Multi-cloud will be good for European providers, says MSP

Fredrik Ohlsén, CEO of Basefarm, now part of Orange, says managed services and data protection will help Europe compete in the new landscape

When Edward Snowden revealed the extent of US online surveillance and espionage in 2014, many pundits predicted a boost for the European public cloud industry. Since then, though, the US big three have become even bigger with the only foreseeable competition coming from China.

Computing spoke to Fredrik Ohlsén, CEO of Basefarm, a European managed services provider headquartered in Norway that was recently acquired by Orange. Basefarm is better known in Sweden, the Netherlands, Austria and Germany than in the UK. So did Europe miss a trick?

"I don't think so," said Ohlsén. "US and China are very large markets that favour the emergence of such giants. Even if Europe is seen as a large market, it's more of a confederation which makes things happen slower."

If European providers find it hard to compete with the megaclouds (Amazon, Microsoft and Google), the same applies other firms which were late to the market or struggled to reposition their strategies. So how does Ohlsén see the future panning out for the other players?

"Time to market is crucial, and that is why we see Microsoft's $7.5 bn acquisition of GitHub which give them the opportunity to offer additional services within the developer's ecosystem to make Azure more competitive and IBM's $34 bn purchase of Red Hat to expand their multi-cloud capabilities," Ohlsén said.

"Other large ISVs such as Oracle or SAP provide their own cloud mainly for delivering their software in SaaS mode and then trying to extend it to general purpose public cloud.

"According to Gartner, the average number of cloud providers will be five. So no it's not all over, but it's most likely to be limited to a niche market or more business need driven vertical markets."

Orange, which acquired Basefarm in July, has its own strategy for scale which uses a shared industrial platform called Flexible Engine based in European data centres which is also used by other European telcos and China Telecom.

"Orange sells Flexible Engine in parallel with AWS, Azure and others. It is not a 'one size fits all'. The strength lays in the understanding and leveraging the combination of clouds," Ohlsén explained.

However, European cloud providers' real strengths are in the data protection side. That includes compliance with GDPR, and also being able to work in countries such as Germany and the Netherlands which have very strict data protection and localisation rules above and beyond that coming out of Brussels.

In addition, the US may have shot itself in the foot again with the Cloud Act, which increases the difficulties for European organisations who might want to move to the big public cloud providers, he said.

Another trend that should prove helpful to European providers is multi-cloud. Is this something that Ohlsén is seeing?

"Definitely yes. All major RFPs include a multi-cloud request which is in line with recent studies," he said, referring to an Ovum survey which predicts that 40 per cent of critical applications will run in the cloud in 2019 from 20 per cent in 2018.

"They will be using the most appropriate cloud based on different requirements. For instance, private for predictable high volume workloads, Azure for lift'n'shift and O365 continuity, AWS for cloud-native apps and Google for AI capabilities. This allows streamlining costs and avoids single vendor lock-in."

As an MSP, Basefarm is focused on delivering standardised enterprise-grade application services in multi-cloud environments as well as supporting AI solutions in Nordics and Germany. The Orange acquisition should allow the company to extend its reach as well as new geographies, Ohlsén said.

"Orange will be adding more resources, capabilities and assets into the Basefarm fold. Many clients are in the early adoption, ie testing the waters and learning the ropes but have yet to release true business value of the multi-cloud. Basefarm's medicine is to add the big data/AI on top of the multi-cloud flexibility and scalability."

But won't MSPs eventually be subsumed by the big cloud providers?

"The key word in MSPs is M - Managed," said Ohlsén. "As complexity significantly increases over the years, companies will no longer be able to keep pace with new technologies and will turn to MSPs to get business-oriented - not technology - services and solutions."