Photo: Sergey Petrossov, Founder and CEO of JetSmarter.]]>
Photo: John and Patrick Collison, Co-Founders of Stripe. (Courtesy, Irish Times)]]>
Recode. The company’s annual sales reportedly grew from $50 million in 2013, to $170 million in 2014, and $300 million on 2015. The company was founded in 2011 by Alba, a native Californian, and her business partners—chief executive officer Brian Lee, chief operating officer Sean Kane, and her husband and chief product officer Christopher Gavigan, who is the former CEO of Healthy Child Healthy World (a national nonprofit empowering parents to protect their children from toxic risks). The move comes a few weeks after Fortune reported that, “Honest Company has come under fire over the past year as customers claimed products were either ineffective or contained ingredients that contradict their ‘organic’ and ‘natural’ labels.” In April, ABC News reported that the Honest Company is being sued for “representing its Premium Infant Formula as ‘organic’ even though this product contains 11 synthetic substances prohibited under federal law in organic products.” As a result, the actress, her co-founders, and their company and financial backers, are coming under mounting economic and reputational risk. The mission-driven company says it provides “100+ safe, effective, and delightful products across a wide range of consumer categories, including baby, personal care, home care, and vitamins & supplements, to a passionate community of consumers united by values and style.” Honest Beauty, the company’s latest product offering launched in September 2015, is a comprehensive skincare and makeup collection. Honest products are available across the U.S. and Canada via honest.com and honestbeauty.com and at more than 4,000 retail locations across North America, the company says. Whole Foods and Costco were its initial retail distributors, followed by Target, Buy Buy Baby and Nordstrom, among others. Earlier this year the company relocated its headquarters from Santa Monica to Playa Vista, in the Los Angeles Westside. WAVE OF BEAUTY AND PERSONAL CARE SECTOR EXITS The move would also follow a recent global wave of deals and consolidation in the beauty and personal care market. In July, L’Oréal SA (EPA: OR), the world’s leading beauty and cosmetics company, controlled by the family of Liliane Bettencourt, the wealthiest person in France and the wealthiest woman in the world, agreed to acquire IT Cosmetics, a top-selling prestige makeup and skincare brand in the United States, for $1.2 billion in cash. IT Cosmetics was founded in 2008 by Jamie Kern Lima and Paulo Lima, who stand to make a fortune through the sale. Prior to launching IT, she was a TV news anchor, while he worked in investment banking. They both earned MBA degrees from Columbia Business School. Private equity firm TSG Consumer Partners LLC acquired a minority stake from IT’s founders in September 2013. IT Cosmetics offers more than 300 high-performance beauty products focusing on color cosmetics, skincare, brushes and tools. IT works hand-in-hand with plastic surgeons to create innovative, high performance products laser-focused on solving women’s beauty problems. The company’s multi-channel distribution model includes television shopping channels QVC and TSC, specialty stores including ULTA and Sephora, and e-commerce. For the 12 months ending June 30, 2016, IT had net sales of $182 million, up by 56% from the previous year. A week earlier, Bain Capital Private Equity and Goldman Sachs (NYSE: GS) agreed to acquire a majority stake in Carver Korea, a leading K-beauty cosmetics company, for over $300 million. Likewise, consumer products giant Unilever (LSE: ULVR) agreed to acquire men’s personal grooming startup Dollar Shave Club (DSC), for $1 billion. A few days earlier in the summer, Tangle Teezer, a British manufacturer of detangling hairbrushes founded and owned by hair colorist Shaun Pulfrey, was said to have hired investment bank Robert W. Baird & Co. to shop the company for £200 million. In June, billionaire Ronald Perelman‘s Revlon Inc. (NYSE: REV) agreed to acquire Elizabeth Arden Inc. (NASDAQ: RDEN), a legendary global prestige beauty products company with a portfolio of beauty brands sold in over 120 countries, in a deal valued at $870 million. Two weeks earlier, Johnson & Johnson (NYSE: JNJ) agreed to acquire Vogue International LLC, a manufacturer and distributor of salon-heritage hair care and other personal care products, including OGX, FX, Proganix and Maui Moisture, from private equity firm Carlyle Group LP (NASDAQ: CG) and the company’s founder and CEO Todd Christopher, for $3.3 billion. The founder’s lucrative exit came to fruition despite the fact that in August 2013, Vogue paid $6.5 million to settle a false advertising class action accusing it of falsely labeling its Organix skin and hair care products as organic (Organix was subsequently rebranded as OGX), which is reminiscent of the consumer complaints and legal actions against the Honest Company. Around the same time, British private equity firm Lion Capital was said to have appointed Rothschild to oversee the sale of GHD (Good Hair Day), a supplier of hair products to celebrities such as Victoria Beckham and singer Katy Perry. The asking price is reportedly around £400 million. Also in early June, Japanese global cosmetics company Shiseido Co. Ltd. (TYO: 4911) agreed to acquire Gurwitch Products LLC, a Houston, Texas-based marketer of global prestige cosmetics and skincare brands including Laura Mercier and RéVive, from Alticor Inc., the owner of Amway. In May, private equity firm Clayton, Dubilier & Rice agreed to acquire High Ridge Brands Co., which owns a portfolio of personal care brands, from private equity firm Brynwood Partners, for $415 million. In April, Fosun International (HKSE: 0656), one of China’s largest investment firms chaired by billionaire Guo Guangchang, agreed to acquire Israeli cosmetics company Ahava Dead Sea Labs for $77 million. In February, Canadian cosmetics and skincare company Groupe Marcelle acquired Montreal-based Lise Watier Cosmétiques, through an $18 million investment by Caisse de dépôt et placement du Québec (CDPQ),becoming the largest Canadian company in the beauty industry. Photo: Jessica Alba and Christopher Gavigan at a family walk. (Courtesy: The Honest Company)]]>
Octave Klaba, OVH Co-Founder, Chairman and CTO.[/caption] KKR, founded in 1976 and headquartered in New York City, is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. As of December 31, 2015, the firm had $120 billion in assets under management. TowerBrook, headquartered in New York, and with offices in London and Munich, focuses on making investments in European and North American companies. The firm was founded in 2005 as a successor of Soros Private Equity, and is led by Neil Moszkowski and Ramez Sousou, TowerBrook founders and co-CEOs. They both previously served as co-heads of Soros Private Equity Partners and members of the management committee of Soros Fund Management LLC, and previously worked at Goldman Sachs & Co. This is a new step in the development of OVH, which hitherto favored debt to finance its operations. The new equity funding from KKR and Towerbrook will allow it to grow in the US.
“We’ve grown in leaps and bounds over our 16 years of existence. We now host more than 3,700,000 domain names and 220,000 servers for the 930,000+ users throughout the world who put their trust in us. We’re also proud to have one of the biggest datacenters in the world: our BHS datacenter in Canada that houses 350,000+ servers.” — OVH“The OVH group will remain a French company, and our head office is still in Roubaix,” said Klaba. “We are not changing the recipe which made us successful in the first place, but we do want to accelerate our growth.” To expand internationally, OVH announced the launch of an €800 million fundraising campaign, to allow the company to open 10 new datacenters throughout the world, besides its 16 existing datacenters. It has several sites in Europe, Singapore, Australia and North America. ASTOUNDING RISE OF A MODEST FAMILY BUSINESS TO THE GLOBAL CAPITAL MARKETS Since being founded in 1999 by Octave Klaba and his family while he was attending the Jesuit ICAM School of Engineering in Lille, France, OVH has become “an established partner for hundreds of thousands of professionals worldwide,” it says.
“We do not come from a wealthy family from generation to generation, but a family of miners from Northern France (Pas-de-Calais) who emigrated to Poland in 1947 and then returned to France, still poor in 1990.” — Octave KlabaIn 2001, OVH rented 7 racks from Paris hosting provider Claranet, then moved to a datacenter abandoned by Free, a French ISP. Shortly after, the server park reportedly grew to 1,200 machines. In 2002, OVH began renting another datacenter, also owned by Free, later purchasing the property, making it the first company-owned datacenter in Paris. In 2006, OVH opened its first subsidiaries in Poland, Senegal and Spain. The volume of activity grew exponentially from 6,000 to 12,000 servers. Between 2007 and 2009 OVH found a location in Roubaix, France, where it established its headquarters, and technology team, building Roubaix 1 (RBX-1), its very first datacenter, soon followed by RBX-2 and RBX-3. Meanwhile, the company’s datacenters reportedly multiplied abroad, in Tunisia, Morocco, the United-Kingdom, Ireland, Italy, Germany, Finland, Portugal, and the Netherlands, with a total of fifteen sites in Europe and two in North Africa. In 2010, WikiLeaks reportedly selected OVH as its web hosting provider following Amazon’s refusal to host it. The controversy prompted former French Minister of Industry Eric Besson to seek legal ways to block WikiLeaks’ web hosting in France, but his efforts failed. Since 2010, OVH is said to have invested €10 million in cloud computing services. In late 2010, OVH launched “Dedicated Cloud,” a new external cloud solution. The company is now able to deploy a virtual datacenter within an hour and to add resources as needed, it says. By 2011, OVH reportedly hosted 100,000 servers at its datacenters. The company built a 100% air conditioning-free datacenter (RBX-4), the first of its kind. A year later OVH built its first container-type datacenter in Strasbourg (SBG-1) to respond to the needs of its Eastern European clients. In January 2012, Henryk and Octave Klaba, along with Canadian institutional partners, the city of Beauharnois, the Center for Local Development (CLD) Beauharnois-Salaberry, and Montreal International, officially established OVH in the Beauharnois-Salaberry Regional County Municipality of southwestern Quebec, Canada. Located in a renovated aluminium plant formerly owned by Rio Tinto Alcan, the BHS datacenter opened in January 2013, south of Montreal. Within 6 months, OVH teams built two towers hosting 10,000 servers each. A third hosting space of the same capacity was built in 2014. Designed for the North-American market, as of 2015, OVH’s BHS datacenter has an overall capacity of 360,000 servers, and is powered by hydropower. In 2013, OVH reportedly had 700 employees and launched a datacenter with an overall capacity of 300,000 servers in Gravelines, northern France. It also launched a VDSL Internet connection, opened new offices in Brest (Bretagne), raised a $140 million syndicated loan to support its investments, and participated with Atos in the “Cloud Plan” initiated by the French government. 2013 also marked the year of the first OVH Summit, an annual event inspired by IT events in North America. In 2014, OVH celebrated its 15th anniversary, with 800 employees and hosted 180,000 servers in 17 datacenters. The same year, the company launched .ovh, a new generic top-level domain (gTLD). .ovh was the first new French gTLD to be opened to the general public and over 50,000 new domain names were registered within the first five days of a promotion campaign for the launch. New brands have since been launched by OVH, ‘So You Start,’ offering servers and dedicated infrastructure, and ‘RunAbove,’ a high performance public cloud solution, as well as its ‘Kimsufi’ and ‘hubiC’ brands, which also serve as labs where users can test new applications. In January 2015, as part of a strategy to become “a global reference for Digital as a Service,” the French company appointed Laurent Allard as its new CEO, while Octave Klaba became its chairman and CTO. “OVH is one of the most exciting entrepreneurial adventures around, and I’m particularly proud to have been chosen to take the company even further forward,” said Allard, who previously served as CTO at CGI Group, and CIO at Logica and AXA Technology Services. Significant investments in the development of its data centers and network infrastructure, the launch of offices in North America, and a sustained recruitment policy in France and the rest of Europe, have made it possible for the company to become well-known on the world market. COMPETITIVE LANDSCAPE: THE MARKET FOR DATA CENTERS AND INTERNET SERVICE PROVIDERS According to newly launched Australian market research firm CloudScene, which says it provides a comprehensive database of more than 4,700 datacenters and 4,200 service providers across 110 countries, OVH was ranked No. 105 among the world’s largest ISPs, with 28 PoPs (points of presence) and 11 datacenters. In comparison, the world’s No. 1 ISP, Cogent, has 536 PoPs, and 49 datacenters. Other giant service providers among the top 10, competing with upstart OVH, include Level 3, Verizon, Zayo, AT&T, CenturyLink, XO, euNetworks, and Comcast. [caption id="attachment_433619" align="aligncenter" width="1024"] CloudScene 2016 Top Global Internet Service Provider Rankings[/caption] CloudScene was launched this week by Australian technology entrepreneur, Bevan Slattery, founder of NextDC and Megapor, who said, the aim of CloudScene is to improve industry transparency and consolidate the currently fragmented cloud market. Digital Realty, Telstra, VentraIP, Megaport, Vocus Communications, Superloop, and NextDC are said to be among some of the service providers already actively using CloudScene. The market research firm says it invested in an “in-house product development team and Australian-based data analysts to undertake the research, analysis and verification work.” CloudScene COO Jason Bingham added that the primary goal of CloudScene is to deliver reliable and accurate data to market. Nevertheless, the accuracy of the data could not be independently verified. “The Asia-Pacific region is predicted to overtake North America as the largest generator of cloud traffic in the world, and Hong Kong and Singapore have become the established hubs for datacentres and international submarine cable capacity in the region,” said Bevan, according to ZDNet. 2016 ILLUSTRATES LONG-PREDICTED CONVERGENCE OF CLOUD AND HOSTING M&A activity in the European cloud, hosting and managed infrastructure space is accelerating with a number of deals currently in the works across the continent, reported TMT Finance. Several datacenter, cloud and hosting deals have recently been announced and a number of smaller ones are currently taking place. Next-generation convergence is the future of cloud and data center,according to Data Center Knowledge. “As cloud computing becomes the dominant form of IT, it exerts a greater and greater influence on the industry, from infrastructure and business strategy to design and location. Webscale giants like Google, Amazon, and Facebook have perfected the art and science of cloud data centers. The next wave is bringing the cloud data center to enterprise IT… or the other way around!” DCK says. According to Gartner, 2016 will be a defining year as private cloud begins to give way to hybrid cloud. As HostingCon Global 2016 wrapped up its event in New Orleans the last week of July, “there has been a noticeable shift in the hosting market, and HostingCon reflected those changes,” said Jeremy Snyder, a hosting and cloud computing industry expert. 2016 illustrates the long-predicted convergence of cloud and hosting, according to Snyder, a DivvyCloud blogger and frequent HostingCon speaker, as shown in the chart below. [caption id="attachment_433624" align="aligncenter" width="1024"] Web Hosting and Cloud Convergence, by Jeremy Snyder @ http://divvycloud.com/blog/[/caption] New Q2 data from Synergy Research Group shows that Amazon Web Services (AWS), Microsoft, IBM and Google combined control well over half of the worldwide cloud infrastructure service market. They also continue to grow more rapidly than their smaller competitors. In aggregate the big four grew their cloud infrastructure service revenues 68% in Q2, while the next 20 largest cloud providers grew by 41% and all other smaller providers grew by 27%. The market as a whole grew by 51%. Amazon remains in a league of its own, almost three times the size of its nearest competitor and with a clear lead in all major regions and most segments of the market. Meanwhile Microsoft and Google can point to substantially higher growth rates, while IBM continues to feature strongly thanks primarily to its leadership in the hosted private cloud segment. Second tier operators, including Salesforce, Rackspace, Oracle, NTT, Fujitsu, Alibaba and Hewlett Packard Enterprise, are either niche players, generalist IT service providers, or companies lacking the scale, focus and investment capabilities required to truly challenge the top four hyper-scale cloud providers, according to Synergy. Photo: (L-R) The Klaba family: Haline, Henry, Octave and Miroslaw, Co-Founders and Owners of OVH. ]]>
Apollo Global Management LLC (NYSE: APO) agreed to acquire San Antonio, Texas-based cloud computing company Rackspace (NYSE: RAX), for $4.3 billion. The Calm.io and Nutanix teams will work to bring an application-first approach to choosing, managing and consuming IT infrastructure – enabling customers to pick the right cloud for each application. “Together, Calm.io and Nutanix plan to bring together clouds, platforms and people, on an elegantly simple pane-of-glass,” says Nutanix. “We have shared a similar vision as Nutanix since day one – datacenter infrastructure must be fully automated, simple to deploy and easy-to-use,” said Aaditya Sood, Calm.io CEO and founder, “We are excited to join the Nutanix team to work together to eliminate the daunting complexity of legacy datacenters by taking a radical, application-centric view of IT infrastructure.” Nutanix and PernixData share an architectural design philosophy. The two companies will develop an advanced data stack to replace traditional storage silos and high-latency networks. The combined teams will also focus on reducing the inertia of application data that inhibits workload mobility across virtual and cloud environments. “With highly aligned cultures, ambition and talent, we are genuinely excited to join the Nutanix team,” said PernixData CEO and co-founder Poojan Kumar. “Today is a very special day in Nutanix’s history,” said Nutanix founder, CEO and chairman Dheeraj Pandey. “PernixData and Calm.io both have exceptional technology, solid engineering teams, and visionary leaders with the ‘Founder’s Mentality’; they have dreamt big and persevered against great odds to build phenomenal products. We are honored to welcome them into the Nutanix family, and build the next generation of innovative products and truly helping our customers realize the vision of the Enterprise Cloud.” The Nutanix enterprise cloud platform leverages web-scale engineering and consumer-grade design to natively converge compute, virtualization and storage into a resilient, software-defined solution with rich machine intelligence, it says. “Nutanix makes infrastructure invisible,” allowing IT to focus on applications and services that power their business. THE HYPER-CONVERGED AND HYPER-SCALE CLOUD INFRASTRUCTURE MARKET “Not long ago, Nutanix, Inc., the latest darling of Silicon Valley, seemed destined for IPO greatness,” wrote Investopedia contributor Justin Walton. “Impressive sales and a flood of private funding has the company riding high, but a slumping tech IPO market has put its plans to go public on hold. Meanwhile, competitors are working to join Nutanix in the hot hyper-converged computing market and undercut tech’s latest unicorn.” “The delays could not come at a worse time for Nutanix,” added Walton, “as Cisco Systems Inc. (NASDAQ: CSCO) is ramping up efforts to enter the hyper-converged market and not only compete with, but undercut, the company’s pricing.” Hewlett Packard Enterprise (NYSE: HPE) also recently said it will enter the fast-growing, but crowded market for hyperconverged systems, taking aim at Nutanix. “Later this month, we’ll announce a new, market-changing hyperconverged offering based on our Proliant virtualization server,” CEO Meg Whitman said. “Our new solution will offer customers installation in minutes, a consumer-inspired, simple, mobile-ready user experience, and automated IT operations — all at 20 percent lower cost than Nutanix.” New Q2 data from Synergy Research Group shows that Amazon Web Services (AWS), Microsoft, IBM and Google combined control well over half of the worldwide cloud infrastructure service market. They also continue to grow more rapidly than their smaller competitors. In aggregate the big four grew their cloud infrastructure service revenues 68% in Q2, while the next 20 largest cloud providers grew by 41% and all other smaller providers grew by 27%. The market as a whole grew by 51%. Amazon remains in a league of its own, almost three times the size of its nearest competitor and with a clear lead in all major regions and most segments of the market. Meanwhile Microsoft and Google can point to substantially higher growth rates, while IBM continues to feature strongly thanks primarily to its leadership in the hosted private cloud segment. The second tier of operators, including Salesforce, Rackspace, Oracle, NTT, Fujitsu, Alibaba and Hewlett Packard Enterprise, are either niche players, generalist IT service providers, or companies lacking the scale, focus and investment capabilities required to truly challenge the top four hyper-scale cloud providers, according to Synergy. Moreover, hyper-scale cloud providers led by AWS, Google and Microsoft have been cutting their enterprise cloud market prices on multiple occasions during the past few years, triggering a price war which smaller niche players such as Nutanix or rival VMWare, would be unable to sustain. “In a variety of ways Amazon and the other big three players have distanced themselves from the competition in this market and continue to widen the gap,” said John Dinsdale, chief analyst and research director at Synergy Research Group. “What marks them out as different is their global presence, marketing muscle, ability to fund huge investments in hyperscale data centers and, in most cases, a determination to succeed in the market. The ranking of the next 20 largest cloud providers features some interesting companies, with Alibaba and Oracle growing particularly strongly, but they are all starting from a long way behind Google, which is itself growing by well over 100% per year and yet remains only a sixth the size of Amazon.”]]>