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Comment by albertgoeswoof | Hacker News Reader

I run a European cloud service, 80% of our customers are basically looking for a European alternative to the big clouds. The market is huge and in my opinion underserved.

What makes it very exciting is that there not too much innovation required to compete

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I use Hetzner cloud not because it's European, but because it's great.

Also because it's cheap.

That's a bonus!

Same for me with OVH and Scaleway.

Way cheaper than AWS and friends, and they just work.

I'm using OVH and the notion of it "just working" is all relative. It's tolerable, but certainly a bit buggy, and with far less services than aws and co. It is also cheap, but given the limitations I doubt they can increase the prices much...

Missing object storage kinda makes it a joke. Hetzner cloud is certainly useful for some things, but object storage is something I just assume any cloud would have in 2024.

AWS launched it before EC2 even it's that valuable.

Out of curiosity are you operating at a scale where "MinIO on a Hetzner node" isn't a viable replacement? I totally believe that's possible, just curious about the use case.

Are you serious? Self-managed MinIO on a bunch of drives vs fully managed operation-less S3. Comparing apples to oranges. And the license, AGPLv3 is a non-starter for virtually any business serious about their intellectual property.

If you thought "I had to publish any code changes I make to my object storage server" was bad, wait until you find out that you're not even allowed to make code changes to S3 servers!

Obviously the fully-managed nature of S3 is very valuable compared to MinIO but the licensing issues seem neither here or there. Or is there some extra part of the AGPLv3 that I'm not aware of?

> AGPLv3 is a non-starter for virtually any business serious about their intellectual property.

What do you mean? Can you describe a scenario where this MinIO license matters?

I'm confusing things myself. One's okay as long as one doesn't modify the code.

I’d argue that the smaller you are, the more sense S3 makes, since its costs scales down to zero and offer a high degree of reliability from the first file stored.

Rolling your own storage comes with at least some operational expenses, if you’re counting your data/egress in gigabytes that’s likely not worth it compared to just using S3 or similar services.

S3 is so expensive at scale that it only makes sense if you're tiny or if you have extreme durability requirements and your working set is tiny.

The durability can have value at scale, because ensuring it at scale with MinIO can be a lot work. But I often recommend to clients that they deploy a Hetzner setup as a cache, often with storage all the way up covering 100% of their data depending on access partner, because the AWS egress fees are so insanely extortionate that you never really want to read data from AWS at scale other than as an emergency option.

I just use R2. Who says that if I use one company, they have to provide every single service under the sun to be useful?

Linode is quite cheap and comes with Object storage so you don't have to maintain a MinIO

Yeah, that - and also managed Kubernetes. Hetzner could seize a lot of potentially lucrative opportunities, but for some reason they choose not to and pretty much stagnate in their offerings. I have been asking the support about both K8s and object storage since close to five years now, but no.

I also used to use Hetzner and I got the feeling they were capitalised to the extent their backers understood the DC/asset model and under-capitalised to software which was too intangible to invest in.

K8s probably means more s/w than hardware, more bodies (for them) more helpdesk and more documentation, more process. More up-front cost. And, they seem to be making money without it. Maybe thats their position?

Their position is that k8s is the wrong layer of abstraction. They might be right, for their business model. Or it might be a case of intentional blindness.

It is cheap, good it is not.

You can complain about AWS and GCP support as much as you want, but given their sheer volume it is an accomplishment how rarely you actually need it. The situation when you need it is of course a different thing and I understand that satisfaction there greatly varies. Their support might be hit or miss, but at least their processes are streamlined and tried and tested enough to have you rarely need it.

With Hetzner on the other hand, if you use them seriously you will run into a situation where you need support sooner than later and my experience with that always has been abysmal.

Do you have some examples?

I do. My favourite is the one where a scraper hosted their version of Stackoverflow on Hetzner servers. For some reason they only copied the textual content but replaced all user profile pictures with random profiles pictures from elsewhere - mostly harmless ones. I had the misfortune that mine was replaced by a pornographic one, which appeared as the first result in Google when someone searched my name.

Hetzner did nothing to help rectify the situation. Thanks for nothing Hetzner.

What I find great about the Hetzner Cloud is that you don't need a dictionary to understand which product does a specific job. With AWS, I found it much harder to take the first steps because of the names being used.

I find AWS quite OK (Stockholm syndrome?), but Cloudflare dashboard confuses me every time. Their navigation is just not logical to me.

I like to think UpCloud (also EU-based) is in the same boat, servers are servers and databases are databases. No weird lingo or product names, at least when you get to actually using it all in the Hub (hub.upcloud.com)

You're absolutely right: a huge, underserved market exists. Are you hiring? I'd love to work on a European big cloud alternative..!

Do you compete in some kind of a niche? There is OVH in EU.

And Scaleway (Online.net/Iliad). And Hetzner.

and OTC (Open Telecom Cloud)

But I wouldn't say it's a niche if you look at the size of the EU even if it "hasn't being doing that well" it's still a lot of purchasing power

And especially in recent years there has been an increasing push away from US cloud providers and this somewhat evening out the playing field of "newcomers" compared to Amazone, MS, Google.

Also because HN is quite US/SV focused and differences in business culture especially compared to SV about e.g. businesses doing blog post and similar you don't really see much at all from this marked on HN. But that doesn't mean it's not a big marked.

The Open Telekom Cloud was at least in the beginning running on Huawei hardware and software.

Here is a press release from 2020: https://www.open-telekom-cloud.com/de/blog/vorteile/die-sich...

Title: Open Telekom Cloud – die sichere Cloud made in Europe

> Im Rahmen der Innovationspartnerschaft liefert Huawei mit dem Cloud-Betriebssystem Huawei OpenStack Distribution eine zentrale Softwarekomponente der Open Telekom Cloud.

English translation: Title: Open Telekom Cloud – the secure cloud made in Europe.

> As part of the innovation partnership, Huawei provides a central software component of the Open Telekom Cloud with its cloud operating system, Huawei OpenStack Distribution.

I know but AFIK they have moved await from it.

Software wise they where anyway OpenStack based, which is a trusteable open source project Huawei is a major contributor to but other major contributors include AT&T, Canonical, Hewlett-Packard Enterprise, Intel, Red Hat, IBM. This made moving away from Huawei quite viable.

Hardware wise they also moved away from Huawei, but I'm not sure if this apply to all data-centers of them. But AFIK at least some data centers are Huawei free.

Or at least that is what they told some of their business partners which wouldn't have used them if they still used Huawei hardware in the data center that specific bussiness partner uses AFIK.

The European market has always seemed like a tertiary market compared to the US and Asia. I think that's because, despite having some raw number of euros to spend on a product, the European economy has struggled since 2008 compared to the US and Asia, and huge corps which are obsessed with growth don't see an accelerating future for Europe as a customer base.

Europeans are mostly comfortable giving money to American companies, and there is not as much of a culture difference as with Asia, so there is no need for separate offerings specially for Europe. All big tech companies have several subsidiaries that seem to be doing quite well. It’s true that there are not as many European startups than American ones, but the market is there.

Which creates some juicy margin niches for smart developers to make a killing as independent contractors.

even if it has struggled it still is a lot of purchasing power

and cloud is an essential service for many companies

and how things played out in recent years has created increasing insensitive to not use Amazone/Google/MS Cloud

but it's marked which isn't really that visible on HN and similar US focused sites

Is “Asia” a well-defined market? Honestly curious.

No, you're right

>European market has always seemed like a tertiary market compared to the US and Asia

Well, this isn't even remotely accurate on the numbers. For virtually every big tech company the US is about half of the market, Europe about 30%, then ~15% Asian Pacific, and give or take a bit in the rest of the world.

Given that most large tech companies are locked out of China or quickly leaving the only large country with comparable purchasing power to Europe in Asia is Japan.

It's about revenue growth opportunities, not current market share. Europe in general is largely stagnant, and seems likely to trend down due to the demographic time bomb.

In Asia, South Korea is already comparable to Japan as a technology market (but also stagnating). The big Asia-Pacific growth opportunities are going to be in India, Malaysia, and Philippines.

Africa will soon emerge as an important market as well, particularly Nigeria. Japan and Korea are, as you said, not only stagnating but deflating (in the case of Japan). I believe GDP actually declined in Europe recently so I think Europe will shrink as a market in the coming decades unless they can fix demographic pressures and improve entrepreneurship. The US faces similar demographic problems but we have unique solutions to those problems that means that GDP growth is stronger in the US than virtually anywhere else in the world. India is a more mature "growing economy", and at this point I think the whole world is aware of the opportunities there. As you pointed out, Malaysia and the Philippines are growing, and so are other SE asian countries like Viet Nam and Thailand (though Thailand has struggled to grow since the pandemic, it's shown good growth since 2000).

Africa is the untapped market right now; Nigeria is expected to exceed 400mil (if not 500-700mil) people by 2050. I don't know as much about their economy, so I'm not sure if this growth has translated into the kind of infrastructure which would create more demand for computing services (i.e: I don't know what smartphone or 5G penetration is like there), but I would bet that if it's not ripe yet, it will be soon

Europe needs to solve its demographic pressures by either accepting more non-EU immigrants or doing something to encourage women to have more children, which would require solving for the opportunity cost (i.e: career stagnating or ending) that women bear 90+% of the time they have children, as well as the FOMO issues (which I don't think government can solve)

It's always humorous to see HN users praising the lifestyle of dense, walkable European cities. They don't realize how miserable it is to raise multiple children in the typical 2 bedroom / 1 bath flat that most locals can afford. It's not surprising that many couples have only one child.

Historically, homes in the US were very small, far smaller than what you see today. Americans have a huge misconception about this, because the historic homes they see today are the ones that survived, and the ones that rich people lived in 100+ years ago. The homes that regular people lived in have all been torn down, because they were small and unremarkable. But you can see some of this if you visit neighborhoods built in the 1950s: the houses there are much smaller than newer nearby homes.

However, despite a trend towards much larger homes in the US over the last 50+ years, Americans (at least the ones who can afford nicer homes) have been having far fewer children. So apparently Americans preferred having lots of kids back when they lived in homes with less than ~900 square feet.

As for Europe, Europeans have been living in dense, walkable areas with small homes for millennia, and didn't have any trouble raising lots of kids in that environment all that time.

Yes, people's expectations around living space and privacy have inflated. What's your point? It's not as if Americans or Europeans are suddenly going to go back to tolerating having a bunch of kids in a cramped urban flat. And it was never "preferred". They mostly only ever did that in the first place due to religion and lack of birth control.

My point is that small living spaces aren't the reason Europeans aren't having kids. Middle-class Americans aren't having kids either, even though they live in suburbs with oversized houses that they're spending all their income on.

"All their income" is very funny to hear when a small house in Prague costs 2 million dollars - now check what's the average income there.

The number of children per family is absolutely higher in suburbs than in dense cities. So your point is at least partly wrong, although there are likely other causative factors as well.

Europeans didn't raise lots of kids in areas of dense small homes, that was happening outside the cities.

They certainly did have kids in cities: you think people living in European cities in the 1700s or 1800s somehow all managed to stay childfree? They didn't have birth control back then, nor did they have transportation allowing them to commute.

They had much less children than the people outside cities, and the absolute majority of people was not living in cities then. Many of those working in cities had their families outside the city.

I believe this impression is mainly because people think of France and Germany as separate countries, not as a combined EU market.

Imagine if you'd compare only California against all of China, it would look like the US was in seriously bad shape.

> there not too much innovation required to compete

Yeah, sure.

This is the kind of mentality which lead us to "Cloud" being developed by an online book seller and not hosting companies. Then those hosting companies needed 10 years for open source solutions to be available to close some of the gap. Next time a random company disrupts the hosting market, it won't come from hosting companies because "there not too much innovation required to compete" and those companies will wonder what is going on.

Open Telekom Cloud has at least a great part of the functionality you expect when talking about a cloud provider: VMs (even GPU ones), VPCs, managed databases, block storage, Logging, IAM, API Gateway, Container Engine etc. https://www.open-telekom-cloud.com/

Open Telekom Cloud was at least in 2020 running fully on Huawei Software and hardware: https://www.open-telekom-cloud.com/de/blog/vorteile/die-sich...

Deutsche Telekom used Huaweis OpenStack implementation.

I haven't found any information that this changed, so I assume it is still running completely on Huawei. At least they made sure that they still get chips from the US despite sanctions. ;-)

Telcos fell in love with OpenStack some years ago and went all in. Biggest problem with OpenStack was you needed a lot of hardware to learn how to use it and the talent pool was quite small.

I doubt anyone who was ever customer of their detail telecom services would free-willingly use any services from Telekom ever again.

agreed.

That's only on paper though. I know a couple of people who founded a startup in the medicine sector on Telekom Cloud and most of their backend engineering work in the first years(!) went into circumventing Telekom Cloud issues like slow API, servers not starting or plainly disappearing.

Haven't talked to the guys for two years, so it might have improved in the meantime, but it's Telekom, so I heavily doubt it.

We are using that for one of our customers that insisted on using it. It works but it's expensive and a lot of their managed solutions are a bit outdated. Last time I checked they still offered Elasticsearch on a version pre licensing change that is definitely no longer supported. Their support and documentation are a bit of a mess as well. I got stuck a few times on things that just weren't working where you had to do some non intuitive thing to get things going again. My strategy with them is to keep things simple and not let them manage anything I care about. So, I run my own Elasticsearch cluster there.

Basically it's just Openstack with some customizations. The rest of our customers run on gcloud. I'm currently eyeing Hetzner as I want to lower our hosting cost.

But the point of Openstack is that it's generally fine and that the feature set it offers is a commodity. AWS definitely overcharges for this stuff. If you do the math, most of their vms will cost you the hardware it runs on within months typically. Amazon runs this hardware for many years. In some cases they host multiple vms on them. Their margin on this stuff is huge. That's why they are so rich. You pay for the convenience and the uptime of course. But undercutting their pricing profitably isn't that hard.

From Italy there is Aruba (www.cloud.it). Not bad. But quality/price ratio worst than Hetzener I think

What are the other 20% with you for?

What is the benefit that your customers see in using an European cloud?

As far as I know, the companies / service providers would love to be able tell their customers that 100% of their data is only stored and processed in the EU. It makes everything GDPR-related simpler for companies, and could be turned into a good advertisement for consumers.

I'm guessing so they can keep data of EU customers stored within the EU.

You can do that with AWS regions though.

The US government can still get at that data, because Amazon is still an American company. It doesn’t matter where the data actually lives.

The US government can (and for many years did) tap the phone calls of the German chancellor; I don't think getting to data held by European cloud providers is really a big challenge for them.

Regarding the tech aspect? no. But legally it's always has been challenging. And that's where the difference lies

Unrelated, I think this also happens the other way around.

Meaning this is about EVERY manager being able to say "this is not my fault", not about any actual result? Literally every last one?

Sounds about right ...

There's published proof the US government actively will go to the extent of having submarines go to undersea fiber cables to tap into them. They have private lockers in almost all the datacenters in the world, etc. Doesn't matter if it's an American company or not.

There are potholes and drunk drivers on road. It does not matter if you use seatbelt or not.

Yes it does matter is the company is subject to US law or not. There is not 100% security but saying “it does not matter” is manichean and does not reflect reality. Yes the US have a very long arm but it’s all a cost/benefit even for three letter agencies.

Every time they make use of a zero day or a backdoor they run the risk of it being discovered. The harder it is to get a new one, the more they will think twice about using it for mass and low stakes surveillance. A non-US company will be less inclined/forced to cooperate with them, making it harder for them to siphon data out, hence lowering probability.

No one is 100% safe, agreed though. Probabilities and threat models is all we got.

The main benefit of using a 100% European cloud is to be 100% GDPR compliant. No matter how you slice it and how lawyers/companies try to wiggle around it, it's not possible to host data with a US company and be GDPR compliant, because of US laws.

Customers do ask about it, and it's always iffy to have to justify your GDPR compliance when using US cloud companies.

Which is why the big cloud providers have European data centers that comply with all relevant European laws where many big European companies, including some banks, medical companies, etc. choose to host their stuff. You know, the type of companies that would actually care a lot about such things and let their lawyers make sure they are doing all the right things.

AWS actually joined Gaia-x years ago. I think MS and Google did as well. They want to be compliant. Keeping their European customers happy is important to them. They use European legal entities as well to do business here. Because that is indeed required. No need to switch cloud provider. Just make sure you use them correctly and do all the right things. Which in any case is 100% your responsibility as you will be on the spot if you get that wrong. This job doesn't change if you switch cloud provider.

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