Parallels Aligns Assets Around the Cloud

Posted on February 25th, by thinkstrategies in Uncategorized. Comments Off on Parallels Aligns Assets Around the Cloud

My travels this week have taken me from Miami to San Francisco, for Parallels Summit and Pacific Crest Securities’ Emerging Technology Summit to hear and see the latest developments in the ‘clouds’.

In Miami, I witnessed the emergence of a key new player in the rapidly evolving cloud computing industry. Parallels is not a new company, but it has recently realigned its various corporate capabilities into a singular focus on cloud computing enablement.

The company is specifically targeting the vast community of service providers — hosting companies, VARs and telcos — that are supporting the IT needs of small businesses with limited or no IT staff.

In short, Parallels is seeking to help these service providers replicate the success of Amazon Web Services (AWS) in the mainstream small business marketplace.

Although AWS has found a very receptive audience among start-ups and enterprise developers, it hasn’t generated much interest with mainstream small businesses which lack IT skills and demand ongoing support. These small businesses are already turning to various hosting companies, telcos and VARs to support their traditional IT needs and would welcome a broader assortment of cloud services, ranging from packaged Software-as-a-Service (SaaS) apps to pay-as-you-go storage and processing power from these same service providers.

Hosting companies, telcos and VARs have recognized this opportunity, but have been unable to fully address it because it has required considerable technical skills and financial resources to build the service delivery infrastructure, provisioning and management engine to support a cloud computing business.

While there are plenty of virtualizations vendors, led by VMware, and business service management vendors, including BMC and HP, they are primarily focused on the enterprise, as well as the major telcos’ operational support systems (OSS). Jamcracker has also struggled trying to help telcos generate meaningful revenue from its SaaS marketplace capabilities.

This has left a gap in the market for an ‘end-to-end’ cloud services solution which Parallels is attempting to fill. Its product portfolio has evolved via a series of acquisitions and organic development to now include the following elements,

  • Server virtualization
  • Management automation
  • Service provisioning & billing
  • SaaS marketplace creation

These elements enable a service provider to build and administer a cloud computing business which can help them win and retain customers who are seeking a strategic source for their widening array of on-demand service needs.

This is a very appealing value proposition for service providers who have found themselves in an increasingly competitive marketplace and need to better differentiate themselves and reduce the risks of customer churn.

With these ideas in mind, Parallels appropriately used the tagline of “Profit from the Cloud” as the theme for this year’s Summit. The timeliness of this theme and Parallels’ newly realigned portfolio was clearly illustrated by the jump in the conference registrants, from 800 last year to 1400 this week, and sponsors, doubling from 30 to 60, including Google, HP, Intel, Novell and Microsoft.

The tone and energy of this event reminded me of the ConnectWise Partner Summit which I attended last year.

It is also important to note that Parallels has added senior executives from Amazon, Microsoft, VMware and other major players to accelerate the company’s growth. I had an opportunity to meet with the executive team during an analyst briefing session the day before the conference. (Disclosure: Parallels paid for my travel expenses for this trip.)

The company has not only aligned its product portfolio around cloud enablement, it has moved its headquarters to the epicenter of cloud innovation, Seattle. This puts the company closer to the pioneer in this market, Amazon, and Parallels’ key partner, Microsoft. 

I couldn’t stay for the entire Parallels conference because I had to fly to San Francisco for the Pacific Crest Securities event where much of the discussion centered on how Amazon is revolutionizing the computing industry in the same way and an assortment of SaaS vendors have disrupted the software industry. (I serve as a member of Pacific Crest’s Mosaic expert program.)

As further confirmation of the timeliness of Parallels’ cloud enablement strategy, Pacific Crest reported that its latest CIO survey found that the organizations it is tracking expect to dedicate upwards of 30% of their software spending on SaaS solutions in 2010. This is two years ahead of the pace which Gartner predicted.

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