Can the European cloud increase public cloud adoption in APAC?

Be it public or private, cloud adoption in the Asia Pacific continues to see increasing adoption as more companies look to digitally transform their organizations. While the COVID-19 pandemic did push migration and adoption speeds faster, the reality is, organizations today know that without any dependence on the cloud, they’re going to be left behind.

According to an IDC report, public cloud service spending in APAC is expected to reach US$ 48.5 billion this year, driven mostly by growth focus and a technological edge over competitors. Cloud adoption amongst small and medium enterprises (SMEs) experienced the fastest growth in cloud investment, as they were hardest hit by the pandemic.

As expected, China is the largest market for public cloud services in 2020 with US$ 19.4 billion spent followed by Australia and India. The Southeast Asian region is also witnessing increasing cloud adoption, although it’s not as fast as it should be. Reasons for this include skills shortage as well as the lack of a proper cloud transformation strategy or framework.

At the same time, the combined public cloud IaaS and PaaS market is expected to reach US$ 400 billion by 2025. Application development and testing, structured data management, and structured data analytics will be the largest workload segments by revenue share.

“Enterprise spending on public cloud infrastructure continues to grow faster than traditional IT infrastructure segments. We expect all workload segments to grow in the double digits — some slightly faster than others — as enterprises emerge from 2020 and continue to prioritize workload migration and modernization using public cloud infrastructure,” said Andrew Smith, research manager, Cloud Infrastructure Services.

IDC anticipates that almost half of an enterprise’s products and services will be digital or digitally delivered, increasing a business’ reliance on infrastructure for computing, storage, and networking, to support more than traditional business applications by 2022. Access to innovative infrastructure resources will be critical to sustaining these digital business models of the future.

Leveraging European complexity

For OVHcloud, this represents a massive opportunity for businesses to leverage the various capabilities available on the public cloud. The French cloud computing company, which is one of the biggest hosting providers in Europe, has grown its presence in the APAC region. OVHcloud has announced expansion plans to double the capacity of its Singapore data center and also a second data center in Sydney.

While there are myriad public cloud providers available in the market, OVH Cloud brings a bit of a European twist to the APAC region. For starters, as one of the leading service providers in Europe, OVHcloud ensures security is at its core. The services provided are compliant with the GDPR, which has become the baseline for data regulations around the world.

“Depending on your go-to-market, businesses need to be compliant with all regulations. If the business is in the US, it has to be compliant with the Freedom Act. If it’s Europe, it’s the GDPR, and if it’s China, it’s their regulations. You need to look at the cloud provider depending on your go-to-market and their compliance towards it,” said Lionel Legros, OVHcloud GM for the Asia Pacific.

Lionel added that customers hosting their data with OVHcloud are assured that their company info is not subject to extraterritorial regulations. As an example, OVHcloud separates its US business arm from the rest of its services to comply with the US CLOUD Act and protect its customers from other parts of the world.

Cloud adoption costs a concern for SMEs

For SMEs, they would want to be able to understand the costs that are involved in using cloud services in the long run. While most SMEs can afford basic cloud services, it’s the additional costs that come in that is often a concern to them. Most SMEs want to be able to understand how they will be charged for services, as they would like to ensure they have sufficient funds needed.

“When an SME needs a solution, they need to pay cloud providers for the additional traffic. They need to pay for the IPs and APIs. With OVHcloud, we bundle everything up for the customer. They don’t have to pay for the traffic, especially with it being very high in Southeast Asia. There are no recurring bills for additional IPs. For example, if you take services on the Edge, you will know exactly what the cost is. SMEs understand this pricing predictability and transparency. It enables them to deep dive their business further,” explained Lionel.

Compared to other cloud providers, Lionel highlighted that most of the services they provide are also about 20% to 30% cheaper. Apart from the public cloud on the open stack, the most interesting prospect for OVHcloud is the ability to provide bare-metal cloud servers, which is almost the same price as other providers too.

As public cloud adoption increases in Southeast Asia and businesses look to international markets, organizations now have another option they can leverage for their cloud services.

At the end of the day, businesses need to make sure they have a proper cloud transformation framework planned out and have a clear understanding of the costs involves and what workloads they will be moving to the cloud. Failure to do so may only see them spending more and losing out to competitors.

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