“I never planned to become a businessman. When I was at school, I wanted to be a theoretical physicist,” says SWsoft co-founder and CEO Serguei Beloussov.

Yet SWsoft is not even the Russian’s first company. Previously, he ran an Asia/Pacific franchise for enterprise resource planning software vendor Solomon Software, before it was swallowed up by Great Plains, a bigger rival.

SWsoft, however, is a more ambitious project. It was set up in 1999 when Beloussov noted the emergence of hosting service providers (HSPs). Initially, the idea was to

develop a new operating system that would enable HSPs to run multiple iterations of the same application, suitably customised for different clients.

But that was simply not practical. Instead, Beloussov decided to develop mainframe-style virtual machine software, augmented by a management suite that would make it cheaper and easier for HSPs to look after their computing environments. The result is ‘Virtuozzo’ and ‘HSPcomplete’.

Virtuozzo is the virtual machine software. It enables commodity Intel-based servers running either FreeBSD Unix or Linux to be partitioned in the same way that mainframe computers have been able to do for many years – but at a much lower cost. Versions for Sun Microsystems’ Solaris Unix operating system and Microsoft Windows 2000 are also planned.

The Virtuozzo software sits as a layer on top of the kernel of the operating system to provide what Beloussov calls a “virtual environment”. Unlike virtual machine software from rival VMWare, Virtuozzo can only run multiple iterations of the same underlying operating system, rather than a combination of operating systems. But Beloussov claims that SWsoft’s approach uses system resources much more efficiently and this means that many more virtual environments – and therefore more applications – can be run on the one server.

HSPcomplete is intended to compliment Virtuozzo. While Virtuozzo provides the environment for running hosted applications, HSPcomplete offers a suite to enable HSPs to manage provisioning, billing and other aspects of their relationships with customers.

There are questions about the long-term potential of the HSP market, which has so far been slow to take off. SWsoft must deal not only with that difficulty but also the inherent challenge of a young Russian company – albeit one with a sales office in San Francisco – competing against better-funded Silicon Valley rivals. At least SWsoft arguably has the technical edge over its rivals.