New CEO Laurent Allard has joined OVH to give the leading French and international service provider a more aggressive business focus and achieve a quadrupling of revenue over the next five years. Allard praised OVH founder Octave Klaba as a “visionary, technical person” and said that as Chief Technology Officer, Klaba will continue to play a key role in the company, which has 16 data centers in Europe and one in Quebec. “I understand the technology and the market and how to use these assets for new types of services and deployments for enterprises. I’ve been doing global transformation all my life,” says Allard.
Allard joins OVH from CGI, where he was CTO since 2012. CGI (GIB) is a $10 billion company, the world’s fifth largest IT consultant, headquartered in Canada with operations in 40 countries. Before CGI, Allard was a co-founder of AXA Tech, which managed the IT operations for large French banking and insurance group AXA. Allard points out that CGI is a public company yet still controlled by the Godin family of Canada. OVH plans on taking in some 268 million euros of bank finance to support its current 400M euro investment plan (the balance will be generated by operations), and in the longer term the company will seek a stock market listing, but the Klaba family intends to remain in control.
French press reports of OVH 2014 revenue of some 230M-240M euros ($260M-$271M) are, says Allard, “the right order of magnitude.” The goal in the current OVH five-year plan is to get that figure to one billion euros ($1.13B) by 2020. He sees the main drivers for that growth as, first, the growth of the “digital economy” at a rate of some 30% a year. Secondly, the company will grow through a more aggressive focus on the enterprise market. With its large base of servers and a full technology stack, OVH already has the technical resources for enterprise customers. “We have a professional services organization, we have the servers, virtual partitions, and cloud solutions,” he says. “We already have banks, transport companies, and other enterprises discovering that we have the technology, we are cheaper than Amazon or Microsoft, and we are located next to them.”
He cites two main competitive advantages OVH has in the enterprise market. The first is price. “Once you have satisfied the customer that you have the capabilities he is looking for, price is very important and for cloud IaaS and PaaS if you compare apples to apples, including network access, we are consistently 30% cheaper than Amazon (AMZN) or Microsoft (MSFT).”
The second competitive advantage OVH has in Europe is that it’s a European company and not required to abide by U.S. law. It’s thus able to appeal to customers that want to avoid U.S. spy agencies, widely believed to have access to data inside data centers owned by U.S. companies. Apple (AAPL) recently announced plans to build data centers in Denmark and Ireland, in part to meet European customers’ desire to keep their data outside U.S. borders. According to Allard, U.S. cloud companies tell their customers that data kept in Europe-based data centers will not be provided to U.S. authorities even when requested, but customers don’t necessarily believe them. “We are in Europe, and we comply with French and EU law,” says Allard, telegraphing a clear message to customers who are concerned about U.S. spying and data theft.
Last October, OVH told the Daily Cloud that it’s looking for a data center on the U.S. west coast. Allard says that project continues but the company has nothing to announce yet. Our speculation is that there is a strong possibility this data center will turn out to be in Canada, so OVH can continue to market itself as one of the few international cloud providers that is relatively free from the reach of the U.S. government. Allard adds that while the U.S. is a significant focus for OVH, most of the growth in the five-year plan will come from Europe. “France and Europe have huge potential,” he says. “The maturity of these markets is very low.”
As an example, he cites a large deal that involves some 30,000 to 50,000 servers that OVH is currently discussing with a large bank. The competitors for this deal are Amazon Web Services and Microsoft Azure—along with OVH among the few service providers who can offer the 24/7 international support this customer desires. OVH’s advantages include its high-speed connectivity via an OVH private network to 26 countries, and its technology stack. “We have a process to provide a competitive advantage to his bank,” Allard says. This deal, he adds, is just one example of the sort of sales pipeline that exists today as European enterprises begin to explore the potential of outsourced cloud solutions. “The interest level from the public sector and the commercial sector in moving from private data centers to the cloud is very high. We have the capacity in just one data center to host 300,000 physical servers, and we have been working on this technology for many years. We’ve done the work and we’re ready to take it to the next level.”
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