France's OVH to triple spending to take on Google, Amazon in cloud computing

PARIS (Reuters) - French cloud computing company OVH plans to triple investment in the coming years to take on U.S. Internet giants Amazon and Alphabet’s Google in this fast-growing sector.

Slideshow ( 3 images )

The privately-held company will invest between 4-7 billion euros ($4.6-$8.1 billion) over its next five-year plan starting in 2021, founder and owner Octave Klaba, 43, told reporters on Wednesday.

This compares with its current 1.5 billion-euro investment plan running until 2020.

The company, based in the northern city of Roubaix near Belgium, is running 27 data centers in 19 countries worldwide, including the United States, and offers storage and web hosting services to companies and individual customers.

It portrays itself as a transparent and secure alternative to Google, Amazon and Microsoft, which dominate cloud computing. The sector is currently thriving on a greater need for IT infrastructure to drive new digital businesses, and now represents a major part of Amazon’s profits.

OVH does not disclose detailed financial information but says it has annual sales of about 500 million euros and positive earnings before interest, tax, depreciation and amortization (EBITDA).

It says it is growing at a rate of 20 percent a year and that future investments will aim at exploring possible expansions in other countries, including Russia and China.

Klaba, who favors jeans and T-shirts over formal suits, came to France from Poland in 1991 with his family after the fall of the Berlin Wall.

Eight years later, he created OVH with a 25,000 French francs loan - the equivalent of 3,800 euros.

The group is backed by U.S. investment firms KKR and TowerBrook Capital Partners, which bought a minority stake in OVH for 250 million euros in 2016.

Klaba hired Michel Paulin, a former top executive at France’s number two telecoms operator SFR, to become chief executive and steer the company to its next development stage.

He did not exclude an initial public offering down the road.

“All options will be on the table. Today, it’s not our focus,” he said. “We don’t need more money for the moment.”

The only option that is off the table is a sale of his family-owned company, he added.

($1 = 0.8689 euros)

Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by Sudip Kar-Gupta