edge computing, disaster recovery, hybrid cloud
• Regional ISPs: Connectivity partnerships, edge deployment
• Enterprise: Private cloud, compliance solutions