Industry Spotlight: Duos Edge AI President Doug Recker

The vision of the micro data center empowering an underserved market was everywhere for a while. Now that the conversation has moved on to AI, I’ve seen some ask if the edge is ‘dead’. But it’s all part of the same infrastructure discussion, because in the end the beneficiaries of AI will be at the edge and the infrastructure will have to be there. With us today to take another look at the next generation of edge data centers is Doug Recker, President of Duos Edge AI.  Doug previously founded and led EdgePresence before it was sold to Ubiquity in 2023, and has clearly wasted no time getting back into the saddle.

TR: What are the origins of Duos Edge AI?

DR: Duos Technologies is a public entity based here in Jacksonville, and they were a customer of Colo5 which I had founded and led. They’re in the rail technology business, and they also use AI. They also deploy little mini shelters along the rail where they do all that compute. My previous investors were still covered by their non-compete, so I thought it would be interesting to go to Duos Technologies and have them start a subsidiary targeting the Edge that leverages their space, fiber, and boots on the ground along the rails. So I pitched the idea to them and now Region 16 is the first customer. By the end of October, our first pod will be live. It’s about 55 feet long and 13 feet wide, with 15 cabinets inside and up to 350kW power. It’s not a high density AI pod by any means, but that’s not what they need.

TR: What has changed in your approach to the opportunity at the edge?

DR: With EdgePresence, we were going everywhere, but what I learned is that it is the Tier 3 and 4 markets that are in desperate need of bandwidth. I saw the rural broadband initiatives and E-Rate deals, so I went out and checked out some of these remote schools. The bandwidth was just terrible. In this new venture, I’m focusing on education and healthcare in those markets. We are focusing just on Texas for this year and 2025. We signed our first client, Region 16, which basically is 50+ schools. Up to now each school has had extremely expensive point-to-point connections back to Dallas, which is a 5-6 hour drive. Basically, we drop our mini data center — 15 cabinets and 300kW – at what they call the service center, which is where all the schools feed back to. It’s almost like a managed service division of the public school system for that group of schools. The farthest point is probably 6 to 12 miles from the node. Then I have a point-to-point dark fiber connection into Dallas, bringing their connectivity down to milliseconds. And my data center pods are all N+1 redundant just like a major data center. Amarillo, TX doesn’t justify a $30M data center, but if you drop a $1M data center, you can service the hospital, the schools, and some enterprises. It makes complete sense.

TR: Will you be limiting yourselves to sites adjacent to railroads, or is the opportunity more general?

DR: While railroads are one of vertical for Duos, our reach is broader—we’re focused on being where our customers need us. Texas, for example, organizes its schools into 20 regional service centers, and Region 16 has become our pilot program. With a dedicated edge data center here, we can support not only schools but also healthcare facilities, county offices, and critical services like 911. Our goal is to replicate this model across all Texas school district regions, extending high-speed connectivity to over 1,200 districts statewide.

 

TR: Why Amarillo and Region 16?

DR: It had been just AT&T in that market, and when AT&T went down, the market went down. With the rural broadband initiative and E-Rate, FiberLight built fiber out to the schools for Region 16. So now, in our pod we have AT&T, a couple of local metro carriers, and FiberLight. That means we have a mini peering point and redundancy. The hospitals can come in and ride multiple waves out to their hubs. The schools don’t have generator backup — their IT rooms are in closets — so all of this will come back to the service center. Then the car dealerships and other enterprises can now colocate too. You have actual competition. 

TR: Where are the pods being built?

DR: It’s the same model that I designed about 6-7 years ago with EdgePresence. They are made in Denver, Colorado, and the company has two other sites that they can manufacture them at. I could produce probably 30 a month if I needed to. But realistically, my goal in the near term would be five a month, because they’re not easy to install. Some people think they’re just like mobile homes that you can just drop and plug in. There is a lot of work to do it right, and then the carriers have to build fiber to it.

TR: Scaling operations has always been the question with edge infrastructure. How are you approaching the problem?

DR: We are taking a slower approach and we’re going to do the installation right from the beginning. In Amarillo, we have one contractor there that handles the HVAC, electrical, and UPS systems, and we have a 4-hour SLA. We will have national maintenance contracts as we grow, but right now we’ll do that in each market. I like outsourcing it, because if you bring it in then you have the cost of trucks and the people. There is a small reservation fee, but I’m not paying an employee 24/7. I only pay when something breaks. And my history with these boxes is they’re actually pretty rugged.

TR: What maintenance issues do you have to keep on top of?

DR: The main thing that you’ll see is changing air filters on the AC units, and cleaning the area around the pod of weeds and things like that. The generators run every Thursday, and we test them fully every three months. We build these pods to be remote. If you just build a pod with cheap components, it’s not going to work. I learned that lesson on the first pod that I had. Then I didn’t think about bug treatment, and I had a spider get in my fire protection gas system and it set the alarm off and sprayed gas everywhere. Now, we put things in place so that can’t happen. And then there was dust. It’s not like walking into a brick and mortar where you have three or four doors before you even get to the actual data center. Here, you open the door and you’re in the elements. So we have a patent pending on a product that basically goes on the outside of the door, which we call a clean room that blows air around you and cycles it. Then you walk into the mantrap, and then still there’s two other doors you access the data center with. Just that small little 8×5 room makes a huge difference. Just things like that I’ve learned over the years have helped us.

TR: How does the rise of AI fit into your business plans?

DR: With enterprise customers, when I drop a pod for, say, Region 16, it’s not just for the school district. That only takes up about 30%. For example, in these rural areas there is a lot of cattle and farming, and they’re all going to AI. Two farmers that are going to be customers told me that their managed services company is deploying drones. The drones go up every day and look at the cattle, and they can tell if any need to put on weight, or are too heavy, or if there’s disease or another issue. All the information that is collected by drones needs to be stored and sent back to the managed services company who’s actually in Arkansas or another location. Instead of sending big chunks of data all the way back, they’ll send it back to our pod where their AI model will go through it and send back the important bits. 

TR: What other verticals do you see opportunity in?

DR: It’s Texas, so there’s the oil and gas sector. I have learned that fracking produces a lot of data that they would like to keep centrally. And there are a lot of those oil fields in the western Texas Panhandle. Another is hospitals, their connectivity is terrible. There are a lot of medical professionals that commute from Houston to Amarillo, because they can’t get that talent to live in Amarillo because while the cost of living is great they don’t have connectivity. You literally cannot work from home if you live in Amarillo. This will help all that. It’ll bring industry, it’ll bring jobs out there. My little box isn’t going to change the world, but it’ll start the nucleus of other people who will start building more infrastructure.

TR: If that trend grows, will you need to support higher densities?

DR: These systems that they’re using aren’t high compute yet. But eventually, if it does go to that. I can maybe retrofit to liquid cooling. Or I can just drop another pod right next to it and put conduit over to the first pod for a cross-connect. I can add more cabinets in a second pod too, because all the switchgear, UPS, and everything is in the main pod.

But starting out with 15 cabinets in these regions makes sense. Because we can always drop more, but it would kill us if we put in 30 and can only fill 15. I just need to make money off of 15 cabinets. That’s why the cost of the pod, the placement of the pod, and the rent for that placement, are all critical to make this model work.

TR: At what point do you break even on a pod deployment and then how many pods will show real traction?

DR: Basically, if I have 9 cabinets out of the 15, the business model is good. The school will take about 5-6, and each carrier has to take 2 because their fiber comes in each side of the pod for redundancy. Then it’s about how many pods. 10 pods won’t attract investors, but 50+ is a real business with real cash flow to scale.

TR: When might you be ready to look beyond Texas?

DR: I think Texas is going to be our focus through 2025. But if things accelerate, I might go back and look to bring on more capital to target Illinois or maybe the Carolinas. Texas isn’t the only place where this will work. There are tons out there.

TR: So how should we think about Duos Edge AI going forward?

DR: At a conference recently, the panel before my own panel was “The Edge is dead.” I guess no one told me I’m dead, but I’m still here. I’m on the Edge, but I’m in Data Centers. Call it whatever you want,  small data centers in communities that need access points. Our mission is to bring better connectivity to the regions that don’t have it, so the kids in those schools can have the same experience as a kid in Dallas or Atlanta. Because right now they don’t, and it’s sad. There’s no reason why they shouldn’t have the same connectivity, and we can allow that to happen.

TR: Thank you for talking to Telecom Ramblings!

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Categories: Datacenter · Industry Spotlight