Octave Klaba wants to build a European cloud-computing champion

Octave Klaba, the founding father of OVHcloud, arrived at a courtroom in Paris earlier this 12 months to bid for a promising tech start-up that had gone bankrupt, solely to bump right into a rival bidder: Xavier Niel, France’s most well-known tech billionaire.

“He’s a shark who can spot a great enterprise alternative, and so am I,” Klaba stated, remembering how he outbid Niel, the founding father of the tech incubator Station F and a serial investor in start-ups, for Shadow, a cloud gaming service.

In contrast to Niel, the 46-year-old Poland-born entrepreneur has stored a comparatively low profile till now. However this week, the cloud computing firm OVHcloud he based within the industrial metropolis of Roubaix in northern France will begin buying and selling on the Paris inventory change.

The group goals to boost €350m by promoting new shares on the IPO at a valuation of between €3.5bn to €3.75bn, and Klaba and his household nonetheless personal 78 per cent of the shares.

Even after they promote a slice on the IPO, their roughly 70 per cent stake will probably be price €2.5bn if the shares worth on the backside of the vary, making them a number of the richest tech entrepreneurs in Europe.

“I do know it’s exhausting to imagine that an organization from Roubaix that was bootstrapped with no enterprise funding can compete with American tech giants,” stated Klaba. “The IPO will assist us persuade the doubters that that is actually taking place and that they need to get on board.”

Based in 1999 as an organization that hosted web sites, OVHcloud now employs 2,200 individuals and supplies computing, storage and networking companies to shoppers principally in Europe and the US. A giant hearth at a knowledge centre in Strasbourg earlier this 12 months dented its development and incurred further prices, nevertheless it nonetheless goals for annual gross sales of €663m and roughly €230m in working revenue.

Octave is chair, his father Henryk and his brother Miroslaw, each engineers, work as the pinnacle of networking and R&D, respectively and are board members.

The IPO will probably be a key second for France’s tech ecosystem, which is steadily creating extra billion-dollar start-ups, however which has seen few public listings in Paris. Earlier than digital music firm Imagine went public earlier this 12 months, no France-based tech firm had listed publicly at a valuation of greater than a billion {dollars} because the internet advertising group Criteo listed on Nasdaq in 2013.

In the meantime, some French founders have moved to the US to broaden their firms, resulting in blockbuster IPOs akin to DataDog in 2019 and Snowflake in 2020.

Klaba, who’s married with three daughters, doesn’t seem to care a lot in regards to the outward trappings of wealth. His workplace apparel consists of T-shirts with OVH logos and sneakers. “I used to be born in communist Poland the place we had nothing so that you be taught to make do with little or no,” he stated.

OVHcloud employs 2,200 individuals and supplies computing, storage and networking companies to shoppers principally in Europe and the US © François Lafite/OVHcloud

As a substitute, he spends his cash on increasing the corporate, enjoying guitar, and extra not too long ago investing in different start-ups and organising a brand new wind-turbine manufacturing firm. A critical battle with cancer about 10 years in the past made him realise his priorities and that OVHcloud wanted to be structured and strengthened so it might outlive him.

Klaba’s grandfather was a miner within the north of France after the primary world battle, however returned residence to Poland in 1949. However by his grandfather’s French citizenship, the household was in a position to relocate to France when Klaba and his brother had been youngsters.

“We instructed [our parents] we needed to go,” stated Klaba. “Ever since then I noticed it as my function to ensure that the household didn’t find yourself poor in France. To care for everybody.” 

Klaba didn’t converse a lot French when the household arrived in Roubaix, however developed an curiosity within the web, and within the servers underpinning networks, at engineering college in Lille.

That pastime would lead him to create OVH (the title stands for “on vous héberge”, French for “we host you”) which saved and operated internet pages for its shoppers. As the corporate grew, the entire household joined the enterprise. Klaba’s father helped invent OVH’s in-house server expertise that turned key to their low-cost mannequin because it used water to chill its processors as a substitute of costlier air con. His mom dealt with finance and administration.

The household took no outdoors funding till 2016 when it bought a 20 per cent stake to personal fairness funds KKR and Tower Brook for €250m.

“What I’m making an attempt to show with OVH is that there’s one other mannequin that’s extra European that places entrepreneurs and households on the centre of the ecosystem,” stated Klaba, referring to how he had eschewed enterprise capital and expanded extra slowly than a US start-up. “In ours, the entrepreneurs maintain management as a substitute of being on the mercy of buyers or monetary pressures.”

Klaba received a serving to hand early on from none apart from Niel, who rented the younger entrepreneur some house in a constructing he owned in Paris for his rising banks of servers. Klaba was so devoted that he used to sleep subsequent to his tools some nights, Niel recalled.

“Given his uncommon life story, what he has completed is spectacular,” stated Niel. “He got here from nowhere to construct an important firm that will probably be a European chief in cloud computing.”

At the moment, OVHcloud is making an attempt to crack the marketplace for so-called public cloud computing companies, which is rising at roughly 25 per cent a 12 months and is dominated by the US gamers together with Google, Amazon and Microsoft.

To date it has lacked the dimensions and monetary clout to compete instantly with them on this section — it estimates that it has 1 per cent market share in Europe, in comparison with 66 per cent for the US teams.

However its place is stronger in “non-public cloud companies” the place tools akin to servers are used solely by one enterprise or organisation versus shared, as in public clouds. OVH estimates that this market represents gross sales of €8bn to €13bn a 12 months globally, and is rising at 15 to twenty per cent a 12 months. In Europe, it estimates that it holds about 10 to fifteen per cent market share, on a par with its fundamental competitor IBM Cloud.

OVHcloud additionally nonetheless earns one-quarter of its revenues from internet hosting, the place it has a number one place in Europe.

Many in political circles in Paris and Brussels are rooting for OVHcloud to succeed as a result of they fear that European sovereignty and financial competitiveness could possibly be in danger if firms and governments are compelled to rely solely on US cloud suppliers.

Klaba has ably used such considerations to advocate for OVH as a safer different as a result of its servers outdoors the US are usually not topic to go looking warrants from US legislation enforcement and intelligence businesses, though some specialists and attorneys query that declare.

“OVHcloud is the one European firm that has an opportunity of resisting the dominance of the US tech giants,” stated Cedric O, France’s junior minister for digital affairs. “It’s a crucial actor in European tech, and it’s telling that Octave has constructed it on his personal with none assist.”


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