OVH Group – Europe's largest cloud service company

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French OVH Cloud is practically the only viable large European cloud service. Its parent company’s stock, OVH Group, is listed on the Paris stock exchange and is included in the Eurostoxx600 index. Software is increasingly moving to cloud services. This megatrend is only strengthening with artificial intelligence. Currently, the cloud service market is dominated by three big players: Amazon, Microsoft, and Google. The results of these three companies from cloud services have grown rapidly to fabulous sums:

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https://www.reuters.com/commentary/breakingviews/europe-will-struggle-get-big-tech-off-its-cloud-2025-06-26/

Cloud services have concentrated on these three giants due to the hyperscale advantage. Tech giants have been able to invest billions in data centers. I find it sad how Europe has fallen behind in this development. This development already threatens to wither Europe’s economy, as it means large cash flows out of Europe. Furthermore, this also makes Europe dependent on the United States, as critical infrastructure is controlled by American companies.

I would be interested to hear others’ views on whether OVH Group has any chance of competing against the tech giants?

OVH Cloud offers services especially to public sector entities for whom data sovereignty is important. In addition, it offers services to small businesses with affordable and flexible pricing. I would argue that with US politics becoming increasingly erratic, there would be a need for a European cloud service. In terms of numbers, OVH Group has also grown impressively. H1 2025 organic growth was 10.2% and EBITDA was 40%.

H1 2025 results:

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https://corporate.ovhcloud.com/sites/default/files/external_files/2025-04-17-ovhcloud-h1-fy25-pr-eng-vdef_.pdf

Having studied economics, it is very difficult for me to understand how three tech giants make such huge profits from cloud services. According to economic theories, if an industry has such large profits due to investments in data centers, other companies should enter the market, and over time, the market would be divided among several companies. I discussed this topic at work with a developer who previously worked as a cloud engineer at a large Finnish company. According to him, large companies might pay over a billion euros a year for cloud services, but ease of use drives them to become users of Google, AWS, or Azure. Companies might have over 200 software applications in use, so once they have moved to the cloud, it is difficult to switch providers, as all software would have to be migrated to another provider again. Companies might also simultaneously purchase other services/software from Google, Microsoft, or Amazon, and certain programs are better compatible with the tech giants’ own cloud services. Small companies, on the other hand, use fewer software applications, making it easier for them to buy services from the cheapest provider, and they can more easily switch providers. This is why OVH Group has particularly succeeded in acquiring small businesses as customers. Of course, competition in cloud services is tougher for small businesses, but the cloud market is growing so rapidly that I am cautiously interested in OVH Group. Furthermore, as OVH Group grows, it may start to compete for the same customers as the three big tech giants. In the public sector, I believe OVH Group will particularly succeed, as Europe has woken up to the importance of data sovereignty.

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OVH Group published its Q4 results today. The company’s fiscal year ended at the end of August. Revenue exceeded the one billion mark, and growth was an impressive 9.3%. The EDITBA margin was also high at 40.4%. International expansion continued, and the company reported growing demand in Canada, Singapore, and India, among other places. What was particularly pleasing to me was that even in the home turf of tech giants, the United States, revenue exceeded 100 million euros. This is notoriously one of the most challenging markets for technology companies. However, the stock plummeted over -20% on the stock exchange when the company forecast only 5-7% growth for the next year. I regret buying a monitoring position clearly too early.

A significant piece of news was also that the company’s founder, Octave Klaba, is returning as the company’s CEO. Klaba’s family is still the company’s largest owner, owning over 80% of it. I always consider it positive when a CEO has a significant stake. Companies that have grown into tech giants have almost without exception been led by an owner with a clear vision and passion. Klaba has particularly highlighted the importance of data sovereignty and the need for Europe to have alternatives to US tech giants.

Reuters news on the results:

https://www.reuters.com/sustainability/boards-policy-regulation/ovhcloud-founder-klaba-returns-ceo-amid-1-billion-euros-revenue-milestone-2025-10-21/

Company press release on the results:

https://corporate.ovhcloud.com/en/newsroom/news/financial-results-fy25/

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Since the last interim report, OVH Group’s share price has continued its decline (8.92€ → 7.58€). The largest single-day drop was -16.8%, following the announcement by the company’s founder and largest shareholder, Miroslaw Klaba, that he had reduced his stake by 3.6 million shares. However, he remains the company’s largest shareholder with a 42.5% stake.

https://www.marketscreener.com/news/sale-of-3-6-million-ovhcloud-shares-confirmed-ce7d51dddd8cf625

Geopolitical tectonic plates have been shifting again recently, to the point where, logically, there should be an even greater demand for European cloud services. I no longer consider it an impossible idea that the United States might take Greenland by force. The United States is transforming from a strong ally of Europe into an unpredictable superpower with its own interests. Some kind of awakening to this development is beginning to occur among policymakers. At the very least, MEP Aura Salla has demanded that Finland and the EU break free from their dependence on Microsoft:

It is wild how much money flows into the services of these tech giants (quote from Salla’s press release):

In Finland, public sector actors spent approximately 150 million euros on Microsoft licenses in 2023. As prices rise, the need for additional funding could reach up to 225 million euros. The largest payers are the wellbeing services counties. This is equivalent to the entire annual budget of a medium-sized regional hospital. It is predicted that by 2029, the majority of organizations relying on Microsoft technology will be spending 30–50 percent more on its software and services every three years.

If the attitude of the United States becomes even more anti-European, I believe that data sovereignty will start to look like a good investment to politicians.

Information has also been circulating in several online publications that Airbus might be moving away from Azure and AWS. If this information were true, it would be a major shift in direction, and many other companies could follow suit. However, I haven’t found the same story reported by any high-quality media outlets. That said, the CEO of Airbus has frequently spoken about the importance of European cloud services and data sovereignty, so there might well be some truth to the story.

I don’t consider OVH Group a “no-brainer” by any means, but I am involved with a small position. At the moment, the direction of development in the United States is worrying, and I see OVH Group as a good way to hedge against this risk.

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Following Donald Trump’s comments regarding Greenland, Europe has begun to truly wake up to the risks associated with US cloud services. For example, France and Denmark have already announced that they are seeking independence from American software in their critical infrastructure. As a result, OVH Group’s share price has started to rise. Since the beginning of the year, it is up +29.15%, having peaked at +45.21%.

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https://www.hs.fi/suomi/art-2000011780845.html

Country risk related to the United States emerged when the French state announced it would stop using the American programs Teams and Zoom by 2027. In their place, the Visio software, developed by the French themselves, will be installed. France also aims to move away from services like Gmail and Slack.

The French are seeking independence particularly from American software in their critical infrastructure.

I consider it quite likely that France will move to OVH Group for cloud services.

Based on the article, Finland is not yet considering a move to European service providers at this stage. However, I interpret these comments with cautious optimism—that if services develop and become more available, a transition could begin. Similar discussions are likely taking place in many other countries.

“Many actors rely on US cloud services, and their risks are being widely discussed in Europe. This is primarily about the availability and usability of digital services that rely on cloud services,” says Anssi Kärkkäinen, Director-General of the National Cyber Security Centre at the Finnish Transport and Communications Agency (Anssi Kärkkäinen). Kärkkäinen replied to HS via email.

Kärkkäinen writes that political risks related to usability have now come to the fore: every organization should assess the risks and alternative solutions for services.

According to him, developing a European cloud service would be an important step in addressing current security and sovereignty requirements.

Jarkko Levasma, Director of the Government ICT Department, says that the country risk related to the United States is not a new issue, although previously the main focus was on data protection issues.

Levasma suspects that the French government’s announcement to adopt its own software might also be a temporal coincidence, as France has been developing its own office software for the public administration for years.

“We are well aware of it, but from Finland’s perspective, it does not offer a competitive alternative, at least at this stage,” Levasma says.

Private actors have also woken up to the cloud service issue. Kauppalehti reported that the Finnish software company Vertics is terminating all its maintenance and production environments on American cloud services such as Amazon Web Services, Google Cloud, and Microsoft Azure. However, instead of OVH Cloud, they are moving to the Finnish UpCloud, which is also a great thing. Hopefully, UpCloud will also be listed on the stock exchange.

https://www.kauppalehti.fi/uutiset/a/deb82329-1c9f-4f53-9d59-83177658710d

I interpret from the CEO’s comments that the prices of US cloud services have been quite high and moving to a European service was relatively easy.

“American cloud services are leading technologies, but we have wondered about their pricing since the company’s early days. UpCloud is actually a more affordable option, and we can build our infrastructure on top of it relatively painlessly,” Pohjanmaa reveals.

Now, if a few states and companies that value data sovereignty as important move to European cloud services, this could trigger a larger snowball effect. The moat of American cloud services has been that they have become a standard with which all software is compatible and in which consultants and developers have specialized. If European cloud services reach a critical mass of customers, they could become a more cost-effective alternative to American services.

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I also joined during January. I didn’t actually notice this thread until now—a pleasant surprise! My opening position here was also a classic: at the year’s highs, and it started dropping from there. I’ve added a couple of times since, and I’m ready to pull the trigger to add for a fourth time.

OVH seems to go from day to day with fairly low volume, so the company is still largely flying under the radar.

OVH Group’s goal is to position the company to cross the 2 billion revenue threshold in the coming years. Presumably, we’ll hear more details later this year about exactly which year that will be; the guidance is simply ambitious, albeit vague. But the intention now is to grow ambitiously. Which, after review, traditionally means restructuring the organization to be more streamlined (insert all the other traditional jargon here, maybe with AI).

I liked listening to the last earnings call and hearing how the current memory shortage was “crystal clear” to OVH well in advance, and they had proactively filled their warehouses. Although in this business, you have to update the infra all the time, so the problem will eventually catch up regardless.

And the infra and offering have been updated as you’d expect:

Europe has been lagging in data centers, but OVH Group will face fierce competition even from within the continent. For example, Deutsche Telekom is stepping into the data center arena in a big way:

On the other hand, since the political winds are now blowing towards digital sovereignty, there should be plenty more apples for the picking. Presumably, France and Germany will favor their own as much as possible, so the companies in those countries should be able to get their share of the spoils.

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