Regional relationships, data sovereignty and vertical requirements push global adoption.


When it comes to breaking through regional regulations and industry regulations, governments and companies from Asia to Europe are increasingly heading to public clouds.

With recent the launches of the OVH public cloud, Deutsche Telekom’s Open Telekom Cloud and the Cloud Team Alliance, plus large customer announcements from DataCentred and City Network, OpenStack public clouds are quickly gaining ground in Europe. Companies like Fujitsu, GMO Internet and UnitedStack are helping lead the way in Asia, where trusted business partners are key. And in North America, Internap recently launched a bare metal service offering, while Auro, VexxHost and CloudA are taking off in Canada.

This new wave of OpenStack public cloud service providers have become popular for companies and developers with regional or industry-specific business requirements, and those seeking OpenStack APIs for workload portability and hybrid cloud opportunities. Here are some of the main drivers fueling OpenStack public cloud growth globally.

Regional business relationships

At the OpenStack Summit Tokyo keynote, GMO Internet demonstrated how their public cloud service has grown with more than 15,000 corporate customers in mostly Japan, and some presence in other Asian countries and the U.S.

“We adopted OpenStack for our four core products,” said Hironobu Saitoh, a technical evangelist at GMO Internet. “Our policy was to design and implement our services ourselves, and with OpenStack we can do that very quickly.”

GMO Internet launched their public cloud service, ConoHa, in 2015 to provide a new set of cloud services for established regional customers like C Channel, a popular Japanese mobile lifestyle video site showing 60 second, professionally-edited videos on fashion, food and culture.

“This is a new way of capturing and uploading video,” Akira Morikawa, president of C Channel, shared during the keynote. “There’s very high bandwidth required for our video service, and particularly when we provide this through smartphones, stability is critical.”

Aiming Inc., an online mobile gaming company, turned to GMO Internet for similar needs, and found a match in GMO’s OpenStack-based CloudApp product. Aiming Inc. runs three games on CloudApp—including a real-time multi-player game—with more than 10 million downloads between them. Like C Channel, stability was critical to create the user experience Aiming Inc. desired.

“OpenStack is providing great benefits to our cloud products, and to our customers,” said Saitoh. “We can build a number of different cloud services; OpenStack is an indispensable platform for any kind of business.”

Vertical specialization

City Network, a European public, private and hybrid cloud provider, saw an opportunity to bring the benefits of infrastructure-as-a-service (IaaS) to customers who were restricted by regulatory compliance by offering OpenStack public clouds.

“Banks and insurance companies spend huge amounts of time and money on maintaining their own data centers and IT-departments when they should be focusing on innovation and development of new services for their ever-more demanding customers,” says Özgür Bal, City Network marketing manager. “But often times they feel compelled to do it all themselves just to stay compliant.”

City Network knew it could build OpenStack clouds that met regulations, and that as a large-scale provider, it could offer scalability, flexibility and cost efficiency that its customers couldn’t replicate by themselves. “It allows the financial industry and other to also take advantage of true IaaS,” says Bal, “without having to worry about security or compliance, or any of the million other things that they are subject to.”

While initially earning the trust of the industry was no easy task, organizations have seen the innovation and security City Network offers. City Network recently announced their partnership with Folksam, one of Sweden’s largest insurance companies, and is expected to announce more partnerships in the financial industry after the release of their City Cloud for Bank & Finance service.

Data sovereignty

Deutsche Telekom is the latest company to arrive on the scene with the launch of a new public cloud that combines flexible IT resources with strict data protection regulations. T-Systems, the business division of Deutsche Telekom, will operate and manage the new IaaS offering from its highly secure data centers in Germany.

Starting in December, companies of all sizes will be able to order IT services such as computing, storage and networking in a pay-as-you-go model through the new Open Telekom Cloud portal.

"Access to a scalable, inexpensive public cloud provided by a German service provider from a German data center under German law will be very attractive to many customers in Germany," said Andreas Zilch, an analyst at PAC in Deutsche Telekom’s press release. "In particular the combination of an inexpensive service and German legal security represents a unique selling point right now."

Since December 2015, Manchester-based DataCentred has been hosting Her Majesty’s Revenue and Customs (HMRC) Multichannel Digital Tax Platform (MDTP) which manages the tax accounts for individuals and businesses throughout the UK. For DataCentred, providing a regional service, meeting regulations and maintaining data sovereignty coalesced in this project, but Matt Jarvis, head of cloud at DataCentred, knew his team’s preparedness and the OpenStack platform was up to the task.

In the industries Jarvis works with, he’s seen OpenStack emerge as the standard. “People are starting to think very closely about how they can share resources with each other and [have] an open standard around cloud, especially with a piece about federation.”

“There are obviously considerations about security,” says Jarvis. “But we already had a team who were very familiar with operating at the highest levels of security, and ultimately, the entire platform was built with that level of security in mind when we started. Security is important in the government sector, but really it’s important in every sector.”

The importance data sovereignty in European countries has heavily influenced the density of OpenStack public cloud providers. “There’s providers in almost every country, which I think is probably a very different landscape from the US.”

The rise of consortiums

So, what’s next? Jarvis says consortium-based solutions will be on the rise.

“When you look at very large scale procurement like the recent procurement that the EU have done, it’s not possible for most small and medium-sized enterprises (SMEs) to participate in that without participating as part of a consortium,” he said. “Again, OpenStack lends itself very well to that in terms of federation. There’s a natural mechanism by which SMEs can form consortiums and participate in larger bids than they’d be capable of on their own.”

His prediction is already coming true. Take Europe’s Cloud Team Alliance, which links Numergy from France, Gigas from Spain, Portugal Telecom and Enter from Italy. They recently won a bid for OpenStack-based public Iaas to 52 European institutions. After a lengthy vetting process, the EU gave OpenStack and the Alliance the green light to offer solutions for public cloud compute and storage facilities to entities including the EU Parliament, EU Council and the European Union Agency for Network and Information Security.

“We’ll be going door-to-door to sell OpenStack, it’s like something out of the 1950s,” said Enter’s Mariano Cunietti. “But it’s a sign that something is changing and we can be a viable alternative.”

Cover Photo // CC BY NC

This article first appeared in the print edition of Superuser magazine, distributed at the Austin Summit. If you’d like to contribute to the next one, get in touch: [email protected]