OVH—The biggest cloud vendor no one has heard of

Who said cloud was a game with only a few players? Here's one you probably never heard about.

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At the OpenStack Summit in Austin recently, one of the companies invited to keynote on the first day was a cloud, hosting and services vendor from France, OVH. Like most of the people in the room, the name OVH raised my eyebrows. I've been covering the cloud world since it existed, and I'd never come across the company. Maybe they were a new startup or something?

It turns out that, far from being a new startup, OVH is a mature and expansive vendor. It's just that they're primarily involved in Europe in general, and France in particular. That looks set to change, however, and I took the opportunity to sit down with Pascal Jaillon from OVH to hear what the company is up to. The OVH product line spans traditional hosting, hosted Microsoft Exchange, domain name provisioning, and, of course, cloud.

Who is OVH?

First, some statistics about OVH. The company has 17 data centers across Europe, with a single North American facility located in Montreal to service the North American market. OVH has some pretty impressive statistics. Here's a selection:

  • 1,300 employees, the vast majority of which are engineering-related
  • 300 employees in North America (this despite being pretty much unknown in the region)
  • Funded internally, with zero external investment to date
  • 250,000 physical servers in production
  • OVH public cloud introduced in the summer of 2015 and has already scaled to the point where 430,000 production instances were spawned in March alone
  • 18 million web apps hosted by the more traditional OVH business in Europe
  • Has a Dropbox-like offering that has amassed 800,000 customers

Those statistics would be impressive for a company with funding and serving the large U.S. market. For a company funding itself and working only in Europe, it is fairly staggering. So, the news from OVH that it is planning an aggressive U.S. market entry is certainly interesting, perhaps analogous to the market entry of AliYun, Alibaba's cloud unit that has proved so successful in China.

Last year OVH announced it is committed to building 12 new data centers globally in the next two years. And this isn't a case of leasing a bunch of off-the-rack servers and sitting them in an Equinix data center. OVH own the entire process, even going so far as to design and build its own physical servers. 

This vertical integration goes even further, however. OVH has an approach that sees it utilizing its new server for a period of time for its primary services. Thereafter, servers get moved, over time, to secondary and tertiary brand offerings. At the economic end of life of the servers, a facility in France disassembles the units entirely and sell components that pass testing protocols. This hyper-focused approach allows OVH to achieve economics not dissimilar from those they would obtain by using commodity OEM hardware.

Entering the U.S. market

Given that many other non-U.S. vendors have tried to enter the U.S. market and failed dismally, how is OVH going to do this differently? Jaillon explained that the company is well aware of what it doesn't know. This isn't an arrogant organization that thinks it can come and wipe the floor with the local vendors. Rather, OVH is taking a measured approach and taking the time to understand the U.S. market. They are helped in this by an approach that sees them initially servicing their existing European customers' footprints in the U.S. and from there slowly building a U.S. customer base.

OVH doesn't plan to embark on a big marketing push within the U.S., rather it intends to spread the word to developers, invest in building its data center footprint and rely on organic growth. The company realizes it needs to do business differently in the U.S. than how it does things in Europe and is building a go-to-market and organizational plan with the more usual U.S. aspects, such as an inside sales team and 24/7 local support.

History is rife with companies that have tried and failed to scale outside of their home markets and into the hyper-competitive U.S. space. OVH, with its pedigree, operational excellence and willingness to listen and learn, looks like a contender to not join that long list of failures.

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Copyright © 2016 IDG Communications, Inc.

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