Antonio Bernardo, Dean and Professor of Finance, UCLA Anderson School of Management

Whether and When to Invest in Telescent Technology 

This question of whether to deploy automation can be broken down into two decision points: whether to invest and when to invest in the Telescent technology. 

  • Decision 1: Whether to invest 

    • Cost savings are extremely compelling; not hypothetical – cost savings have been achieved with other clients. 

      • 10x ROI for unmanned data centers 

      • 30% upfront network CapEx savings, 41% network energy savings for hyperscale data centers 

    • Cash flow benefits are large relative to CapEx – will allow Data Center Operator to maintain considerable financial flexibility. 

    • Data center operators will be at a competitive disadvantage if they do not invest in disruptive technologies used by competing firms 

    • Decision to invest is clear and incontrovertible. 

  • Decision 2: When to invest 

    • Why do it now? 

      • Achieve cost savings as soon as possible. 

      • Improve energy efficiency of data center as soon as possible 

      • Avoid continuing/compounding mistakes inherent in manual patch-panel  deployments (incorrect records, incorrect billing, service interruption)

      • Past expense of current manual patch panel technology is irrelevant; these are sunk costs which should not deter the data center operator from investing in new value-creating technology. 

    • Why wait? 

      • Switching to Telescent technology can disrupt service to data center operator’s customers. 

        • Telescent solution is drop-in replacement for manual patch-panels; it is relatively simple to switch from manual to automated. 

        • This is not a good reason to wait because these disruption costs can be minimized. 

      • Concern that rapid transition exposes the customer to considerable systemic risk if the technology doesn’t work. 

        • Experience with other data center operators that have deployed technology indicates that this risk is minimal. 

      • Concern that Telescent won’t be around in the future. Customers want to be assured company will be around to service equipment, provide upgrades, etc. 

        • Telescent can reassure data center operators with its strong financial  backing, a growing client base, and strong future prospects. 

        • Flextronics Inc., a multinational contract manufacturer, handles reverse logistics such as spares, returns, repairs, etc. 

      • Telescent may not be able to ramp up quickly enough. 

        • Flextronics Inc. can increase production quickly. 

        • Telescent can scale required personnel through existing network equipment installers and it can train the client for self-installation. 

        • System is maintenance-free and highly reliable so only minimal service infrastructure is required. 

Telescent interconnect automation systems already exceed 1 billion interconnect hours in operation across the globe so the deployment risk is small. For operators of data centers, we believe it is advisable to begin the rollout right away to achieve cost savings and improve service delivery as rapidly as possible. The modular and scalable nature of the Telescent solution ensures that the rollout can be flexible and incremental for additional risk mitigation, enabling data center operators to accelerate/decelerate the deployment as they gain experience with the transition process and costs. 


Antonio Bernardo Biography 

During his 25 years at UCLA Anderson, Dean Antonio “Tony” Bernardo estimates he’s taught more than 5,000 students. Bernardo says some of the best moments are when students walk into his office to dig deeper into a business issue — to learn beyond the classroom material. “Everyone on the faculty I know loves meeting with a hard-working, motivated student,” he says. 

In 2019, Bernardo was appointed UCLA Anderson’s ninth dean, effective July 1. 

Bernardo’s research spans various areas of corporate finance. His recent research on bailouts provided a set of policy recommendations to lawmakers looking to design bailouts for distressed firms. His current research looks at optimal capital structures, or how much debt and equity financing a firm should have. It suggests that capital structure decisions are determined, in part, by the debt choices other firms in the industry are making.

Another area Bernardo is exploring involves optimal compensation of doctors, and designing compensation systems for health providers. “I tend to work on topics that are very diverse,” Bernardo says. “I learn a lot that way.” 

In addition to having an impressive list of published papers and working papers, as well as receiving numerous teaching awards, Bernardo serves as associate editor of the Critical Finance Review and Financial Management. 

Education 

Ph.D. Economics, 1994, Stanford University 

B.A. Economics, 1989, University of Western Ontario