WSJ News Exclusive | Europe’s OVHcloud Readies Possible $4.7 Billion IPO

European cloud-services provider OVHcloud plans to launch a possible initial public offering as soon as Monday that could value the business at more than $4.7 billion, according to people familiar with the matter.

Based in Roubaix, France, OVHcloud rents computing, storage and networking capability to users, overseeing a network of dozens of data centers across North America, Europe, Singapore and Australia. It also operates its own fiber-optic network globally that the company claims gives it a competitive edge.

The potential offering comes amid surging demand for web hosting and other cloud services after the coronavirus pandemic pushed businesses and consumers to accelerate the adoption of digital communication to interact.

The challenge and opportunity for OVHcloud, which was founded in 1999 and is formally known as OVH Groupe, will be convincing investors it has the ability to compete with industry behemoths such as Inc.,

Microsoft Corp.’s

MSFT -1.75%

Azure and Google Cloud, a unit of

Alphabet Inc.

GOOG -2.02%

Largely owned by the family of founder and chairman

Octave Klaba,

the company has built its own in-house server technology, including systems that run water over its processors to cool them.

An IPO could value OVHcloud at more than €4 billion, equivalent to $4.7 billion, some of the people said. The company won’t make any final decision on whether to proceed with the offering and targeted price and valuation until it is finished gauging investor interest following a series of meetings. The company is expected to list its shares in Paris, if the offering proceeds.

A spokeswoman for OVHcloud declined to comment on a potential IPO.

OVHcloud describes itself as the biggest European cloud-hosting provider. Still, it faces stiff competition in its home region from American cloud-services providers, which lead in market share in Europe. In June, Amazon said that Swisscom AG, the Swiss communications and information-technology services company, selected AWS as its preferred public cloud provider for its enterprise IT.

Overall, Amazon’s cloud infrastructure revenue totaled $26.2 billion in 2020, giving it a 40.8% share of the global market, according to Gartner Inc., a research firm.  Microsoft had the next biggest business, generating $12.7 billion for a 19.7% share of the market.

OVHcloud has been pushing itself as a safe steward for data for European companies and governments that are concerned about the potential that U.S. authorities could access their information. European countries, in particular France and Germany, have been pushing for what they call a sovereign cloud, to give the bloc independence from the U.S. and China.

To help gain scale, the company has been adding to its business in the U.S. since expanding its presence there in 2017 through the acquisition of a former cloud offering of VMware Inc. In April, OVHcloud added so-called virtual private servers at its data center in Hillsboro, Ore. The infrastructure technology is targeted at developers, IT professionals and gamers.

Write to Ben Dummett at [email protected] and Sam Schechner at [email protected]

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Appeared in the September 20, 2021, print edition as ‘Cloud IPO Is Planned, Could Pass$4.7 Billion.’

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