#HostingCon Interview with Serguei Beloussov, CEO of Parallels.

HostingCon-Serguei-Beloussov (1 of 1)

I'm sitting here with Serguei Beloussov Beloussov and Kate Lannan of Parallels.

Tell me about Parallels. What's the story between SWSoft and the rebranding?

Serguei Beloussov: SWSoft and Parallels were always the same company and different business units. Parallels was a 90% owned subsidiary of SWSoft. We re branded earlier this year, and they are now the same corporate entity. I founded it, and I now own 60% of the company.

We started developing in 1999, which is when we were developing. Our first product was Containers, quickly followed by Automation. All of our products are currently developed to the needs of the on the channel. We are very focused on the channel. Originally we built products for the ASP market, and then started developing for hosting, and eventually got into enterprises. As we move forward, everything is going to be focused with the cloud in mind. In order to be more hosting, we need to help the web hosting industry transition into a cloud computing industry.

We have over 800 employees currently, and we make money.

How many employees do you think you'll have in a year?

Serguei Beloussov: We're not hiring so much right now because we've increased via acquisitions .. Maybe grow 1.5x in people over the next two years. We have a lot of employees from our acquisitions.

Are there any new acquisitions on the horizon in the near future?

Serguei Beloussov: Not right now. We're like a Python right now. We just ate a lot, and now we're absorbing. We're looking at 12-24 months to digest what we've swallowed.

Tell me more about Parallels product lines.

Serguei Beloussov: Right now Parallels really has three product lines:

  1. Virtualization
  2. Automation (Plesk and Datacenter automation products called Automation)
  3. Other hosting product lines, most of which we're slowly migrating away from.

At this point Parallels has a broad and complex portfolio of products, some of them are rather similar to each other. Is consolidation on the horizon?

Serguei Beloussov: Yes. We're working on this, but it's a very slow process. The main key is migrating everybody to our Automation product. The delicate situation is that our hosters trust us, and relay on us. Because of this we're taking time to do the migration so as not to leave our hosters in the dark. It's a very slow process, and it's going to take 2-5 years just to phase out all of our simpler product lines. We're heavily encouraging our partners to migrate to, and focus ther new sales on Virtualization and Automation.

Let me clarify, when I say partners, I mean our hosting customers. Hosters really are our partners.

What's next for Parallels?

Serguei Beloussov: Right now we're trying to simplify the product vision. Our long-term focus is really on automation. I believe virtualization is an important technology for managing datacenters. Especially for corporate IT. By platform I mean both the hardware platform and operating system platform. Today virtualization is imperfect so they have to enhance what's available as well as ship our own two virtualization products. We have two technologies, one is the OS virtualization called Containers as it's an inherently more efficient use of resources.. This is very useful for web hosting providers. Our other tech is a Hypervisor, which is the most popular virtualization technology.

Moving forward, The right approach is to transparent integrate the platform between containers and hypervisors. With our integrated product, we'll make it so our users can switch between the two technologies seamlessly. In situations where patchlevel needs to be consistent, customers can run in containers. When they need to make one-offs or changes, they can restart the container and have it reboot as a virtual machine. This is our vision.

What's the time line for the integrated product?

Serguei Beloussov: Since we're a smaller company in this space, we need to implement in small steps. Right now we're shipping parallels for mac. We'll be shipping the bare metal version in a couple of months. In about a year, maybe as early as the beginning of 2009, we'll be shipping the fully integrated product. It won't be so usable for desktops, but it's a great technology for servers.

Right now we are very broadly focused. I think in the future a significant portion of computing will move to the Cloud. They started calling it ASP in 1999, then the buzzword changed to SaaS, but it was always in chase of the same goal, which now has the popular buzzword "Cloud".

In the future there will be 5 types of Cloud:

  1. Google. Today it's real cloud computing .. It's real applications in someone's cloud, "honestly I believe Google is a true evil empire". Google realized that the main impetus for it's growth will be anti-trust laws. Because of this from the beginning Google tried to position itself as a nice company. Google is very closed, and very focused on direct control of the end customer.

    "Larry Page and Sergi Brin realized from the beginning to make the company sound like a nice company. It's funny how nobody writes poorly about Google."

  2. Microsoft cloud. Microsoft is very real and very partner friendly. It is still a dangerous company, and it has to compete with Google now so it has no choice. Microsoft is not anti-hosting. It's pro-hoster, but customers can get squeezed in between Microsoft and Cloud.
  3. Other Microsoft/Google similar companies .. Apple/Adobe/Ebay/IBM. They all have to compete with Google & Microsoft in the cloud market. Bill Gates was visiting with VC's and saying that in the future there will be 2 computing companies, Google and Microsoft. In fear of this, everyone from EMC IBM AMAZON APPLE are building their clouds. They may or may not cooperate with hosters.
  4. In-house clouds of large companies. These guys don't need to host outside, btu they still need clouds. They'll still run large datacenters in ternally.
  5. Hosters. There is a channel. Hosters need to accept that they are really not a technology company but a channel company. They enhance and integrate solutions. They don't develop applications or operating systems.

Parallels is focused on providing software solutions for type 4 and type 5 customers.

What do you think Google's cloud will do the hosting industry?

Serguei Beloussov: It's very complicated, but it's very dangerous cloud. Google is going to eat the growth in the hosting market.

Would you say your goal is help create a large number of mini-clouds?

Serguei Beloussov:Yes, and you'll see exactly that in my presentation tomorrow.

What's your view on the economy? Are you worried?

Serguei Beloussov: We're not so dependent on the state of the economy because we grow by eating market share. Another reason is that our solutions for the majority of customers enhances optimization of resources. Even in the hosting/outsourcing space it does help to save money. In a bad economy companies are more focused on optimization and efficiency.

One thing that's changing is that the US market is becoming less important for IT companies for growth. Majority of growth is no longer coming from US companies.

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