Is OVH the cloud market’s best-kept secret? You need to know about this France-based firm with hyperscale ambitions

To many of us, the hyperscale market looks sewn up. AWS has taken the lion’s share of the market with Azure and Google Cloud fighting tooth and claw to build out their share (see Exhibit 1). CIO mindshare is absorbed with these three firms—even IBM, with a huge cloud capability, is pushed to the sidelines of the hyperscale conversation. Alibaba Cloud, which is chewing into APAC hyperscale revenues, barely gets a mention. So, it’s no surprise to find a potential competitor sitting in the shadows with a tantalizing value proposition that just might see the firm become a major thorn in the side of the entrenched hyperscalers. OVH – a France-based cloud firm with huge potential, is a classic example of why CIOs must look outside of the usual suspects to find innovation, fresh thinking, and unique value propositions.

Exhibit 1: AWS has the lion’s share of the hyperscale cloud market

 Source: HFS Research based on company financials and estimates where public data does not exist, 2019

When it comes to hyperscale cloud, CIOs have a simple choice—buy US, or buy Chinese. Or so they think.

Bubbling away in the background, fueled by an absence of viable choices, a major bugbear is building for CIOs and business leaders. They have a basic choice: buy US (Microsoft, AWS, or Google), or buy Chinese (Alibaba Cloud). Historically, this issue hasn’t caused a tremendous amount of fuss, as demonstrated by the rapid growth of the cloud giants. But as legislation and regulations creep in, global businesses are looking to the future of their cloud partners. Take US-based cloud firms as an example; the Cloud Act presents a foundation for future legislation around data sovereignty. The Chinese legal system presents an even clearer challenge—a perception of sovereignty that has halted Alibaba’s growth into regions outside of APAC.

This story and market concern around the sovereignty of data has played into the hands of smaller, independent European firms. At a recent summit, OVH shared the stage with Cédric O, Secretary of State for the Digital Sector in the French Government, who argued that the issue of data sovereignty has never weighed heavier on the minds of business leaders and government bodies.

To paraphrase his argument: Each time we abandon our own values, because the terms of use and conditions are based on American and Chinese values, our values are not the same—if we just use these technologies, we abandon our cultures. We must compete with these firms. We must be at the level of our technological competition.

For the executive team at OVH, helping clients with data sovereignty is a core part of its model. While it can deliver services in the US, those from other jurisdictions can leverage the firm’s segmented model for cloud services without falling prey to the Cloud Act or myriad other regulations. It’s likely that concerns around the sovereignty of data will only increase, particularly given the increased geopolitical tensions and intonations to clamp down on big tech—often regulating tech giants throws a wide net, which will undoubtedly capture some forms of hyperscale cloud in the process. As this theme develops, it’s the smaller cloud firms that may be ripe for enterprises to leverage.

Despite considerable scale and capability, OVH’s humble strategy has kept it off the radar

When discussing the issue with enterprise leaders, it quickly becomes a conversation around balance. Their businesses need cloud capability at scale and, they argue, outside of the big four or five hyperscale firms, their options are limited. However, the reason OVH has slipped behind the radar is simply that the firm’s humble strategy and leadership teams haven’t been particularly bullish about touting their cloud capability.

But when looking for examples of scale, the evidence is plentiful. The firm has several thousand global clients and many who tout the firm’s ability to scale services rapidly. Take, for example, the work the firm is doing with the European Space Agency, which sees OVH process and host over 10 Pb of data per year, most of which is high definition photo and video files. The firm also hosts a significant portion of France’s total web traffic. A further example of scale is OVH’s ability to weather and deal with one of the largest DDoS attacks in history. Spending just a short time with OVH’s leadership team and clients leaves us with the genuine feeling that the firm is one of the best-kept secrets of the cloud market.

The firm may not have the glitz and marketing spend of the hyperscalers—and, realistically, it will play a very differentiated role compared to Google, AWS, Microsoft, and Alibaba—but to an extent, that’s its greatest opportunity. The firm has developed solutions where clients don’t need to stay up at night worrying about lock-in, which is something AWS clients don’t sleep as easily over. Package that with the firm’s data sovereignty selling point and the plethora of sustainability plaudits the firm leverages, and it’s the differences that make OVH stand out as a valuable player in the cloud market.

The Bottom Line: OVH may be the best-kept secret of the cloud market. CIOs would be wise to look beyond the usual suspects to find innovators like OVH making waves in the background.

The hardest part for OVH, and by extension, the firm’s clients, is scaling to rival the hyperscale firms while protecting the areas that make the firm special. It’s these areas of differentiation that have seen the firm create a class of its own in the ultra-competitive hyperscale market. For enterprise leaders and CIOs, the fact OVH has been such a well-kept secret for so long is a testament to the deafening toll of the hyperscale firms marketing budgets. To find best-in-breed partners, they must look beyond this and find the quiet innovators and disruptors.