Apocalypse Files - Issue #4 - OVHcloud
Apocalypse Files - Issue #4 - OVHcloud
In each issue (bi-monthly), we'll explore the threats to the current business model of a company or of an entire industry, the forces that could take them down or drive systemic changes, and most importantly we'll imagine possible solutions, looking at new and evolving trends, untapped niches, new business models or venture opportunities...
In this fourth edition, we circle back to the recent episodes around the datacenters European giant, OVHcloud. Welcome to the Apocalypse Files.
Wake up in the sky
In July 2021, a record-high 4.80 billion people had access to the Internet. While more than 92% accessed the internet using mobile devices, only a few of us could tell exactly how it works and why a webpage doesn't load once in a while. For many of us, the Internet is seamless.
In fact, the Internet wouldn't work without brick-and-mortar facilities everywhere in the world. To make it simple : when you type a URL, your browser sends a query to servers (traveling through optic fiber cables), which return the website you asked for in a coded version (your browser reads it and converts it to the cute cat video you clicked on).
With the billions of gigabytes of data available on the Internet, you can imagine how many servers you need to host it all. That's why companies such as OVHcloud emerged a few decades ago.
OVHcloud started as a server hosting company and pivoted recently towards cloud computing. It owns and builds storage warehouses where computers and 400 000 servers are running the websites and storing the data of its customers.
Cloud computing is what makes it possible to collaborate in real-time on documents and presentations with your coworkers. By allowing you to seamlessly reach and navigate all your files through different devices (smartphone, tablet and laptop), it also ushered in a new attitude towards the ownership of digital devices, which is best expressed by the advent of new business models (eg. device leasing).
Drip too hard
Last March, only two days after announcing its filings to go public (acknowledging its strong growth and development expectations), a fire completely destroyed an OVHcloud datacenter in Strasbourg, France and slightly damaged a neighbouring one. A week later, another fire started due to overheating batteries. Both times, several hundred thousand websites couldn't be reached, reminding everyone how physical the wireless world actually is. On October 13th, this time only two days before going public, OVHcloud was struck by disaster again : a major breakdown switched off many websites for a few hours, due to a "human error" (who unplugged the Wifi?!).
Murder on my mind
The events that made this giant server host stumble this year are only the tip of the iceberg. OVHcloud's main business is threatened from all directions.
Today, datacenters account for 17% of all the CO2 emitted by the technological sector (about the same share as industrial flight). Data storage activities could grow to reach as much as 14% of global emissions. As people's environmental concerns over CO2 emissions grow, datacenters will undoubtedly come out of the shadow of technology and be targeted by direct or indirect laws and public demands. By 2040, different actors will try to put pressure on datacenter companies to reduce their environmental impact.
Datacenters are key to the traditional vision of the Internet. However, advocates of a more decentralized Web are gaining ground, following the advent of blockchain, cryptocurrencies and the decentralization they brought to several services in banking, social relations... The IPFS (InterPlanetary File System) P2P protocol is one way to decentralize data storage on the Internet. In short, IPFS leverages the empty space and unused computing power on the devices of every user of the protocol: when you store data on IPFS, you actually store it on someone else's empty storage (obviously everything is encrypted so people can't access your data). It is a young technology on the rise, but it could be a serious alternative to datacenters if generalized to the public : Brave Browser, a Google Chrome alternative enhancing privacy and reducing tracking, enables people use IPFS on their browser to access websites and get content in a more decentralized way.
Such a further way into digitalization complexity isn't the only threat to OVHcloud's business model. The growth of data transfer is outstripping advances in energy efficiency, resulting in more and more energy consumption. “Heavier” sites not only increase the energy consumption on the network infrastructure, but they also shorten the lifespan of the device used, as heavier sites require more powerful computers to access. Some users have emerged on trying to reduce their impact on the Web by, among other things, bypassing the FAAMG. For example, many tools offer more frugal alternatives to Google Workspace : ProtonMail serves as an email platform with very limited space, forcing people to erase their useless emails. Opensource cloud computing and collaborative office tools providers, such as Frama and Cryptpad, have the idea of "file with expiry date" deeply engrained in the UX of their tools. On the hardware side, there are plenty of tutorials to create your own local server hosted on a Raspberry Pi, these nano-computers made for IT builders.
So what to do to face these threats ? Should OVHcloud stay in its line and do business as usual? Obviously not, mostly when you decide to go public. We have outlined here some ideas to step up OVHcloud's game and protect it from being outrunned by the trends we mentioned.
High Hopes
OVHcloud didn't wait for our newsletter to start on tackling their environmental impact. It committed in particular to use 100% of renewables in its energy mix by 2025 and to increase the share of reused materials in its datacenters (currently at 20.9%). While being necessary to reach carbon neutrality, there is even more to do in order to impact the value chain. An upstream positive impact would be to reduce the useless data created everyday by websites with frugal websites. A downstream positive impact is to be found in aquaponics. Never heard of it ? It is a food production system that couples aquaculture (raising fish in tanks) with hydroponics (cultivating plants in water), in which the water full of waste produced by the fishes is fed to the plants, acting as a natural filter and "nutrient recharge". A French company, Theia Energy, focuses on installing such aquaponics farms close to datacenters, so that the heat they usually reject is used to warm the greenhouse of the farm and help plants grow. Combining renewables, reuse of materials and sending the heat generated by datacenters to a good and efficient way of producing food could help tackle some of the issues raised by the carbon emissions of datacenters.
In order to tackle the public demand for a more decentralized Web and a better defence against data breaches and cyberattacks, OVHcloud could turn into a decentralized web maker by selling toolboxes and maintenance services to help people launch their own local Web or to join a decentralized server. One way for the cloud giant would be to leverage OVHcloud's knowledge about data management and create a software that democratizes IPFS for everyone. For example, OVHcloud could launch an easy-to-use IPFS system designed for companies that keep their computers and servers on 24/7. Those companies could rent the sleeping computing power and empty storage during the nights, creating benefits from people who don't switch off their computers at night. Another way to face the IPFS threat would be to participate in blockchain node-running computation by lending computer power to a network. Many blockchain networks function by "renting" computer power from entities that get rewarded with tokens (cryptocurrencies) for their participation in ensuring that the network is fair and safe, and that the information is accurate in the block. (For more information on how blockchain works, please reach out to us or go and watch this).
One last idea for OVHcloud would be to answer the demand on niche markets, such as graphic rendering or cloud gaming needs. Some companies thrive in renting computer power for graphic artists who need power to process the renderings of their works, or by renting power for gamers who want to play their games with the best quality graphics.
Thank U, Next
We've made the point that being online is to watch data accumulate in real time, all stacked in layers and stored neatly in a server farm somewhere until that particular service collapses under the weight, subjecting users to a panicked flurry of attempted archival activity before all records disappear into screenshots and fuzzy memories. Or maybe we're being overly dramatic. Eitherway, the solution to a more sustainable, safer Web doesn't exclusively lie in renewable energy and reusable materials, but also in protocols, models and services that promote new data usages.
That's all folks!
PS: If you haven't guessed, all paragraph titles are from singles in the 2019 Billboard Hot 100, the year OVH was renamed OVHcloud.
Agree? Disagree? Anything to add?
Have an industry or company in mind you want us to look at? Let us know and we'll add it to our roaster: it might be the focus of our next issue!