Keep expectations low and you won't be disappointed: OVH manages 6 per cent increase on its IPO debut

French cloud provider puts outage and fire behind it to focus on beating the big players


French cloud and colocation service provider OVH has edged a 6 per cent increase in its nominal market valuation following its initial public offering on the Euronext Paris stock exchange.

The Gallic tech challenger, viewed by some as the great cloud hope for Europe, has faced its fair share of challenges this year, having seen fire engulf its Strasbourg operations on 10 March.

But the European IPO proved hot in other ways, with shares up to around €19.70, well on track with the launch price range of €18.50-€20.

Last week the company trimmed roughly €50m off its IPO target, dropping its expectation for raising capital from €400m to around €350m based on the initial price.

Still, its dreams of a successful debut have not gone up in smoke, offering cause for local dignitaries to celebrate.

"It's a great day for French and European tech sovereignty," said French technology minister Cédric O in a launch ceremony. "We want to make champions here."

The money raised will be used to expand into new services such as HPC for AI and machine learning, database management solutions and integrated SaaS and IaaS. The company will also try to expand in the Americas and Asiam, hire more leaders in Europe and dabble in M&A.

OVH, which employs 2,400 staff and operates 33 data centres that host 400,000 servers, is still majority owned by CEO Octave Klaba and his family. It turned over €632m in 2020 and reported EBITDA of €263m.

As for the OVHcloud fire, it took place on March 10 and destroyed the SBG2 hall of the Strasbourg data centre, damaged SBG1 badly, and led to a massive effort to clean salvageable kit so it could be installed in the remaining three data centres at Strasbourg or moved to other OVH facilities. Thankfully, no one was hurt. The vendor has since launched a three-point "hyper resilience" plan to avoid such a catastrophe.

As well as offering some data sovereignty, which US vendors are beginning to provide, political advocates hope OVHcloud can stand up to the economic clout of Amazon, Microsoft and Google – the leaders in the cloud market worldwide.

Figures released by research firm Canalys show OVHcloud overtook IBM in EMEA cloud infrastructure services market in Q2, securing 2.8 per cent of sales, ahead of Big Blue's 2.5 per cent, a figure which fell from 3.1 per cent in 2020. The French provider also managed to stay ahead of Oracle, which also struggled to achieve growth in the EMEA market. However, it remained well behind the leaders AWS (35.1 per cent), Microsoft Azure (25 per cent) and Google Cloud (8.6 per cent), all of which managed to increase their market share over the last year.

The value of the EMEA cloud services market was $10.8bn in the second quarter of 2021, according to Canalys, a figure which increased 35 per cent compared with a year earlier.

Earlier this month Google and French titan Thales launched a partnership for a sovereign version of the G-Cloud. The two have created a joint venture to build a hyperscale cloud that uses Google's cloud tech but doesn't touch any of the ad giant's physical infrastructure.

In September Google Cloud and T-Systems announced plans to create a "sovereign cloud offering" for Germany, though details are sketchy and it may not be digital sovereignty as the term is normally understood. The project involves T-Systems playing a role in managing "a large spectrum of next-generation cloud solutions and infrastructure… powered by Google Cloud," the European integrator-cum-consultancy said.

The EU, meanwhile, has Gaia-X, a project based around federated services and mandated standards to ensure openness. AWS, er, joined the project in 2020.

Oracle announced plans for a cloud region in France earlier this week. ®

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