Gigaom’s Structure:Europe is where Europe’s leading cloud visionaries convene to analyse technology and product needs for cloud services in Europe. This year’s edition, coming up on September 18 & 19 in London, will showcase some of the top global thought leaders on the Cloud. One new star in the cloud space that will be sharing his views on how his fast-growing start-up and other European startups can win against Amazon in the long run is Antti Vilpponen GM of Finnish IaaS provider UpCloud. I caught up with Vilpponen, who’s incidentally also the founder and previous CEO of Arctic Startup, to learn a bit more about UpCloud and what makes them stand out in the increasingly crowded European cloud services space.
Tell me about UpCloud and what you do.
UpCloud is an infrastructure as a service provider, which basically means that we offer server resources on an hourly basis from our two data centers. The benefit of this is that customers can purchase these resources on an hourly basis and on a completely scalable basis as well. Meaning that if they require more resources at some point they can either start new servers or increase the resources in their running servers and only pay for that increased usage. So, instead of the previous model where people had to deploy servers, keep those servers running and cover the costs no matter what they used, this is more of a user-friendly model.
What would be an example usage-case?
The most common usage case has essentially evolved with the internet and, specifically, the need to manage publicity peaks. Basically, meaning where a famous blog, for example, gets passed around, you need to serve those new customers or visitors to your site. Or, if you have a popular web application and you have more users during the day you want to make sure all those users get to the application and are able to use it without any problems. You basically manage this by adding more servers or increasing resources in your current servers. This is perhaps the most common and widely used use case, at least amongst our clients.
Tell me a little bit about the competitive landscape. It’s obviously a space that’s quite crowded and a bit chaotic at the moment with lots of new competitors coming up. What do you think Europe’s position is in all this?
Speaking first about our position, I actually just did a price comparison of some of the infrastructure cloud providers in Europe or, at least, those we come across as alternatives when our customers do their comparison (here). Everything in our competitive advantage stems from our own technology, meaning that we’ve built the whole management layer, all the algorithms, all the AI into the system ourselves. Therefore we’re not using Cloudstack or Openstack or any other opensource nor any licensed version. Due to this we’re able to develop our platform in the best way we see fit, in regard to the industry dynamics. This also means that we don’t need to pay license fees to third parties, so our margins continue to be healthy even though we’re one of the most competitively priced providers in Europe.
As for Europe, I would say that its still very fragmented and with so many nations within the EU, it’s tough to scale a businesses here. But I think that the industry in Europe will commoditize in the near future and this will show in the comparability and scalability of different services. We think this is inevitable going forward.
What about the PaaS vs IaaS debate? What are your thoughts on that?
In terms of the PaaS / IaaS differentiation, firstly, from our point-of-view the difference is that PaaS has an inherent lock-in for the customer as you basically tie the customer in through tools that require them to use a certain coding language (be it Ruby on Rails that Heroku is doing). You can argue that what AWS with their database or Redshift services are in some sense PaaS because they take the coding work required to run those services away from the customer. By doing that they ease the use of the service, but at the same time they also take away some of the freedoms and opportunities offered by customized services (ie IaaS). So we definitely want to give our customers and users the most freedom and flexibility possible via our service.
In terms of the market, we think there’s definitely room for both IaaS and PaaS. Those that use PaaS are maybe companies that are more suited towards given opportunities inside of those platforms, while those that use IaaS require less common, more customized solutions. Regardless of the success of the PaaS industry, we’re obviously keen on seeing IaaS grow heavily in the future.
Any particularly types of companies that tend to be your customers (eg industry, size, etc)?
It’s actually quite difficult to generalize on that as we definitely see a relatively wide-range of customers. However, the most interesting for us at the moment have been software houses that develop quite a few projects for their customers. They kind of treat us like an external data center. That’s been a relatively interesting model for us. It’s also quite gratifying working with these types of customers because they understand infrastructure requirements and how to build infrastructure on top of a cloud platform provider such as us and then take the full benefit of our service, which is always really exciting to see.
How are you thinking about your growth across Europe?
We’re still a relatively young company in the sense that we opened up services in Finland in May 2012 and internationally in March this year. We’re growing rapidly having achieved roughly 20% month-on-month since January this year. Currently we have data centers in Helsinki and London and we’re looking to open up data centers in North America and Asia this year. But needless to say, there’s a lot of growth abroad so we’re very excited about that.
In terms of our expansion, we’re, of course, looking at the Nordics as well as industries elsewhere in Europe that scale best for our business.
If you’d like to test UpCloud’s offer, they’ve offered Rude Baguette readers 100€ vouchers. All you need to do is like this article on our Facebook page and we’ll send you through a special code which you can redeem here.
Lastly, if you want to hear Vilpponen and the other great speakers on dock at Gigaom’s Structure:Europe, you can get 25% off tickets with the code RUDEBAGUETTE. Sign up here.