OVHcloud boss: European cloud providers need to stand up to the US hyperscalers

The CEO of Europe's leading cloud player, France's OVHcloud, says UK and European cloud providers should be more ambitious in taking more market spend away from US hyperscaler giants.

Michel Paulin gave his views on how the European cloud market is developing to CRN, after his group closed 2022 on a high. 

The European cloud market earned €10.4bn in Q2 2022, growing more than five times its size from early 2017.

European service providers grew their cloud revenues by 167% over that same period, according to data from Synergy Research Group, however, none have come close to challenging the big US cloud providers for leadership of the European market which is dominated by Amazon, Microsoft and Google. 

Paulin described this struggle for market share as an "endless debate" on why local European players cannot win against US hyperscalers.

He said the answer lies partially in the vision of some European players who want to "impose" their solutions on customers.

However, he believes what is more important to the market and what is most crucial for the customer is the freedom of choice.

"Not giving freedom of choice is not good for the market and of course not good for the customers in the end," he said. 

"And why? Are we more stupid than the hyperscaler's engineers? I don't think so. I'm sure that in the UK, in France, Germany, we have excellent engineers able to propose alternative solutions.

"There are many start-ups, and in the UK you have a lot of very active start-ups. It's a shame that in the end, they're all bought by hyperscalers because they have more money than the local players." 

The group boss continued to question why European players tend not to be at the top of the game when proposing innovative solutions, but asserted it is central to what he thinks should be done to boost European champions.

"The first thing is to have good innovative products. Good innovation is at the heart of what I think is absolutely mandatory," Paulin stated. 

"However, if you look at what is going on in Korea, China or the US, they are massively helped by an ecosystem of what I will call ‘people work'".

He outlined how the US is aided massively by the public sector, with the government, CIA, FBI and NASA contributing huge amounts of money to emerging and existing providers.

In Europe, 80 per cent of public sector cloud orders go to US companies, Paulin added. 

"I think we need to stop being naive. Not because our engineers are not as good, it's also because the federal government in the US, the Chinese government and the Korean government have put in place the long term strategic vision of what they can do for other countries.

"And I think this vision is missing in most of the public sector and for the government, everywhere in Europe.

"I think it's very important that we are able to - and I hope the European Commission will - put in place regulations, certifications, public ordering and a vision of where we want to go long term with balanced partnerships with all the players."