Not surprisingly, the "French cloud" concept not taking off just yet

Jan 15, 2013
Vote on Hacker News

The ‘French Cloud’, aka Andromede then Numergy and Cloudwatt, is a concept that has a long way to go until it proves itself. Kurt Salmon, recently conducted a study examing how attractive Numergy’s and Cloudwatt’s offer is perceived by the French market.  As mentioned previously, each of the newly created companies have centered their strategy around two key elements. First, that the US Patriot Act could pose a threat to non-US companies in terms of data privacy and protection and second that, as a result, European companies’ data shoud be stored in Europe to ensure the data was well out of reach of the US government.  Although potential users of cloud services have expressed in the past that these two issues were “imperative” to them, that no longer seems to be the case.

The study found, first of all, that there is a growing belief that it’s pretty unlikely that the US cloud providers would tarnish their credibility by rolling over and handing their clients’ content to the US government.  This is probably a fairly safe assumption to make given that each of the major cloud providers have massive resources as well as very strong influence (via their lobbying activities) over the actions and decisions of the US goverment.  There’s no way they’re giving up that data without a fight.  Next, the study ound that localizing clients’ content in Europe wasn’t enough of a motivator for companies to switch to the French cloud.  This is also complicated by the fact thats major cloud players such as IBM and Amazon are fighting this head on by building datacenters in France, specifically to house their French and other European clients’ data.  Lastly, other factors, such as reliability, cost, sustainability, and flexibility, have risen to the top as important criteria when selecting a cloud provider.  Pricing, in particular, looks to be a very difficult criteria for Numergy or Cloudwatt to ‘win’ on.  As pointed out by Kurt Salmon, the existing players, who have extremely well-developed global infrastructures in place, already have scale, something that France’s new entrants do not.  In addition, Kurt Salmon also (rightly) lament the involvement of the French government in this whole initiative because they have pushed that the scope be limited to Europe.  Given the amount of infrastructure investment required and their aspiration to attract European multinationals, it would have been a much better strategy to encourage France’s new cloud providers to consider other markets in addition to Europe.

As the study poked a lot of holes in Cloudwatt’s and Numergy’s strategy. there was a suggesetion tht the new cloud providers switch gears a bit and focus on offering specific value-added cloud services. Apparently, the CEO of Cloudwatt, Patrick Starck, alluded to offering something along these lines in a recent press conference.  It’s clear though that both need to do a lot more work around defining what these services would be and how they could leverage them to differentiate themsevles from the competition.

One question that the study didn’t addess was how potential customers would even be able to differentiate Cloudwatt and Numergy from each other?  If each are based on the same basic premise, why would anyone assume that both could succeed, particuarly in a market that is dominated by the US giants?  Any way you look at this, looks like a bit of a strategy rethink may be in order.