Business intelligence vendor Birst has announced a partnership with Amazon Web Services in Ireland. This is an attempt to appease concerns from potential customersabout having their data hosted in the US, in direct response to Snowden's revelations about the NSA.
Although Birst is following a recent trend of Software-as-a-Service providers making moves to offer hosting capabilities on EU soil, this announcement strikes a different tone. Unlike Salesforce, Oracle or Netsuite, all of which have remained adamant that the NSA debacle hasn't had any impact on prospective customers – Birst is stating that it has found that companies in the UK and Europe absolutely do not want their data hosted in North America for that very reason.
This will no doubt please European Commission Digital Agenda Commissioner Neelie Kroes, whom has been using the PRISM revelations as an example of why the region needs a pan-European Cloud Computing Strategy.
Whilst this announcement from Birst is an interesting indicator regarding its strategy to pursue a growing international customer base – see my recent interview with CEO Jay Larson about the company's ambitions in cloud BI – it also points to some of the challenges that US cloud vendors face in securing EU customers post-PRISM (especially in the public sector).
I got the chance to speak to Birst's VP of Product Strategy, Southard Jones, about the AWS partnership. He said:
Two years ago we at Birst decided that we wanted to be an international company, not just a North American company. We did a number of things - picking some partners, putting about 12 folks in the UK - and with that came some customers. And what we had heard from those customers and many other folks in Europe was that they were wary about having their data hosted in the United States.
So there was two options for us – build our own data centre in Europe, or partner with Amazon and leverage their capabilities. This is a clear signal to the market and for Birst to make a pretty large investment to ensure that we can service the UK customer. There is no connection to here in the US, it is totally separate.It's primarily to ensure that we could deliver to our customers what they want, which is data hosted in the EU but still run and managed by Birst.
When I asked Larson about the NSA revelations and their impact, I really did expect him to dismiss the question. However, quite refreshingly, he was very honest about how customers in the UK and Europe are now feeling about having their data hosted in North America. He said:
Clearly Snowden and NSA propelled this demand. I think there was always an undercurrent, but between Snowden and the NSA and the spying, it has since been brought to the fore and people definitely wanted a resolution to it.
If it wasn't for NSA and Snowden, I don't think we would be doing this with the data centre in Ireland.
- Interview: Birst's newly appointed CEO aims for an IPO
- Three months in and Birst's new CEO is bullish on creating the the next software giant
- Cloud BI - getting real for the enterprise
Very interesting, indeed. So how will this practically work? Current EU Birst customers will now have the choice to migrate to the AWS data centre in Ireland if they so wish (their billing won't change) and new customers in the region will be given the choice about whether or not they want to be on EU soil or not.
Jones signalled that the relationship with Amazon will continue into other regions and also suggested that Birst may make use of other partners in other European countries – as the likes of Salesforce plan to do with new centres in France and Germany. Birst already has a hosting partner in Benelux, so it would not be a surprise if more hosting environments sprung up across the region.
I also questioned Jones about whether or not this was about targeting the public sector – his response was clear. He said:
Yes – some of our prospects in the public sector have said that we won't do anything until the data is hosted here in the EU or the UK.
Birst has also announced today that it has signed 16 new partners across Belgium, Finland, Germany, the Netherlands, Sweden and the UK – which will be used to drive its growth in Europe. At the moment, between 20 and 30 percent of Birst's revenues come from outside North America, and Jones said that the lion's share of this is from Europe. However, 75 percent of those deals are done through partners and he hopes that the new channel deals will continue to drive growth and revenues.
Birst has also added a number of European customers in the past year, including the Financial Times, Reckitt Benckiser, Dialogue Communications, Itsu Sushi and EAT.
When I spoke to Birst's new CEO Jay Larson a few weeks ago, he told me that he was going to be bold and that he was going to push to make Birst the next software giant. The move into Europe with a locally hosted data centre is a smart one and ties into what we are seeing from the bigger players across the market.
However, the company's willingness to acknowledge the impact of the Snowden revelations is new to me and will no doubt spark some interest. Honesty is always good in my books and any prospective EU customers now have the choice to use Birst's product on EU soil – win, win.