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Ukrainian cloud services market during the war

Updated: Oct 22, 2023

Executive Summary:

War is always a time of great trials and destruction, but it can also open doors to innovation and development. Did you know that Ukrainian engineers are developing some of the most innovative and reliable drones in the world? Were you aware that prominent Ukrainian cloud providers are now actively expanding their services in Europe? The impact of the war in Ukraine is not limited to devastation and loss. It has also become a catalyst for growth and innovation, particularly in the cloud technology sector. Additionally, global cloud giants are stepping in to aid Ukraine, contributing their technology and resources to help foster growth and resilience in these challenging times. Let's deepen our understanding of this phenomenon by exploring how the war has spurred the growth and adaptation of Ukraine's cloud service market, despite all the challenges. What awaits Ukraine this winter? What future lies ahead for cloud technology in Ukraine? We discuss all this in our article.

 

The Ukrainian cloud services market has experienced significant growth and adaptation over the past year, despite the challenging circumstances of the war. Since the outbreak of the military conflict, demand for cloud solutions has increased dramatically as businesses sought reliable IT infrastructure and government agencies sought to ensure continuity and delivery of critical services. In the wake of the war, key market players developed strategies to not only survive but also to grow and support the country's recovery.

Despite the challenges, global cloud service leaders such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform remained active in the Ukrainian market, providing cloud infrastructure and support services to businesses and government agencies.

Besides, national players such as GigaCloud, Netwave, De Novo, SOFTPROM, and UCloud have played an important role in shaping the cloud landscape in Ukraine. Their investments in expanding the infrastructure, providing secure and reliable cloud solutions, and providing support during the difficult time of the conflict have helped to strengthen the industry and support businesses in times of uncertainty.


Operational Challenges for Cloud Providers During War

Cloud service providers confront a range of challenges in maintaining their operations during winter and ongoing war. The energy sector's vulnerability to attacks poses a significant risk to both energy infrastructure and data centers. The delayed impact of attacks, coupled with resource constraints for repairs and restoration, can disrupt power supply to data centers, affecting the delivery of cloud services. Moreover, increased energy demand during winter strains an already compromised energy generation system, further threatening data center operations and network connectivity. Cloud providers must also contend with heightened cybersecurity threats and ensure robust business continuity plans to swiftly recover from disruptions.


Despite these difficulties, cloud providers demonstrate resilience by fortifying cybersecurity measures, enhancing disaster recovery strategies, and investing in redundancy. By anticipating and addressing these challenges, they not only protect their own operations but also contribute to the stability of critical business operations within Ukraine.


Actions of Hyperscalers in the Ukrainian Cloud Services Landscape Amid Conflict


1. Amazon Web Services (AWS)

As a global leader in cloud computing, AWS played a pivotal role in supporting Ukraine during the war. The company demonstrated its commitment to the country by providing seed funding, operational expertise, and learning resources to help establish "BecomingX Ukraine," a digital education platform. This initiative, co-founded by adventurer Bear Grylls, aims to equip Ukrainians with digital skills, enhance employability, and foster confidence as the country looks to rebuild.


Moreover, AWS has been a critical partner of the Ukrainian government in ensuring continuity and providing essential services to citizens throughout the conflict. A memorandum of understanding was signed between AWS and Ukraine's Deputy Prime Minister and Minister of Digital Transformation, affirming continued cooperation in 2023. AWS's contributions have surpassed $75 million, encompassing support in various forms, from critical relief products, medical supplies, and food to devices for education and cloud computing assistance to preserve vital government data.

AWS's long-term commitment to the country extends beyond immediate assistance, as evidenced by the launch of "IT Skills 4U." This comprehensive workforce-development initiative provides free AWS-designed skills training and career support services to Ukrainians worldwide. The program offers various courses, from cohort-based programs to on-demand training, enabling individuals to gain industry-recognized credentials and access cloud jobs through personalized support services.


2. Microsoft Azure

Microsoft Azure cloud platform, has made a significant contribution to supporting Ukraine during the military conflict. Recently, Ukraine's Prosecutor General, Andriy Kostin, and Microsoft's Vice President of Operations, Brad Smith, agreed to provide Ukrainian prosecutors with free access to Microsoft Azure. This initiative will increase the ability of Ukrainian law enforcement to collect and analyze evidence aimed at uncovering large-scale war crimes committed by the Russian Federation.


Providing access to Microsoft Azure for Ukrainian prosecutors is a step towards supporting modern digital tools for collecting, analyzing and processing evidence. This is crucial in the context of warfare, where the speed and accuracy of collected data can determine the success of investigations.




3. Google, Google Cloud Platform Ukraine, in the midst of a prolonged war, is revealing a strong community of startups that are facing major economic challenges. To help this dynamic industry, Google has taken the initiative to launch a $5 million fund to support Ukrainian startups. This fund enables entrepreneurs to develop their businesses, strengthen the community, and ensure stable operations even in times of military conflict. Ukrainian startups that are selected for support will have a chance to receive up to $100,000 to develop their projects. In addition, they will be able to participate in Google's mentoring program, access product support, and use credits in Google Cloud.

This initiative not only provides financial support to startups, but also includes the opportunity to gain knowledge and skills in working with cloud technologies through training programs. The first batch of the "Develop a Career with Google Cloud" program has already been completed, and by the end of 2023, Google plans to train up to 10,000 Ukrainians in cloud technologies, which will help strengthen the country's digital transformation and develop the IT industry. This initiative from Google is another example of how large tech companies are promoting small business development and innovation, even in the difficult conditions of war.


Ukrainian Cloud Service Providers

Ukrainian cloud service providers are not only rapidly expanding within their own borders but also extending their reach to European countries. With data centers established in European nations, their growth has become a noticeable presence in the global cloud computing market. This expansion signifies the increasing prominence of Ukrainian providers on an international scale. Moreover, as Ukraine entrusts its cloud service needs to these homegrown companies, it underscores the nation's confidence in their capabilities. Monitoring the progress of these providers offers valuable insights into their ability to navigate global markets, provide trusted services, and contribute to the dynamic landscape of cloud computing.


1. De Novo

De Novo is a pioneer in the Ukrainian cloud services market. Founded on the principles of energy and enthusiasm, the company has made a significant contribution to the development of the idea of infrastructure clouds and changing the way they are approached in Ukraine. Its efforts have helped popularize cloud technologies among domestic entrepreneurs.

One of De Novo's key achievements is the introduction of a private Cloud as a Service, which allowed entrepreneurs to develop their business quickly and conveniently. The company has influenced the creation of a methodology for cryptographic data protection in cloud environments, received certifications and certificates of conformity, increasing consumer confidence in its services.

During the war, De Novo showed a deep commitment to the country's security and development. The company actively supports the Armed Forces of Ukraine by investing in equipment supplies and other needs. Its employees actively defend the interests of Ukraine.

2. GigaCloud

After the full-scale war launched by Russia against Ukraine on February 24, GigaCloud, a well-known Ukrainian cloud service provider, became a prominent leader in the cloud services sector. Recognizing the increased demand for cloud solutions during these challenging times, the company quickly took action by allocating €1,350,000 to strengthen and expand its data center capacity, focusing on western availability zones. This strategic investment helped expand GigaCloud's reach to regions such as Poland and Western Ukraine.

GigaCloud's experience in building private cloud infrastructures for large enterprises is attracting considerable attention. Industries that benefit from their customized solutions include finance, retail, fintech, energy, logistics, and education. In the face of disruption and uncertainty caused by the ongoing conflict, GigaCloud's commitment to providing adaptive and secure cloud services has become paramount for businesses seeking to maintain business continuity.


3. Netwave

Despite the difficult conditions of war, Netwave continues to operate with a proactive approach. They are working on critical infrastructure restoration tasks on a volunteer basis, together with manufacturers, and implementing commercial projects. Despite the reduced number of commercial projects and the larger volume of tasks, Netwave is actively working to fulfill them.

The company specializes in the implementation of complex integration projects that are extremely important for business and critical infrastructure. They provide consulting, technical support, modernize and update IT subsystems. The company is also actively engaged in cloud migration, building reliable disaster recovery plans (DR plans), and setting up backup and cybersecurity systems.

Even in times of war, certain segments of the Ukrainian IT market are active. The public sector is planning to implement donor and loan projects, the financial sector is maintaining infrastructure and services, and telecommunications and service providers are continuing to work on projects.


4. UCLOUD

UCLOUD is a prominent Ukrainian cloud service provider renowned for its robust infrastructure and dependable solutions. The company operates five strategically positioned data centers, with three located in Poland, one in Germany, and one in Ukraine. This extensive network empowers UCLOUD to deliver reliable data storage, processing, and protection services to its clients. UCLOUD's commitment to ensuring business continuity, even during challenging circumstances like martial law and economic uncertainties, makes them a trusted partner for various sectors.


UCLOUD caters to a diverse range of clients, including those in critical infrastructure, banking institutions, retail businesses, and entrepreneurial ventures. The company's comprehensive service portfolio encompasses Infrastructure as a Service (IaaS), data backup, disaster recovery (DRaaS), and DDoS protection. As UCLOUD's reach extends beyond national borders, their growth and expertise contribute to the evolving landscape of global cloud service providers. Ukrainian Technologies need to be creative During War

The war in Ukraine has become a crucible for technological innovation and adaptation. Aria Berlin, one of Ukraine's drone warriors, succinctly captures what legions of social scientists attempt to articulate in volumes of research: "We have to be innovative, man. You know why? Because we want to survive." This ethos has driven Ukraine to a position of necessity-driven innovation, where existential threats have defined national priorities.

From the rapid development of drone technologies to the adaptation of civilian technologies for military purposes, Ukraine's technological sector has been forced to innovate or perish. The country's investment in drone technologies, collaboration with local manufacturers, and successful deployment of drones against adversarial targets underscore a transformative shift in warfare.

Moreover, the resilience and creativity exhibited by Ukrainian tech experts may hold valuable lessons for addressing non-military global challenges, such as diseases or climate change. The Ukrainian experience illustrates how "creative inevitability" can spark innovation, raising intriguing questions about mobilizing such energy for future global challenges. From $5 billion in 2020 to $7.3 billion the previous year, Ukraine's IT services export has seen significant growth. Some predict that, following the war, Ukraine will emerge as one of the world's most vibrant technology hubs. 'Ukraine is like Israel, but on an XXL scale,' says Oleg Roginsky, the founder of People.ai.



What the Future Holds for Cloud Service Providers

Looking ahead, the cloud service provider landscape is poised for continued growth and innovation. Leading global players such as AWS, Azure, and Google Cloud are expected to further expand their offerings and capabilities. As organizations continue to prioritize digital transformation and remote work arrangements, these providers will likely invest in enhancing their infrastructure, security measures, and scalability to meet the evolving needs of businesses and individuals worldwide.

The ongoing demand for cloud-based solutions will encourage these providers to develop new services, such as advanced AI and machine learning tools, edge computing capabilities, and improved hybrid cloud solutions. Additionally, the integration of sustainability practices and energy-efficient technologies is expected to be a key focus, as the industry acknowledges its environmental impact and seeks to minimize it.

As for Ukrainian cloud service providers, their upward trajectory is likely to continue. With their expanding presence in European countries and their demonstrated ability to navigate challenging circumstances, Ukrainian providers are gaining recognition and trust on a global scale. Their contributions to the market, both in terms of technological advancements and assistance during times of crisis, indicate a promising future for the Ukrainian cloud industry.


Conclusion

War presents unprecedented challenges, but the resilience and dedication of cloud providers, both global and local, come to the forefront. AWS, Azure, and Google Cloud have provided significant support, strengthening business and societal stability in Ukraine. Meanwhile, Ukrainian cloud providers have not only coped with the challenges but have also expanded their services and infrastructure, demonstrating their growth and adaptability. Their collective efforts underline a commitment to business continuity, national defense, and support for those directly affected by the conflict. The progress and achievements of these providers are a testament to Ukraine's determination and innovation in the cloud technology sector, even in the face of adversity.


Join the conversation and share your thoughts on the resilience of the cloud technology sector during challenging times. How do you see the future of cloud services in Ukraine and beyond? Let us know in the comments below or connect with us on LinkedIn. Together, we can foster a community of innovation and support.


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