Application Cloud: International PaaS portfolio


“This is a first for Swisscom”

Marco Hochstrasser managed the Swisscom Application Cloud developer team of 45. In an interview, he explains why he prefers the telecommunications giant as an employer over any start-up.

The Swisscom Application Cloud was recently launched. What target market does Swisscom have in mind with this solution?

The Public Application Cloud is aimed at software developers, which is a new customer segment for us.

You have ambitious goals.

Yes, we do. The public offering that was published in October is just the first step. We look forward to receiving feedback from customers – critical feedback included, of course. This helps us drive forward the sophistication of the product. Our next goal will be to approach our business customers with the enhanced Virtual Private Application Cloud.

The competition – especially on the international market – is huge. Why should companies and developers come to Swisscom?

We are a local partner with close proximity to the customer and provide a good developer experience on a par with the competition. However, the key point is that our solution is not proprietary. We work with Cloud Foundry. This is an open standard that is now firmly established in the industry. So it makes no difference for a customer whether he has us operate one instance and operates another himself in parallel, for example. He can develop an app with us at any time and then switch to his own system, or vice versa, for example to be able to produce faster or more cheaply.

Marco Hochstrasser

The software developer has been Head of Application Cloud at Swisscom since April 2014. The 30-year-old completed training as a computer scientist at the Federal Office of Information Technology, Systems and Telecommunication and gained a Bachelor’s degree in computer science at Berne University of Applied Sciences. This was followed by five years as an SAP consultant at Swisscom. As part of the Young Talent programme at Swisscom, he spent six weeks at the Swisscom outpost in Palo Alto, where he caught the Silicon Valley bug. The software developer joined the Swisscom Cloud team in 2013. His hobbies are jogging and skiing.

“We are observing the market in Silicon Valley closely and know what to expect in two to three years.”

There are many standards. Why should this one be more successful?

The technology that adapts best to the market always wins, and this is precisely the case with Cloud Foundry. Major players are involved: SAP, IBM, HP, EMC, VMware and Intel. SAP is planning to base its entire portfolio on Cloud Foundry, which will lend a whole new significance to the interoperability of applications in a cloud. This is a major advantage for our customers, which they currently do not have with Microsoft, Amazon or Google, for example.

What market share are we talking about here?

Among business customers worldwide, the market share of solutions built on Cloud Foundry is already just under 40 per cent. This is also why we believe so firmly in the success of this standard. The critical mass has been achieved.

Where are the weak points of your solution?

We are not as big as IBM and thus cannot, for example, provide the same range of services. However, we are fast and agile and specialise in a few key – often for the Swiss market as well – services and then implement these really well.

How do you know which services will be important?

We are in Silicon Valley with a team and are observing the market closely. Everything that is hot there right now will reach Switzerland in two to three years. A good example is Mongo DB (a modern, non-transactional database). That was the totally hyped database in Silicon Valley three or four years ago. Now everybody here is also crying out for MongoDB. But in the Valley, itʼs already out again. In addition, of course, we regularly keep up to date with our customers – both start-ups and business customers.

1/5 Relaxation at sunrise: Marco Hochstrasser jogs in the Standford Dish hills in Silicon Valley.

2/5 Marco Hochstrasser enjoys a coffee in Blue Bottle Coffee in Palo Alto – in his opinion, the best coffee in the Valley.

3/5 Always online. The spirit of the Valley can also be felt in Blue Bottle Coffee: no one here takes a break without their digital assistant.

4/5 At the Swisscom outpost in Silicon Valley, Marco Hochstrasser was able to drive forward the Application Cloud project.

5/5 App cloud launch at HackZurich: the 29-year-old recently returned to Switzerland, to be closer to his team, the partners and the customers.

1/5 Relaxation at sunrise: Marco Hochstrasser jogs in the Standford Dish hills in Silicon Valley.

Swisscom is a member of the Cloud Foundry Foundation Board, together with experts from major software service providers and software providers. Swisscom is presumably quite a small fish in comparison.

Swisscom has an extremely important position in the Cloud Foundry community. Both as a provider of feedback and because we are extremely close to our customers, for example banks, and can therefore pass on very clear requirements. Our European roots are also valued greatly. Swisscom was selected by the 18 gold members and appointed to the board. The community chose Swisscom because we have been active in the community right from the very start and are thus regarded as extremely competent and trustworthy.

You are still very young and are a member of the board. There are probably representatives who are a lot older and more experienced than you. How does it feel to be the youngest member of the family?

There are some very impressive people involved, like the founders of companies that are now worth millions, CTOs, development managers, and so on. Iʼm learning a lot, but I have my say as an equal. The cultural context there is different. Age is not important. In Silicon Valley, at 30, I am always met with respect. After all, I could be the one that gets the next big thing rolling. Nobody here talks about the “young one”. There are simply too many extremely successful founders who are under 30 and conquering the world right now with their start-ups.

That is not the case in Switzerland.

Unfortunately, that’s true. Among industry veterans, age is quickly mistaken for skill, and some older colleagues make sure you know this as well.

You have been living in Silicon Valley for some time.

Yes, I’ve been living in California for the past two and a half years. Now I’m coming back to Switzerland to be closer to our team, our partners and our customers.

A difficult step?

It is definitely different, and I need to get used to it again first. But Switzerland is beautiful no matter where you’re from.

What is the main difference? What is better in the Valley?

People are much more direct, which I like. They get straight to the point if something doesn’t make much sense. Then the question quickly arises: Do we want to be successful together, or else why are we here? In Switzerland, people have a tendency to skirt around such issues. Ultimately, the aim is to be successful.

Are people also quicker to shut down things that are not working?

Absolutely, nobody is above that. It doesn’t work? Okay, away with it and we’ll try something new.

In Switzerland, we deal with failure differently than in the USA.

Hardly anybody in the US takes failure personally. If a project fails, the person hasn’t failed. Here in Switzerland, people think more long-term and more politically. People think about how the solution will still work in 20 years time. But we’re working in an environment in which technology will become obsolete in three to five years.

“In the US, people want to conquer the world with a start-up. You don’t win any investors with more modest goals.”

Why didn’t you found a start-up of your own with your skills? Instead, you manage a team in a major company. Doesn’t that contradict the spirit of Silicon Valley?

Swisscom offers me something that many major companies do not: great freedom. In the past few years, I have often felt as though I was at a start-up. We work relatively autonomously, and our team, which now has 48 people, is very young, international and really diverse. The management team gives innovative topics a chance. In a newly founded start-up, I would never have the possibilities and resources that I have at Swisscom now.

Were there that many people on the team from the start?

No, we started out in 2013 with three people and were able to develop in this way because Swisscom believes in the vision of a cloud for Switzerland and is firmly committed to this idea. From my perspective, this is an essential step towards digitising Switzerland.

As enthusiastic as you are – there are also things that are not so great in Silicon Valley, aren’t there? Absurdly high wages and equally absurdly high demands on employees. Not a problem for you?

On the contrary, I am actually quite critical of these excesses. At start-ups, the six-day week is a given, and you get maybe two weeks’ holiday a year. I had applicants who asked whether they would have to work 100 hours a week. They couldn’t believe it when we said it was fifty hours maximum. Many companies keep their employees very close: the entire social network revolves solely around the company.

Not so great when you have a family.

It’s a bachelor’s world. Many people who work in the Valley don’t even have their family with them. Viewed from the outside, this may seem unhealthy, but as long as all those involved are happy it’s somehow okay, isn’t it?

What would have to be done differently in Switzerland to make us more competitive? Money, knowledge and training are available, after all.

We are less prepared to take risks. For example, many start-up founders still work at other companies simultaneously and earn their money there. No investor in the US would accept that. There is less social monitoring in the Valley: many people have moved there, from Germany, India, Sweden. Their mothers never ask at the weekend how exactly they earn their money. That increases the willingness to take risks. Investors are also extremely prepared to take risks. They assume from the start that nine out of ten investments will fail.

They have a lavish attitude?

In Switzerland, company founders think about how they can manage a small team and quickly become profitable so that they can feed their children. Here, 50 per cent of start-ups survive – a good number to strengthen the SME market. In the US, on the other hand, people want to conquer the world. You don’t win any investors with more modest goals. That’s why 90 per cent of start-ups fail.

Maybe Switzerland is just too small for such projects.

Our domestic market is certainly a disadvantage. In the US, there are a good 300 million potential customers. In Switzerland, there are maybe 7 million. An example: a colleague in the Valley has a start-up with extremely nerdy children’s gadgets. His calculation is simple: there are 5 million geeks in the Valley. If I gain one per cent of them as customers, I will earn money. Scaled down to Switzerland, that would be maybe 50 potential customers.

What would have to be done to give start-ups in Switzerland a better chance?

We would have to make the European market directly accessible to start-ups, with no major legal obstacles. At present, the focus is still too much on the major companies. Language barriers also make things more difficult.

Despite this, Swisscom now has a product that is subject to major international competition. Aren’t you afraid that the domestic market is too small?

Yes, of course. Which is why we’re launching the Application Cloud as a Service in twenty countries simultaneously worldwide. This is a first for Swisscom. When we set ourselves this goal a year ago, nobody believed that we would achieve it. But we have achieved it – the product has been on the market since October.

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