Jake Madders, CEO at Hyve Managed Hosting, tells ITPro the initial inspiration behind launching the firm was to become “the Rolls-Royce” of the cloud hosting industry – and it certainly appears to be kicking things up a gear.
In recent years the Brighton-headquartered company has expanded rapidly, having opened an office in Berlin and recently moving into the US market with the launch of a new base of operations in Austin.
It’s by no means a new kid on the block, but Hyve operates in an increasingly cramped and competitive market in which it’s forced to contend with gargantuan public cloud hyperscalers and alternative providers such as Rackspace, which Madders notes has long been a key competitor.
But the company is holding its own. Hyve’s revenue has grown by 51% over the past three years, and since opening its Austin office has doubled its customer base in the US. While Madders admits this is still a small number, there are positive signs that the company is expanding in this market.
Growth also continues to accelerate, and the company recently projected global operational growth of 50% year-on-year for the next three years – both in terms of customers and turnover.
With fingers in pies on both sides of the Atlantic and an established base in the UK, Madders tells ITPro that the major focus right now and for the foreseeable future will be tapping into the lucrative US market.
“America has a handful of customers,” he says. “We’ve got a good few, but it’s growing fast. But what we’re finding is that the average US deal size is like having 10 British customers.”
“There's significantly bigger opportunities out there. We’re probably going to get similar revenues with half or a third of customers by the time we’ve actually reached that threshold,” Madders adds.
A big talking point with customers at present is data sovereignty, Madders tells ITPro – especially for those with operations on both sides of the pond. A host of major cloud providers have unveiled their own sovereign cloud offerings to ensure compliance with stringent EU regulations in recent months.
Rackspace, a key competitor for Hyve, also unveiled its own UK-focused sovereign cloud service aimed at public sector customers and others operating in regulated industries.
Hyve is also expanding in this regard, Madders says, and has made significant inroads so far, with nearly three dozen dedicated sites now operational.
“Data sovereignty is a massive part of our portfolio; it's one of the reasons we have 35 sites globally,” he says.
“Many of our clients, for instance in Switzerland, require their data to stay within their borders so we have a number of sites in-region. We also have customers in the US, for example, who have to have data in the UK for clients they’re serving here.”
Hybrid and multi-cloud appetite is driving interest
A key factor in Hyve’s recent growth, Madders says, is the seemingly insatiable appetite for hybrid and multi-cloud services. Both these practices have surged in popularity in recent years.
While the public cloud has dominated the industry for years, a confluence of issues is driving interest in these domains – most notably generative AI, cloud costs, and data sovereignty.
“There are huge advantages to having dedicated physical kit with generative AI, because they often require very bespoke compute nodes that require crazy processing power,” he says.
“Public cloud, it’s just cost prohibitive. It just doesn't make sense. When it’s just a case of huge volumes of data, it may be better in a public cloud, but then it’s a case of processing that data and moving it back into a private environment.”
This is an issue Madders says some Hyve customers have highlighted frequently since the onset of the generative AI ‘boom’, and one it’s been forced to adapt to as customers ramp up adoption rates.
These comments align closely with a number of claims from industry leaders on this front over the last year. For example, NetApp CEO George Kurian, described hybrid cloud as the “only way to capitalize on generative AI” in conversation with ITPro while at NetApp Insight 2023.
Hybrid and multi-cloud adoption rates are rising, but many firms find themselves stumbling when making the plunge. Add long-running concerns about rising cloud costs into the equation, and there’s not much room for risk from an IT leaders’ perspective.
It’s here that the company has the potential to ease the load on enterprises seeking alternative cloud strategies, Madders explains. Madders and Hyve see themselves as a knight in shining armor, so to speak. The firm does a lot of “hand holding” and consultancy with customers.
“We have customers who are using AWS or Azure for a huge part of their infrastructure and their bills have gone crazy as they’ve grown with that,” he explains.
“Actually what they need to do is just bring that into a private cloud environment with dedicated hardware and they can save themselves often 50% of their monthly costs and have people there to support them rather than being dependent on either a third party or their own teams.
“There’s a big trend, I think, towards bringing stuff out of the public cloud for a cost-saving drive.”
Madders isn’t the only industry leader to have picked up on this trend over the last year or so. With cloud costs rising significantly in 2023, the topic of ‘cloud repatriation’ was thrust into the spotlight as enterprises contended with skyrocketing bills.
In September 2023, 37 Signals CTO David Heinemeier Hansson revealed the company had saved more than $1 million in cloud costs in a matter of months after embarking on a cloud repatriation project.
Predictions of a widespread cloud repatriation wave haven’t quite materialized, however, with many firms opting for the flexibility of a combined approach.
US expansion gathers pace
Looking ahead, Madders says the big US focus will continue. However, this has presented challenges so far.
Finding talent has been difficult, he says. Finding talent that fits with the company culture has been equally hard. But it’s not fazed them thus far.
“It’s quite a challenging one. It’s difficult to run a business remotely. It’s been quite an interesting journey. We picked Austin partly because of the time zone - there’s enough overlap to be working together for a good few hours,” he says.
“Whereas we were originally on the west coast, and that was a real struggle because we’re going to bed and they’re just starting. We’ve put a lot of budget into Austin for recruitment.”
