Article in partnership with GigaCloud
HOW DOES A CLOUD OPERATOR ENSURE MIGRATION OF UKRAINIAN COMPANIES TO TECHNOLOGY SERVICES
GigaCloud's CEO – about five years on the market
"THERE ARE NO POOR OR RICH CUSTOMERS FOR US"
GigaCloud's CEO Artem Kokhanevych told Mind how the company has become a universal operator over five years, how it influences the cloud market of Ukraine, what customer happiness is and why the b2b model loses to the h2h one.
Artem Kokhanevych, a system integration expert, joined the cloud business eight years ago. He worked in Belarus, where the market is small and more than 50% consists of the public sector. Three years later, in 2016, Kokhanevych realised: Cloud technologies are the future, and the Ukrainian market in particular has great growth prospects. He accepted the offer of partners and moved to Ukraine to develop a new cloud provider – GigaCloud company.
"When we started, we took the Amazon model as a basis: We decided to create a technological product available for any business, from a coffee shop near your home or a small online store to large network, international, public companies," Kokhanevych says. "First of all, we faced prejudice: Almost everyone was convinced that the cloud was expensive and unavailable."
Artem himself conducted a "mystery shopper" study – he sent inquiries to companies that operated on the market, and received replies from only two of them: "Operators who already worked with large customers required filling out long questionnaires even for a test connection to the cloud infrastructure. Operators working in cheap segments treated all customers accordingly. You had to beg to make them basically sell the cloud to you." Moreover, foreign cloud operators made market participants believe that it was dangerous to place and store their data in Ukraine. But as time passed by, there were no cases of "servers being taken away".
Currently, after five years, large customers who have been looking closely at technology and operators are migrating to the cloud. Following in the footsteps of small and medium-sized businesses, they ensure the rapid growth of the cloud technology market. "Other things being equal, large business chooses the most convenient way to solve its problems," Kokhanevych explains. "Now everyone understands that it does not make sense to invest in your own data centre (DC) or equipment. You need to invest in business."
"When we started, we took the Amazon model as a basis: We decided to create a technological product available for any business, from a coffee shop near your home or a small online store to large network, international, public companies," Kokhanevych says. "First of all, we faced prejudice: Almost everyone was convinced that the cloud was expensive and unavailable."
Artem himself conducted a "mystery shopper" study – he sent inquiries to companies that operated on the market, and received replies from only two of them: "Operators who already worked with large customers required filling out long questionnaires even for a test connection to the cloud infrastructure. Operators working in cheap segments treated all customers accordingly. You had to beg to make them basically sell the cloud to you." Moreover, foreign cloud operators made market participants believe that it was dangerous to place and store their data in Ukraine. But as time passed by, there were no cases of "servers being taken away".
Currently, after five years, large customers who have been looking closely at technology and operators are migrating to the cloud. Following in the footsteps of small and medium-sized businesses, they ensure the rapid growth of the cloud technology market. "Other things being equal, large business chooses the most convenient way to solve its problems," Kokhanevych explains. "Now everyone understands that it does not make sense to invest in your own data centre (DC) or equipment. You need to invest in business."
"Market participants were convinced that storing data in Ukraine was dangerous"
Company's customers
~7000
virtual machines are the power of the GigaCloud cloud
>100
is the RAM of the entire GigaCloud infrastructure. That's more than 100 billion Apollon 11 on-board computers
TByte
At the beginning, the company determined that it would aspire to be a cloud operator for both the enterprise and the SMB (small-medium-business) sectors. Consequently, the company's product portfolio was divided into two parts, and two teams focused on these areas.
"It was the right decision," Artem Kokhanevych says. "Even now half of the revenue is generated by one segment, half by the other one. The cloud-related experience of developed countries shows that at some point SMB in terms of revenue share begins to dominate, the distribution is approximately 70 versus 30. The Ukrainian market may reach this figure within the next three years.
"This is how GigaCloud became a universal operator. Furthermore, as the company's CEO says, the customers are not divided into "poor or rich": If necessary, the entire technical team can be involved even in the implementation of a small project. The company's products are united by flexibility: GigaCloud constantly improves existing and develops new services based on the wishes of its customers.
At first, the operator had no customers among development companies. Today, GigaCloud cooperates with a number of such companies (SoftServe, Kitsoft, Bookkeeper, IT-escort and others), which previously did not even focus on the Ukrainian market. "If we were not ready to constantly adjust our product portfolio, we would be losing this category of projects now," Kokhanevych says. "The availability of our technologies that these companies use in their solutions allows us to grow together with them. Looking back, they used to use the Amazon or Microsoft services."
"It was the right decision," Artem Kokhanevych says. "Even now half of the revenue is generated by one segment, half by the other one. The cloud-related experience of developed countries shows that at some point SMB in terms of revenue share begins to dominate, the distribution is approximately 70 versus 30. The Ukrainian market may reach this figure within the next three years.
"This is how GigaCloud became a universal operator. Furthermore, as the company's CEO says, the customers are not divided into "poor or rich": If necessary, the entire technical team can be involved even in the implementation of a small project. The company's products are united by flexibility: GigaCloud constantly improves existing and develops new services based on the wishes of its customers.
At first, the operator had no customers among development companies. Today, GigaCloud cooperates with a number of such companies (SoftServe, Kitsoft, Bookkeeper, IT-escort and others), which previously did not even focus on the Ukrainian market. "If we were not ready to constantly adjust our product portfolio, we would be losing this category of projects now," Kokhanevych says. "The availability of our technologies that these companies use in their solutions allows us to grow together with them. Looking back, they used to use the Amazon or Microsoft services."
"They used to use the Amazon services"
Why do you need the cloud?
Today, customers of cloud operators have various requests: Big data analysis, building models, production automation, trade chains, logistics. "The layer of the cloud infrastructure is the hygienic minimum that customers need to make their end services work stably," Artem Kokhanevych explains. "We take personal charge of it. These are fault tolerance, backup components, virtualisation software components, updates, security. We work to make everything what is needed for business development work without any failures, and to make sure that the customer does not spend his or her own resources on it.
"Investing money to create one's own infrastructure and maintain it at the proper level will cost the company much more than a permanent service from the cloud operator like GigaCloud. "We give our customers the opportunity to take exactly as much as they need, and when they need it," Kokhanevych says. "After all, most often today business faces urgent tasks that were not planned before: For example, to quickly implement a system that will increase sales.
"He adds: "Ten years ago, it took several years to implement a CRM (customer relationship management system) in a bank, with six months along being spent on preparing the infrastructure for a pilot project. Nowadays, a bank like this can use the help of a cloud operator, rent a resource in the cloud and deploy the system in just a few weeks.
"Investing money to create one's own infrastructure and maintain it at the proper level will cost the company much more than a permanent service from the cloud operator like GigaCloud. "We give our customers the opportunity to take exactly as much as they need, and when they need it," Kokhanevych says. "After all, most often today business faces urgent tasks that were not planned before: For example, to quickly implement a system that will increase sales.
"He adds: "Ten years ago, it took several years to implement a CRM (customer relationship management system) in a bank, with six months along being spent on preparing the infrastructure for a pilot project. Nowadays, a bank like this can use the help of a cloud operator, rent a resource in the cloud and deploy the system in just a few weeks.
"Hygienic minimum required by the customer"
Case: Prozorro
The Prozorro electronic public procurement platform has been operating in Ukraine since 2016 and allows saving $1 billion of taxpayers' funds annually. In 2018, as required by law, Prozorro migrated from Amazon WebServices hosting to a Ukrainian data centre. However, the company quickly realised that one data centre is not enough for system security or business continuity.
To distribute productive components between two data centres, the GigaCloud company experts built a completely isolated private cloud on the OpenStack virtualisation platform. Prozorro deployed its services there and, by working on two sites, reached maximum fault tolerance and could distribute the load across several cloud data centres during peak hours.
"State-owned enterprises should not spend millions of dollars on the purchase of server equipment, but move towards cloud technologies," according to Prozorro's IT Director Roman Pazych. "Thanks to cooperation with GigaCloud, we distribute server capacities. This allows ensuring the stability, availability and security of the system we use to conduct all public procurements.
"According to the ex-deputy head of the State Customs Service For Digital Development, Digital Transformations and Digitisation Yevhen Yentis, the main advantage of GigaCloud is flexibility: "The company adapts to customer demands. Its experts try to help solve any task and are able to satisfy almost any customer request."
To distribute productive components between two data centres, the GigaCloud company experts built a completely isolated private cloud on the OpenStack virtualisation platform. Prozorro deployed its services there and, by working on two sites, reached maximum fault tolerance and could distribute the load across several cloud data centres during peak hours.
"State-owned enterprises should not spend millions of dollars on the purchase of server equipment, but move towards cloud technologies," according to Prozorro's IT Director Roman Pazych. "Thanks to cooperation with GigaCloud, we distribute server capacities. This allows ensuring the stability, availability and security of the system we use to conduct all public procurements.
"According to the ex-deputy head of the State Customs Service For Digital Development, Digital Transformations and Digitisation Yevhen Yentis, the main advantage of GigaCloud is flexibility: "The company adapts to customer demands. Its experts try to help solve any task and are able to satisfy almost any customer request."
The uniqueness of the GigaCloud service lies in understanding the requests and wishes of a specific customer. There is more than a portfolio of reliable, technological services. All customers have issues when migrating to the cloud. "Someone just needs to take and migrate services, only then he or she can start working in the cloud. Someone needs help in designing a network architecture, integrating the cloud into the existing infrastructure of a large company," Artem Kokhanevych explains. "And if the operator did not help to do this, then the customer will probably never sign the agreement.
"The company has developed a special sales method: As soon as it becomes clear what tasks the customer needs the cloud for, and he or she is ready to start testing or designing the hybrid architecture taking into account the appearance of the cloud as its part, GigaCloud connects a technical team led by a presales engineer who helps choose the right solution. Sellers are responsible for the price offer and document support of the agreement, presales officers work with the chosen solution and the migration project as such.
Actually, the sales stage is only a small part of GigaCloud's cooperation with customers. The company realised that: The model, based on which the operator ensures the customer's migration to the cloud and then simply charges him or her a subscription fee, does not work. The consumption of cloud services is increasing, as customers have new issues and tasks.
There are three main stages of the large customers migration to the cloud. The first stage: The customer has not yet worked with the cloud and does not fully understand what it is. He or she has concerns about whether it is possible to move his or her services to the cloud, whether it will be reliable. Therefore, even large customers usually start cooperation by ordering a small volume of services. And at this stage, it is important to ensure that the customer has a desire to grow in the cloud and with a specific cloud operator.
The second stage: The customer begins to understand how the service works – management systems, billing systems, how it is charged, whether there are any hidden charges. The customer experiments and trusts the clouds more and more. And finally, the third stage: Fears are allayed, the customer has learned to work with the cloud and decides to use it as the main infrastructure at the level of IT strategy. Only after completing this path, the customer begins to "transport" full-fledged, large, productive services to the cloud.The path from the first to the third stage in large companies can take several years, according to Artem Kokhanevych: "If the operator made a mistake on this path, it means that he or she taught the customer the technology, but the latter can go to a competitor and continue growing to larger solutions with it. That's why we pay a lot of attention to the constant improvement of our services, technologies and their reliability, as well as to customers happiness.
"This year, we created a department with this name at the company. It develops a model of working with an existing customer base, or customer success, which is already common for large international companies. "We are not a b2b company, we are a human to human entity," GigaCloud's CEO says. "What we do is about risks and trust, since every big company has several people, not one or two, who have to trust us to sign the contract. They must believe that we are able to become part of their business."
"The company has developed a special sales method: As soon as it becomes clear what tasks the customer needs the cloud for, and he or she is ready to start testing or designing the hybrid architecture taking into account the appearance of the cloud as its part, GigaCloud connects a technical team led by a presales engineer who helps choose the right solution. Sellers are responsible for the price offer and document support of the agreement, presales officers work with the chosen solution and the migration project as such.
Actually, the sales stage is only a small part of GigaCloud's cooperation with customers. The company realised that: The model, based on which the operator ensures the customer's migration to the cloud and then simply charges him or her a subscription fee, does not work. The consumption of cloud services is increasing, as customers have new issues and tasks.
There are three main stages of the large customers migration to the cloud. The first stage: The customer has not yet worked with the cloud and does not fully understand what it is. He or she has concerns about whether it is possible to move his or her services to the cloud, whether it will be reliable. Therefore, even large customers usually start cooperation by ordering a small volume of services. And at this stage, it is important to ensure that the customer has a desire to grow in the cloud and with a specific cloud operator.
The second stage: The customer begins to understand how the service works – management systems, billing systems, how it is charged, whether there are any hidden charges. The customer experiments and trusts the clouds more and more. And finally, the third stage: Fears are allayed, the customer has learned to work with the cloud and decides to use it as the main infrastructure at the level of IT strategy. Only after completing this path, the customer begins to "transport" full-fledged, large, productive services to the cloud.The path from the first to the third stage in large companies can take several years, according to Artem Kokhanevych: "If the operator made a mistake on this path, it means that he or she taught the customer the technology, but the latter can go to a competitor and continue growing to larger solutions with it. That's why we pay a lot of attention to the constant improvement of our services, technologies and their reliability, as well as to customers happiness.
"This year, we created a department with this name at the company. It develops a model of working with an existing customer base, or customer success, which is already common for large international companies. "We are not a b2b company, we are a human to human entity," GigaCloud's CEO says. "What we do is about risks and trust, since every big company has several people, not one or two, who have to trust us to sign the contract. They must believe that we are able to become part of their business."
"We are not a b2b company, we are a human to human entity"
Case: Porsche Ukraine
The Austrian company has been operating on the Ukrainian market since 2008, importing Audi, Volkswagen and SEAT vehicles.
In 2017, after the NotPetya virus attack, when a backup platform hosted abroad proved ineffective for recovery, the company began to look for fault-tolerant solutions and options to insure its own infrastructure. Porsche Ukraine leased infrastructure from GigaCloud and built a cloud DRaaS solution (Disaster Recovery as a Service). The company does not work directly in the cloud, but duplicates its data centre from the operator. IT experts at Porsche Ukraine regularly test their backup platform: The system works without failures.
"After we encountered the virus, we decided that we should move towards backup data centres," IT Director at Porsche Ukraine, Oleksandr Zhukov, says. "Since then, our infrastructure has grown several times, while the IT department has grown by one person."
In 2017, after the NotPetya virus attack, when a backup platform hosted abroad proved ineffective for recovery, the company began to look for fault-tolerant solutions and options to insure its own infrastructure. Porsche Ukraine leased infrastructure from GigaCloud and built a cloud DRaaS solution (Disaster Recovery as a Service). The company does not work directly in the cloud, but duplicates its data centre from the operator. IT experts at Porsche Ukraine regularly test their backup platform: The system works without failures.
"After we encountered the virus, we decided that we should move towards backup data centres," IT Director at Porsche Ukraine, Oleksandr Zhukov, says. "Since then, our infrastructure has grown several times, while the IT department has grown by one person."
Cloud services have been actively offered on the world market for over 15 years. Global players capture regional markets and expect customers to come on their own. Such giants as Microsoft and Amazon do not work directly with customers, but only through partners. The GigaCloud model is built on close interaction with customers and the selection of those markets where the company has something to offer.
Therefore, GigaCloud does not aim to reach global presence, but is ready for international expansion. "We will carefully and purposefully choose new markets based on their maturity and growth potential," Artem Kokhanevych explains. "We want to find a reliable partner in every country. It can provide a country-related expertise and help address some of the issues that are beyond the cloud provider's core competencies. We bring a ready-made portfolio of services, their automation and a model of working with customers.
"Planning to expand into other markets, GigaCloud is clearly aware of the value it can offer. Among them, there is a decent portfolio of services, a sales "machine" and high-quality technical support. And also the human to human principle.
Therefore, GigaCloud does not aim to reach global presence, but is ready for international expansion. "We will carefully and purposefully choose new markets based on their maturity and growth potential," Artem Kokhanevych explains. "We want to find a reliable partner in every country. It can provide a country-related expertise and help address some of the issues that are beyond the cloud provider's core competencies. We bring a ready-made portfolio of services, their automation and a model of working with customers.
"Planning to expand into other markets, GigaCloud is clearly aware of the value it can offer. Among them, there is a decent portfolio of services, a sales "machine" and high-quality technical support. And also the human to human principle.
"We are looking for partners with similar values"
"This principle is difficult to scale, so we are looking for partners with similar values – companies that work with customers quickly and efficiently, and also want to launch a cloud project together with us and become number one in their market," GigaCloud's CEO says.
The company works with partners on the Ukrainian market based on three rules: Convenience, honesty and simplicity. You have to understand what your partners need, what not to interfere with and how to help them do their business better. A wide range of services and high quality at an affordable price are values shared by GigaCloud partners. This gives tangible results: The partners already provide a third of the company's sales in the SMB segment.
"At our first strategic session, we identified that we are a Ukrainian business that wants to work for Ukrainian customers. And it is as a Ukrainian company that we are preparing to enter the markets of other countries," Artem Kokhanevych says. "Both we and many Ukrainian companies have something to be proud of and something to offer our neighbours."
The company works with partners on the Ukrainian market based on three rules: Convenience, honesty and simplicity. You have to understand what your partners need, what not to interfere with and how to help them do their business better. A wide range of services and high quality at an affordable price are values shared by GigaCloud partners. This gives tangible results: The partners already provide a third of the company's sales in the SMB segment.
"At our first strategic session, we identified that we are a Ukrainian business that wants to work for Ukrainian customers. And it is as a Ukrainian company that we are preparing to enter the markets of other countries," Artem Kokhanevych says. "Both we and many Ukrainian companies have something to be proud of and something to offer our neighbours."
TByte
TByte
of storage is used by GigaCloud clients. Such volume would be enough for 430 libraries of the US Congress
7900
of digital collections are in the Library of Congress
17-20
Article in partnership with GigaCloud
