Google Teams Up With European Cloud Rival in Battle With AWS

Helene Fouquet (Bloomberg) -- Google struck a deal for France’s OVH to resell the tech giant’s cloud software and services to customers who are wary of sharing sensitive data with a U.S. company.

It’s the latest response to a shifting legal situation on data privacy that’s left European businesses and governments uncertain over the risks around storing their internal and client information on U.S. servers.

Those concerns have grown since the European Union’s top court struck down an information-transfer pact known as the EU-U.S. Privacy Shield in July.

From next year, Google’s customers will be able to access its cloud services over Roubaix-based OVH’s physical infrastructure, with a guarantee on where their data is stored, according to a statement on Tuesday. The companies didn’t disclose financial details of the revenue-sharing partnership.

The deal could give Google a stronger foothold in a European market dominated by U.S. rivals Amazon.com Inc. and Microsoft Corp., as parent company Alphabet Inc. pours money into cloud computing to find new sources of growth beyond search advertising.

Google said the agreement is the first of its kind in Europe, in which a cloud partner serves as the data host. OVH was founded in 1999 by Octave Klaba, whose family owns 80% of the company, with the rest owned by private equity firms KKR & Co. and TowerBrook Capital Partners.

Related:How Google Cloud Plans to Win Enterprises from AWS and Azure

The OVH partnership will use Google’s open-source Anthos technology, which allows one cloud provider’s clients to bolt on the services of another, reducing reliance on a single provider.

Google Cloud’s sales surged by 45% to $3.4 billion in the third quarter and Alphabet plans to start breaking out the unit’s operating profits from its fourth-quarter report. The company has never disclosed the profitability of the cloud business.