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Why I’m Bullish on Cloud in Europe

January 17, 2012

Geographic expansion has always been a key component to proving out 6fusion’s technological and commercial strategy, but out of the gates we had never really identified where on the map we would choose to go.

Europe at the time looked like as good a place as any when traditional filters were applied.  There is a good swath of the market that speaks our language.  It’s not generally too far removed from North America from a support perspective (at least not as far removed as some other regions).  The acumen for cloud is generally pretty high and the potential to tap available talent seems strong.

But every time I brought the subject of Europe up, I would encounter a number of objections for young companies like 6fusion.   As I sit here about to kick off my company’s foray into the European market I was reminded of some conversations I had as I was working on the company’s course trajectory a little more than a year ago.

First there was the logic to consider among the Analyst community.  I’ll call this “The Macro Theory”.   It runs something like this: Although EMEA generally runs a tight second to North America in terms of market projections, the general consensus is that APAC will leapfrog EMEA.  The theory is that the Total Addressable Market (TAM) in APAC is much larger and the propensity for that market to “skip” an evolutionary step or two to leverage the cloud is much greater.    And the problem is magnified further by EMEA’s regulatory quandaries.  The risk, as it was put to me, is that I could be potentially investing in a region with questionable growth and one about to fall to a distant third place among the developing regions for cloud computing.

Sheesh.  Sounds pretty scary.

Next is what I call “The Lemming’s Guide to Market Planning”.   Domain experts in this category suggested the behavioral patterns of other players in the industry suggest the Analysts might be correct.  Peers in the cloud software business seemed to be flocking to APAC as though it was definitely the place to be for the cloud rapture.   Recent acquisitions in the industry showed visible undertones about the importance of the APAC market as a deal driver.

Fair enough.

But if I can be accused of anything, I can definitely be accused of not giving a sh…., um,  hoot about how others go about their business.   Blazing new trails is part of our entrepreneurial DNA at 6fusion.

So onward I pressed.

I spent some time in Europe and listened to resident experts talk about the challenges they faced.   I learned a lot about two major objections to investing in the region:

  1. There is a serious financial crisis in the EU which is breeding uncertainty at a rapid pace and;
  2. Regulations about data privacy and data residency were not conducive to supporting many cloud models and the idea of open systems seemed completely counter intuitive.

I couldn’t argue so much with the first point, so I conceded to avoid federating 6fusion iNodes in Greece or Italy in the near term, nor will I put my company into hock with Germany!

But… it’s the second problem that I saw as very intriguing.  I can see how most emerging cloud companies would examine the region and basically throw up all over the place when they saw the way in which most European authorities treated data residency.    As illustrated in a recent EuroCloud publication, there remains a lot of legal and regulatory plumbing yet to be done before the full advantages of cloud can be leveraged.   Certainly it is more work than most young companies would ever entertain – and for good reason.

But not me.

You see, 6fusion emerged as a company built around technology designed to satisfy a customer base in the offshore Caribbean.   I would argue you don’t know anything about data residency control until you deal with the subject in the context of companies whose very livelihood is based on financial and other data remaining firmly planted in remote places like Bermuda or the Cayman Islands (I lived in worked in both countries over a 12 year period).  And no, I’m not talking about tax cheats, porn peddlers and online bookies.   I’m talking about the world’s multi-nationals spanning the finance, investment, insurance and re-insurance verticals.

Coming from this pedigree it was hard for me to dramatize the challenge the European market poses. To me the challenge of data control, data residency and export as not so much of a problem.  It is an opportunity.  In fact, I see it as every reason why 6fusion would prioritize expansion into Europe above other important regions.  As time goes on what we’ll see is simply that the way we think about cloud fits very well with the way European regulators and businesses view data control.

And it would appear the market in Europe is not exactly waiting around to usurped by other more creative regimes to eat its lunch.

It’s with this view that we’ll be making landfall next week at Cloud Expo Europe to showcase our wares to the combatants of the cloud war across the pond.   And with the help of some major strategic partners we’ll be launching our European presence in a big way in the weeks to come.

1 Response to Why I’m Bullish on Cloud in Europe

  1. I do understand why you do not want to include Spain and Greece for economic reasons but Germany??? They yre the strongest economy of size in Europe.

    If you would have called out Germany for your second problem I woul dhave agreed but economic reasons I do not get.
    You could take a guidance on where others are successful. Google gained no real foothold in the enterprise world in Germany yet but is successful in France and the UK.