Parallels out from under the radar

From its 2003 acquisition by storage giant EMC to its staggering debut on the New York Stock Exchange in 2007, VMware has been synonymous with virtualisation technology. The stream of headlines celebrating its successes – and those of its customers – testifies to that.

But another company has built up a comparable product set and install base in an altogether less conspicuous fashion. Its technology, according to the company’s own estimates, supports 10 million end-users – but hardly any would recognise its name.

That company, once known as SWsoft, is now ready for its turn in the limelight.

“Historically, we have tried to stay under the radar,” says CEO Serguei Beloussov, in order to avoid undue attention from the larger IT vendors, which are increasingly attracted to the virtualisation space. But the time is now right, he says, to tie together its various products under a single brand.

Step one: rebrand the entire company as Parallels. The name comes from the company’s popular desktop virtualisation product, often used by home Mac users to run the Windows operating system concurrently with Mac OS X. Forthcoming releases of its other products, including the operating systems virtualisation tool Virtuozzo, will bear the Parallels moniker.

Step two: write a tag line to explain what the company does. In trying to find a common thread that appeals to customers ranging from home users to multinational web hosting providers, Parallels plumped for simplicity – “Optimised computing” is the new raison d’être.

This, says Beloussov, best reflects the way Parallels, a privately held company with annual revenues of around $100 million, seeks to market its underlying virtualisation software. Unlike VMware, which Beloussov argues is trying to establish itself as a software platform provider, Parallels seeks instead to help customers get the most out of their existing infrastructure.

“I admire what VMware is trying to do; it takes a lot of courage to try and become a platform provider,” he says.

This infrastructure management approach ties Parallels’ automation toolset in with its virtualisation offerings. That toolset – some of which it gained when it acquired German software provider Plesk in 2007 – promises to remove the donkey work from the data centre management.

It also reflects the company’s focus on selling to service providers, especially software-as-a-service application and web-hosting providers. Most of Parallel’s revenue came from service providers until last year, when business and consumer sales overtook that area, but Beloussov predicts that service providers will again become the most important channel “because in the future a very large part of IT will be hosted”.

That market is particularly appealing to Parallels, says Beloussov, because IT optimisation is critical to online service providers’ business success – whatever IT cost they can force down translates directly into profit.

“[Hosting and SaaS providers] need to optimise their hardware utilisation, which they do with virtualisation,” he explains. “But they also need to optimise their management costs with automation and self-service,” Beloussov adds, and Parallels has a tool set that meets all of these requirements.

Of course, the pressure to optimise IT plays on all organisations, and Beloussov is confident that, as organisations shrink their IT budgets in the face of financial turbulence, Parallels will benefit.

“We are very happy this is happening,” he says. “We used to tell companies they could spend less on infrastructure [management] with us than with VMware, but they didn’t care – they were saving so much with VMware that they didn’t need to save any more.”

But with IT departments tightening their belts, there is now room for a VMware competitor focused on cost-cutting, not empire building.

Further reading

The new architecture Between virtualisation and SOA, the foundations for a flexible IT infrastructure are now in place

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Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media (now Bonhill Group plc) from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The...

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