skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view


VMware has announced that OVH intends to acquire the VMware vCloud Air business. VMware will transition its US and European data centers to OVH, which already operates 26 data centers on four continents and has its own dark fiber network. OVH will operate the service as vCloud Air Powered by OVH.

OVH's acquisition of the vCloud Air business makes sense but takes the shine off VMware's third-party cloud partners

The acquisition of VMware's vCloud Air business by the French-headquartered cloud and web-hosting provider OVH makes sense for both parties. VMware's attempt at a public cloud wasn't going anywhere – it was too little, too late for a market that had already left much bigger players than VMware in the dust. Besides, VMware made its public cloud intentions clear back in 2016, when it signed agreements first with IBM then with Amazon Web Services to host the vSphere cloud stack on their much larger and more successful public clouds. VMware can now reassign its public cloud investments to enhance its high-margin hybrid cloud software products, rather than capital-intensive, lower-margin public cloud services. Privately owned OVH had estimated revenues of €320m ($338m) in FY16, but according to Ovum estimates, 90% came from its core web hosting business.

VMware will transition its vCloud Air US and European data centers, customer operations, and customer support teams to OVH. OVH will benefit from an expansion of its footprint and client base, as well as the opportunity to cement its partnership with VMware. The brand association with VMware has market clout, and OVH will leverage VMware's vCloud Air go-to-market strategy, which focuses on three use cases: data center extension, data center consolidation, and data center recovery. This will appeal to many VMware customers who want a locally hosted extension to their existing on-premise VMware deployments; who want a centralized, locally hosted replacement for existing on-premise data centers; or who are looking for an off-premise disaster recovery location for VMware deployments. The fact that OVH is a European-headquartered cloud host will especially appeal to European customers wary of the data sovereignty and privacy issues associated with US hosts.

What does it mean for competitors? vCloud Air was never a threat to cloud giants AWS, Azure, and Google, nor will vCloud Air Powered by OVH be a threat to them. The cloud service providers this affects the most will be managed service providers and telcos, many of which have built hosted private clouds on the vSphere stack. OVH already has 26 data centers globally, with a heavy concentration in Europe.

OVH's position as the inheritor of VMware's cloud business will impact two categories of competitor in particular: existing vCloud Air partners such as iland, Claranet, CenturyLink, and Navisite; and SIs such as Atos Canopy, CGI, and DXC Technology (the merged HPE Enterprise Services and CSC) that built vSphere private clouds for enterprise customers. However, all are adopting a multicloud focus, as exemplified by Atos, which established its Canopy cloud in an alliance with EMC and VMware, but which is now turning its attention to Azure and AWS.


Further reading

The Outlook for Enterprise Cloud Services in 2017, TE0005-000893 (February 2017)

2017 Trends to Watch: Cloud Computing, IT0022-000779 (November 2016)


Ian Brown, Senior Analyst, Network and Cloud Services

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team: +44 7771 980316

Asia-Pacific team: +61 (0)3 960 16700

US team: +1 212-652-5335

Email us at

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Email us at

Contact marketing -

Already an Ovum client? Login to the Knowledge Center now