Following a day of analyst sessions and presentations, the first general session of the Parallels Summit (which I turned around at one point to discover was completely packed) 2010 was the “Clouds, with 100% Chance of Profit” session (the title of which pretty closely echoes the event’s tag-line “profit from the cloud”) on partnering with Parallels, presented by the company’s President and co-founder Jack Zubarev.
He began the presentation with a bit of an introduction to the company, describing what Parallels does, and the company’s relationship with virtualization, the cloud and the small business market.
Parallels prediction is that the opportunity for small business cloud services is $8.9 billion now and will be 18.7 billion in 2013, divided between shared web hosting, messaging and collaboration, virtualized infrastructure and SaaS. And while those other spaces are growing faster, web hosting services will remain the largest chunk of that market. The implication was certainly that serving some chunk of that cloud services for small businesses market is imperative for most of these companies in attendance.
Generally, the discussion dealt with the development of a cloud strategy.
He describes the challenges facing hosting providers (including shared hosting providers) as including customer acquisition and retention, as well as cost pressure. Three factors making it increasingly difficult to compete in the hosting market. Cloud solutions, he says, are a kind of blanket solution that addresses many specific points from within the buckets of those challenges.
According to Zubarev, CEO Serguei Beloussov will announce tomorrow (Tuesday) that the company will be refocusing its engineering on services.
Instead of being a company with four specific products, Parallels will be a company with products focused on the four aspects of cloud services he mentioned earlier – shared web hosting, messaging and collaboration, virtualized infrastructure and software as a service, and each of those areas will have a specific leader at the company.
The presentation touched on aspects of company’s web hosting related service at a pace that makes me note quite able to repeat it, and led to the introduction of Jason Frisch, President of hosting provider Tsukaeru.net, who related the experience of his relationship with Parallels, which began with the deployment of virtualization and automation software in 2004.
The benefits, he says, include the fact that the automation of the company’s business processes has enabled the company to focus on support and marketing, enabling the company to become one of the significant players in the Japanese mass market hosting industry without significant investment.
He introduced the opportunity in virtualized infrastructure, the market for which he expects to grow by 32 percent between 2009 and 2013, to account for $5.1 billion (that’s strictly for small businesses). Virtualized infrastructure, he says, is not just VPS, it includes a range of different types of services that include storage, backup and disaster recovery, among many others.
He also addressed the hype surrounding cloud computing in the Amazon style. He says Amazon does not serve small businesses in the sense he’s describing.
As expected, Zubarev’s feeling is that the solution to the small business’s virtual infrastructure needs is a combination of the Parallels Virtual Automation, Parallels Virtuozzo Containers and Parallels Server Bare Metal.
The cloud talk led to the introduction of Richard Kloosterman, CEO of Network Group Europe, and another Parallels Partner, to discuss his company’s relationship with Parallels.
Network Group delivers hosted Microsoft collaboration tools (Exchange, SharePoint, Dynamics, Communications Server and some add-ons) to small businesses.
As a software developer, he discussed the pros and cons of the build/buy debate related to business process software, the pros typically being control of the process and a fully tailor-made solution, while the cons included the cost and difficulty of keeping up with the market. The advantages of buying included the greater expertise of the larger development team and the short time to market.
Implementing the Parallels Operations Automation, he says, enabled Network Group to deliver things five times faster, which translates roughly to five times more revenue.
The messaging and collaboration piece, says Zubarev, is definitely the most sticky of the four services he described. Partly because customers don’t like to, or want to, move their email, providing an email solution to your customers can make it less likely that they’ll want to move any of their services away from you. And Parallels, says Zubarev, has built the best tools for the automation of hosted messaging and collaboration.
Here, he introduced Sal DiPiazza, president and CEO of Exchange My Mail, a provider of wireless synchronization services for BlackBerry users. In the early going, the company wasn’t automated at all, and it resulted in a situation where a huge amount of the company’s resources were going into supporting customers in a nuts and bolts kind of way. It made it impossible for the company to go after a 100-user or even 50-user account.
After deploying what is now Parallels Automation, the company was able to grow and serve its customer base, create simple upgrade paths for those customers and keep tech support levels steady as it grew.
Finally, he touched on Software as a Service, which he expects to grow by 26 percent by 2013.
He thinks that, while CRM is the obvious SaaS example, with the success of Salesforce.com, SaaS for small businesses doesn’t just include CRM, it includes all the applications that will help small businesses do their business.
Here he introduced the Parallels Small Business Panel, which the company will be providing detailed information about during other sessions.
He also introduced the company’s Application Packaging Standard, which enables ISVs to package applications and services so they can be easily deployed and billed for by companies using the Parallels automation and control panel tools.
Finally, he discussed what Parallels can do beyond providing software. That included dedicated account management, marketing resources, flexible licensing and discounts on products. Parallels’ PartnerNet site provides a broad range of partner marketing collateral, as well as a means for submitting support requests and providing product feedback and feature requests.
And he discussed the recent introduction of Parallels certification training, much of which will be conducted at the event, from 9:00 a.m. until 5:00 p.m. on Thursday.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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