Summary:

What does a national cloud look like? In France’s case, it looks like two fairly similar ventures — one based on OpenStack and the other soon to follow in its footsteps. Does this approach make sense?

Following Edward Snowden’s revelations of U.S. cloud snooping, there has been much talk about a “European cloud.” As EU digital chief Neelie Kroes said on Thursday, this will most likely be a federation of national cloud projects – she has previously warned against excessive fragmentation within the Union, arguing that this would hamper efforts to achieve sufficient scale.

But what do those national projects look like? Probably the most intriguing example is to be found in France, where the state has taken a twin-pronged approach to stimulating the local cloud provider scene. The country’s “Sovereign Cloud” scheme pre-dates the revelations around NSA and GCHQ espionage – its two separate Amazon rivals, Cloudwatt and Numergy, were formed in 2012 – but the new political landscape around cloud certainly favors those companies.

The French plan

“[French industry] had a kind of vision of a new era coming in with again no significant European player on the battlefield, so they began to think about that, thinking about how we structure ourselves to catch up on this revolution,” Cloudwatt strategy chief Pierre Paperon told me.

Government funding helped make this happen. The providers, Numergy and Cloudwatt, each benefited from €75 million ($101 million) from the French government. They have similar ownership structures: SFR owns 47 percent and Bull 20 percent of Numergy, where the French state holds 33 percent; Orange owns 44.5 percent of Cloudwatt, Thales 22.5 percent and the French state 33 percent.

French protection for French data was always a motive behind the creation of Cloudwatt and Numergy due to fears over the provisions of the U.S. Patriot Act. However, the project has come in for serious criticism — companies such as IBM have complained that the state’s investment distorts competition, and smaller French cloud providers without strong state links are also irked.

The twin firms also had an awkward birth. The original plan was to have one French national cloud, Andromède, involving Orange, Thales and Dassault. Dassault pulled out in early 2012, saying the venture wouldn’t be sufficiently profitable. The resulting shambles led to two consortia rather than one, with the French government splitting its investment equally between them.

The split

The two resulting companies took very different technological approaches. Numergy was formed by the telecoms firms SFR and IT outsourcing giant Bull (a serious data center technology player but coincidentally also a vendor of the sort of equipment the NSA uses to scoop up data). This meant Numergy inherited SFR’s existing cloud infrastructure, which allowed it to immediately start enterprise-focused services through partners in September 2012 (it began direct sales in May this year, but only for very small concerns running less than 5 virtual machines).

Cloudwatt, on the other hand, only commenced its service offerings in October this year, with a Dropbox-like storage product that’s advertised on TV and targets small businesses and organizations. Rather than effectively rebranding existing services, Cloudwatt started from scratch, building an infrastructure-as-a-service project based on OpenStack, largely with the aid of contractor eNovance.

“We chose OpenStack as the main operating system to focus initially on storage [to serve] the appetite of the market for basic storage, on synchronization, on collaboration,” Paperon said. “We are also of course building compute-as-a-service that will be in first semester of next year.”

“One reason for OpenStack is we had a very clear vision at the beginning. I was at university when Bill Gates went to IBM and asked for the disk operating system DOS. When we began to think about the subject two years ago, it was pretty clear that the same battle was going on with what will be the cloud OS of the future. When we looked at European players, there was only one, eNovance, so we took the plunge to be one of the first OpenStack providers.”

Cloudwatt has also been contributing to the OpenStack community with work on the Swift object storage system and the Keystone identity service, with much of that effort involving the translation of hundreds of pages of documentation into French. As it turns out, this will prove handy for Numergy, too.

Semi-convergence

According to Numergy development director Alexandre Steiner, the company’s original setup – a mix of VMware, Cisco and HP – provided robust infrastructure that allowed it to offer strong service-level agreements (SLAs), but has proven to be “very expensive”. Now Numergy too is looking to an OpenStack future.

“We were lucky to start with something quite operational and robust, but in terms of evolution it’s maybe not what we had envisioned to be the proper business model or margin,” Steiner said. “We decided as of January to create a full technological roadmap… in which we have chosen to go for-ward with the OpenStack Foundation in our operating tooling and package. We are working internally on our version 2, and we want to be up and running at the end of Q1 next year.”

But this isn’t going to represent full convergence between Numergy and Cloudwatt’s approaches. Instead, Steiner explained, Numergy will have two platforms: “one that’s up and running now, and another which will be very much OpenStack, KVM and a lot of other more efficient, low-cost ways to provide cloud services.”

When it comes to taking on Amazon, Cloudwatt and Numergy hew to the now well-trodden path of other up-and-coming European cloud players, touting greater flexibility, simplicity and predictability – and of course Europeanness. “People are highly concerned in the market and very often we have questions about where the data is,” Cloudwatt’s Paperon said.

Steiner also said nationality was a factor: “What we want to do against the more international players is three things. We are definitely playing on the psychological level of being a French or European player. We are working on technology as well, where we believe the fact that we can be close brings some differentiators, whether on SLA standpoint, latency, or proximity of what you can have locally.”

“The third one is very much linked to regulation. Because we are a local player, we have to comply with every rule in the country – health, tax, privacy. Compliance is what we have to live and breathe by.”

Federation hopes

Interestingly, given the European Commission’s desire to see an EU-wide cloud federation, Numergy has already begun setting up compliance-focused partnerships with counterparts in other European countries, beginning with Belgium’s Belgacom.

“We’re building a federation of public cloud so we can offer international infrastructure but on a country-by-country basis – in that sense we’re offering a very solid alternative to the international players,” Steiner said, adding that the “Cloud Team Alliance” should have 2-3 more members by the end of 2013, and around 15-20 more during 2014.

It remains to be seen how that alliance will gel with Neelie Kroes’s “Cloud for Europe” initiative, but it certainly appears that federation is the way forward. There don’t seem to be serious differences between Cloudwatt and Numergy — even less so once Numergy’s OpenStackification goes through — and, when you’re battling Amazon, scale has to be a crucial issue.

Particularly as European rules on data protection converge, smudging out the lines between various EU countries’ compliance regimes, I suspect we will see this rather odd two-national-clouds strategy subsumed into something larger, more powerful and — let’s face it — more sensible. Because whatever adjective you might want to append to the situation I just described, “efficient” isn’t it.

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