Huddle: Don’t Bother Starting Up A Content Cloud – You’re Too Late

If you’re considering setting up a content cloud company, don’t bother. The market is already as overcrowded as a Central line tube train on Monday morning, and you can’t compete with the umpteen established players. And if you’ve just joined the industry, expect to have a brief existence.

At least, that’s what CEO of cloud collaboration firm Huddle Alastair Mitchell (pictured) says. He thinks the market is set for massive consolidation and a number of closures. There are just too many minnows who think they can take on tech titans like Google, Microsoft and Salesforce.com, but they won’t succeed as Huddle did, Mitchell claims.

“We counted 98 different content cloud providers and that is growing all the time. Are we worried? No, because if you’re entering the game at this stage you are too late. You need to have been in it for the last four or five years,” he tells TechWeekEurope.

“There will be a huge amount of consolidation. There will be companies who started up in a bedroom realising it is very hard and they need a lot of money to build a big service.

“The market will shake out to leave the guys who are successfully challenging the incumbents.”

Smaller companies may struggle to get the investment they need in the current climate, where venture capitalists, especially in the UK, are more risk-averse than an agoraphobe with severe hypochondria. It cost Huddle $40 million to build up its data centres where its collaboration software runs, Mitchell boasts.

Huddle up

It’s another big statement from Mitchell, who isn’t exactly demure when it comes to trashing the competition. Just recently, he told your correspondent that Amazon and Google aren’t on the UK government’s G-Cloud because their infrastructure isn’t secure enough. He likes to lay into Microsoft too, heaping opprobrium on SharePoint, painting it as the addled old gent of the market.

But it’s easy to forgive his bravado. Largely because he is head of one of the few genuinely successful British companies running out of London’s Tech City. Indeed, it’s on Silicon Roundabout itself.

Many remain concerned about the government’s plans for Tech City, which houses hundreds of small firms, none of whom have yet made much of an impact on the global stage. That’s why Huddle shines out like a beacon of hope for the area.

It brought out some impressive figures out today, claiming to be the most successful vendor on the G-Cloud, winning 14 percent of the 95 deals done over the framework, including deals with Ordnance Survey and the Crown Prosecution Service. It said  80 percent of central UK government departments are using its software.

Not that Huddle’s government successes stop Mitchell from pushing the Coalition to do more. He is desperate to see the UK follow in the US’ footsteps and enforce a cloud-first approach to procurement. “Cloud is transforming the way we work, therefore it should do so at the government level as well,” he says. “Unless that happens, cloud will still be the future, but it will just take longer to get there.”

Yet Huddle isn’t just claiming a tonne of business inside the UK. It’s got a base in San Francisco, is setting one up around Washington DC to serve Barack Obama’s government, serves organisations across Europe, and is now looking at where to go next. The BRIC nations may be the next port of call – and, yes, that includes China.

“About a third of our business demand comes from outside the UK and US. Predominantly they are in the near-European regions… and then also in Australia and the Middle East,” Mitchell says.

“We have demand from China, India and Brazil. We actually have a very fast growing community in Brazil. Who knows what the future will hold?

“But this year we are really focusing on our UK and US businesses. Let’s not forget 60 percent of the world’s software business is in the US.”

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