“Cloud” … a Discussion with Jack Zubarev, President, Parallels Service Provider Division

Q:  What is cloud computing?

A: At Parallels, we define cloud services as any IT services or applications delivered remotely over the Internet on a subscription basis from the centralized data centers (and that includes “private clouds” of big enterprises as well).

Cloud computing (or compute platform) – renting raw compute and/or storage resources on demand – is just one example of cloud services. In fact there is a misperception that cloud computing involves “unlimited” instantly-elastic compute capacity. This is obviously not the case even for a leader in cloud computing – Amazon. There is a very finite limit on both elasticity and provisioning times for any cloud computing provider – whether it’s a dedicated hoster with physical infrastructure or Amazon. Other examples of cloud services include traditional shared hosting which is delivery of multiple Web applications in a SaaS model (website, mail, etc.), as well as application platform cloud services that typically include hosted development framework or middleware engine with the ability to upload your own applications into such a platform. Online services – including online banking – are yet another example of a cloud service. I’d encourage readers to listen to Serguei’s (Serguei Beloussov -Parallel’s CEO) presentation for additional details on how Parallels categorizes different types of clouds.  You can find the presentation at http://www.parallels.com/videos/.

Q:  Where do you see an opportunity with the cloud services?

A:  We believe that a significant part of today’s IT market will move into the cloud within next decade. More importantly, the majority of $500 billion IT market for small to medium businesses (SMBs) will move into the cloud and I believe it’s happening much faster than most analysts are forecasting. There are few fundamental reasons why this is happening and happening quickly:

1.     Economic reasons. SMBs can avoid any upfront costs associated with initial hardware and software acquisition as well as reduce management and maintenance expenses on IT. An economic crisis is accelerating this trend. IT for most of SMBs is an afterthought – if they can get it from someone else – they will.

2.     Access to new powerful applications and services. Traditionally SMBs were disadvantaged compared to the enterprise as they did not have capability to buy, deploy, and implement sophisticated applications that will help them to run their business better. Look at salesforce.com for example – a lot of happy salesforce.com SMBs customers could not have afforded such an application if they were to deploy it on-premise.

3.     SMBs can move fast in adopting cloud services as they just do not have huge investments into existing IT infrastructure. They are more flexible. And they are driven by ease of use and low cost – two exact things that cloud services are good at.

4.     Finally the advances in the infrastructure, including bandwidth, means that quality of services, availability, and security provided by cloud services are in many cases superior to what SMBs can afford with their own on-premise IT.

So overall we see tremendous opportunity for cloud services among SMBs. This is not to say that 100% of SMBs will move into the cloud tomorrow or that cloud services for SMBs are completely mature. They are not. And for some applications, it will take time to move into cloud and there are technical challenges related to running mixed (cloud + on-premise) infrastructure. But some of the SMBs applications – Web apps, mail, and many others – are already close to 100% in the cloud for U.S. and European SMBs. And other applications are following quickly. Further, a two-person consulting shop and 300 person manufacturing plant are both SMBs. But they have quite different IT needs and clearly the pace of cloud services adoption is faster among smaller companies. But IT budget is bigger for larger SMBs. Pick your market.

Q:  How is Parallels helping its partners to take advantage of this “cloud” wave?

A: First, let’s continue with an SMB theme. SMBs need applications. They do not want a server. They do not want to manage or maintain it. We’ve been working on APS (application packaging standard) for the last 2 years and today there are over 200 SMB applications that can be offered using APS. Our Parallels Automation customers can instantly offer those applications using the SaaS module. And we are continuing to expand this list as it is a significant focus for us. Next we invested significantly in building the best automation solution for business class email – Microsoft Hosted Exchange and Open-Xchange. Business class email is the first application any business gets, and it’s an important cloud service to get right.

We are now close to the release of Parallels Panel SMB edition which is an “IT-in-a-box” solution for SMBs that want to run all of their applications on virtual or dedicated servers.

Finally on the virtualization front, we are planning to have major releases this year including a complete solution for offering “cloud computing” services, and a release of Parallels Server Bare Metal which will help our partners to virtualize physical infrastructure and offer a number of new cloud services. Our focus has always been on the end-user services and we are constantly looking for new services that can help enable cloud services. That and continuing down the road of automation, at the end of the day are the most important and strategic focus for us. 

To learn more about how Parallels helps hosters / cloud services providers to be more competitive, visit http://www.parallels.com/spp. You can also view Serguei Beloussov’s Cloud Computing Keynote at the Parallels Summit 2009, at http://www.parallels.com/videos.

Industry analysts have predicted a sharp rise in the adoption of cloud computing. According to IDC, worldwide IT spending on cloud services will grow almost threefold in the next three years, reaching US$42 billion by 2012.