Next Generation of Optimized Computing Serguei Beloussov Chairman and CEO, Parallels

Next Generation of Optimized ComputingSerguei Beloussov

Chairman and CEO, Parallels

Parallels – Optimized ComputingTM2

• Over 1000 attendees this year from 60+ countries– 500+ attendees in 2008, 220 in 2007, 150 in 2006

• Over 100 ISVs are here– 20 ISVs attended in 2008

• 50 sessions on 3 tracks– 15 respected external industry speakers– 37 sessions, 2 tracks in 08, 25 sessions in 07

• Special welcome to Parallels Platinum Partners

Welcome to the 4th Annual Parallels Summit


GoldSponsors

Silver Sponsors

Media and Analysts

Exhibitors /

Other sponsors

40+ Sponsors and Exhibitors this year

Mural Consulting, Comodo, BobCares, MailChannels, 4psa, Pinnacle Cart, Spreed, Acumatica, Xandros, HeliconTech, Softlayer, Trustwave, Six Apart, BackupAgent, MX Logic, RatePoint, Moveable Type, HostGator, DataCore, Actual Metrics, TekServe, DemoWolf, FuseMail, Wrike, TrackVia, LinuxMagic

Special Thank You to Our Sponsors


Agenda

Service Provider Industry Update

Parallels’ Vision

Summary


The Impact of Cloud Computing

Since last time…

• Hosting business moving to mainstream of IT– It is harder and more expensive to get “truly new” customers

– More demand for complete solutions (SaaS) vs. infrastructure

• Conversation changing from “Hosting” to “SaaS/Cloud”– Economic crisis accelerating this trend

– More players trying to ride SaaS + Cloud marketing wave

• Giants are certainly grabbing some share – Google, Amazon, Microsoft trying to commoditize clouds with huge

investments


Definition of Cloud

“Cloud computing refers to computing resources being accessed which are typically owned and operated by a third-party provider on a consolidated basis in Data Center locations…. the services that can be delivered from the cloud have expanded past web applications to include storage, raw computing, or access to any number of specialized services” Wikipedia – “Cloud Computing”

http://en.wikipedia.org/

Blue Skies?Clearing the Air on Cloud

Computing and SaaSTomorrow: 9:30-10:15am


• Large portion of computing will move into 5 types of “Clouds”:

• Parallels was founded to create solutions, ecosystem and partner with Service Providers and Businesses to build and operate efficient Services Clouds (initially for Type4, later Type5)

Parallels’ Cloud Vision

– Type4: Channel cloudsof Service Providers – mass market hosting, managed, Telco/ISP, SaaS ISV, Online Services, VAR/SI becoming MSP

– Type5: In-house clouds of large companies, serving subsidiaries, departments, affiliates and sometimes employees and partners

Services CloudsPlatform Clouds

– Type1: Google cloud

– Type2: Microsoft cloud

– Type3: Other clouds (largest IBM and Apple - but also Yahoo!, EMC, HP/EDS, Amazon, Facebook, SAP, Adobe and more)


Cloud How?

Already today Parallels enables Service Providers to offer Cloud Computing Services in any of the above models

More Commoditization

• Amazon

• Dedicated Hosting• VPS Hosting• Managed Hosting

Hyped or Platform CloudsExample

Hosting or Services Clouds Example

Compute Platform

• Google App Engine• Microsoft Azure• Force.com

• Shared Hosting w/ PHP, Tomcat, JBoss, .NET and more

App Platform

• Salesforce• Netsuite • Intuit

• Shared Hosting web apps,ecommerce • Managed Apps, Hosted Exchange

Apps

• Google• Microsoft• Facebook

• Domains• Web Marketing• Secondary Domain Services

Online Services

VARsand TelcosThis is your sweetspot


Weaknesses

Restrictive. Immature. Has not attracted serious ISVs. Momentum?

Internet Giant – Google

• Google targeting SMBs with SaaS– Google Sites (collaboration) and Google Apps (productivity tools)

• Google targeting developers with Cloud Computing– Google App Engine (Python SDK, DataStore, GFS)

– APIs into other Google properties like Earth, Maps, Images, OpenSocial, Android, Gears

Strengths Screen ImagesOnline Ads monopoly - 90%of internet users

Next StepsBuild more apps, extend toolsand frameworks beyond Python


Internet Giant – Microsoft

• Microsoft Office Live and Windows Live and now Azure– Expanding online to developers beyond traditional SMB, Consumers

– Azure includes Live Services, SQL Services, .NET Services, Sharepoint Services, Dynamics CRM Service.

– Azure is in limited beta by invitation, promised to be released mid year

– Plans reported to fold the Windows and Office Live into a single brand

Screen Images

.

StrengthsReaches 100% computer users. Familiar to ISVs and developers

Add VMs Amazon-style and better services. Evolve .NET on Azure

Immature. Late to market. Restricted to .NET. Business model conflict?

Weaknesses

Next Steps


Internet Giant – Amazon

• Amazon Web Services– Elastic Compute Cloud (EC2), Simple Storage Service (S3), Simple Queue

Service (SQS), Simple DB (SDB), Flexible Payment Service (FPS), CloudFront CDN, Windows Server support

– Claims 330,000 developers

Screen Images

.

Strengths1st mover. Gaining momentum. ecosystem. Leading services

Next Steps

Better tools and new Infrastructure services

Expensive. Complex. Less synergies with existing businesses

Weaknesses


• For Businesses: – “In-house Outsourced” IT– You can do it better and cheaper!

• For ISVs:– Cloud is new delivery mechanism– Your new channel. Partner with service providers

• For VARs:– Traditional reseller business model threatened– Opportunity to leverage SaaS to your client base

• For Telco’s: – Margins on traditional businesses getting

squeezed– Cloud is the largest opportunity Value-Added

Services

For Non-Hoster: Cloud Why?

ManagingIT as an Internal Service

Today: 2:05-2:50pm


For Hoster: Cloud Why?

• We’ve established that Cloud is a threat but it is also an opportunity

• Traditional hosting $8.0 bn 2008 and growing at 13.7%

• “Cloud Services” $15 bn 2008 and growing rapidly 27%

• By 2012, “Cloud” will be 9% of all WW IT spending

• And all of that even with the somewhat limited definitions of the “Cloud”


Cloud What?

• What technologies most SMBs need:

• Most SMBs do not need Grid (Burstable Cloud) – How many of your customers overuse resources?

• Marketing the Grid Hype…are customers buying it?– Going after Grid: many of you, in fact!

• Cloud boosts marketing but… be realistic about ROI

In 1998 Today *MessagingFile server / NetworkingProductivity AppsSecurityAccounting systemCRMTime TrackingWeb Presence

Messaging and CollaborationFile server / NetworkingProductivity AppsSecurityAccounting system / ERPCRMTime TrackingWeb Presence, Marketing and eCommerce

*Microsoft Small Business IT Study 2008


More Amazon: EC2 vs ‘Traditional’ Hosting

You can compete and we can help you

Avg VPS $113/mo

Per month VPS1 VSP2CPU Best effort Best effortStorage 20 GB 60 GBTransit 1 TB 2 TBRAM 256 MB 1 GBHoster Price $50 $150 AMZN Equiv* $212 $354

Key Point

Amazon Web Services are more expensive and much more complex

*http://calculator.s3.amazonaws.com/calc5.html#


Service Providers: First Get the Basics Right

Upsell rate to Parallels Plesk Panel ++ can be more than 70%

Marketing

• Do you truly know geographical, vertical and size characteristics of your customers?

• Do you have the right products, messaging, bundles, upsell and pricing for your target audience?

• How profitable are your different offerings?

Your shopping cart drop-off can be less than 1%

• Online – how good is your website?

• Conversion, drop-off, order processing, SEO, behavior stats – are these used?

• How well do you run your sales force?

• Does your support sell?

Sales

Your account density per server can be more than 15,000

• Be super-paranoid about efficiency – Economic crisis is here

• What’s your account density per server?

• Are you fully automated?

• Are your customers happy with your service levels?

Operations and IT


Into the Clouds with the Parallels Automation SaaS

Module for higher ARPUToday: 4:00-4:45pm

Differentiating Your Business Through Mac OS

X Server HostingToday: 2:05-2:50pm

Sustain and Go To Where Platform Clouds Would Not

• Be a one stop shop. Do not allow customers and partners to leave you

– For Customers: Business class email, Office applications, Business Line Applications

– For Partners and Developers: Virtual, Dedicated, Managed and Channel Offerings

– Own the partner, the customer and their data

• Differentiate– Generally: Broadest set of service plans

▪ Many types and kinds of Applications (e.g.: Blackberry, Goodlink, variety of Antivirus and Antispam)

– Better & flexible upgrade path▪ Variety of workloads, sizing options, auto upgrades

– Creative Offerings (e.g.: Mac based offerings)


Agenda


Parallels’ Vision

Summary


Partnerto staycompetitive

Virtualizeor loseprofitability

Automatefully or not

survive

Standardizeor stop

growing

Parallels’ Vision: How to Sustain, Improve and Grow?



Partner: Why Parallels is a Solid Partner for You


Corporate Update• Completely (almost) integrated prior acquisitions • Unified/ streamlined back-office operations (we’re paranoid about efficiency too!)• Continued focus on building partner ecosystem (Biz Dev, Marketing and more)• Stronger Focus on Service Providers (Biz Dev, Marketing)

Highlights• 300K+ servers, 1M+ containers, 12M+ domains*

10M+ accounts, 50M+ mailboxes • Close to 2 million Parallels Desktop for Mac • 30+ Awards in the last 12 months

Major Product Updates• Released Parallels Virtuozzo Containers 4.0 • Released Parallels Plesk Panel 9.0 and Parallels Plesk Billing 6.0• Released Parallels Operations Automation 2.8• Released Parallels Desktop 4.0 for Mac • Released Parallels Server for Mac

Partner: Evolving to be a Better Partner


“We appreciate your feedback!” Alexei Kandikov, VP Support

& Parallels Plesk [email protected]

Restructured support organization• Set up for more sustainable, high-quality

support across all product lines

• Single front line, single second line across all

products, 3rd line product specific

• Optimized shift scheduling

• Incentive program to drive support team

certification: Red Hat, Apple, Microsoft

• 3x number of KB articles (5500+ now)

• Expanded technical overlap team (CRM) to

cover broader set of partners

Relentlessly Improving Support• Overall Satisfaction at 75%+ (COPC) up from

55% 8 month ago. Will improve – to 90%+!

Partner: Parallels Relentless Support


Maximize Partnership Success with the

Parallels Brand Today: 2:55-3:40pm

See them at the Industry Track and

Exhibitor Hall

Partner: Investing in Partnerships

• Parallels Service Provider Partner Program – To- and thru-partner marketing for Parallels Partners– Kerstin Demko, Senior Partner Marketing Manager– Partner Certification & Awards program for ’10 Summit!

• Parallels Technology Partner Eco-System Team– Focused on development of ISV/SaaS ecosystems for hosters– Enable ISVs, Hosters and Users to deliver and use Applications– Soeren von Varchmin, VP SaaS, APS

• Some Recent Partnership Examples– Intel sales and marketing program with hosters

– Parallels Automation SaaS: Open-Xchange, Message Labs,Global Relay, Interspire, keepit.com

– Parallels Partner Marketplace ISVs: Interspire,Linux Magic, Pinnacle Cart, keepit.com, Symantec

– 200+ APS-enabled ISVs



survive

Automate: Parallels End-to-End Automation


Automate: Complete and Integrated

Parallels Business Automation

• Powerful Ordering, Billing, Up-sell• Service Management• Back-end delivery of services

• Focus on your Service• Gain Flexibility• Decrease Churn

Build vs Buy. Why have you built in-house billing systemTomorrow: 3:40-4:25pm

Parallels Operations Automation

• Provision any service or application• Complete Operations Management

(OS, Applications, Resources, DC, etc)

• Increase Revenue per user• Decrease Costs• Reduce Time to Market

Inside Parallels AutomationTomorrow: 1:45-2:30pm

Parallels Virtual Automation

• Delegated Mgt of Virtual Infrastructure• Cross-Platform Management including

Hyper-V, VMware, Parallels Server

• Integrated• Comprehensive• Rapid Time to BenefitParallels Virtualization AutomationTomorrow: 2:45-3:30pm

Parallels Plesk Panel Products

• Server Administration• Application Lifecycle Management• Hosting Automation in a Box

• Easy• Profitable• CompleteParallels Plesk Panel 9.0 and Parallels Panel SMB RoadMap and Update. Tomorrow: 3:40-4:25pm


Into the Cloud with the Parallels Automation

SaaS Module for higher ARPU

Today: 4:00-4:45pm

Customer Needs

Web PresenceEmail E-commerce Collaboration Application Mgmt

Rev

enu

e O

pp

ort

un

ity

$10

$100

$1,000

DomainRegistration

$1-$3

Shared StaticWeb Hosting

$3-$10

Shared DynamicWeb , DB, Apps

$5-$20

Virtual PrivateServers

$15-$100

Dedicated & Managed Server

$100-$500

Business-Class E-mail(e.g. Hosted Exchange,

Open Exchange)$150-$300

Add Business Collaboration(e.g. SharePoint, LCS, VoIP)

$200-$500

Advanced Apps(CRM, ERP, vertical

e.g. SugarCRM, XRMS,webERP)

$250-$1500+

Infrastructure

SaaS

?•Parallels Automation•APS Standard•Correct Marketing Positioning

Automate: Enable SaaS for Higher Revenue


Automate: Parallels Automation Momentum

• Over 160 companies with over 500 automation modules

• Total live sites: ‘04 – 2 ‘05 – 7 ‘06 – 36 ‘07 - 80 ‘08 - 160+

Telco/ ISP

Mass Market Hosting

SaaS

ISV


Inside Parallels Automation

Tomorrow: 1:45 - 2:30 pm

• Stop wasting money developingyour own billing system

– Redeploy resources to revenue generating activities

• Rapidly launch SaaS, Rich email, CRM,collaboration

– Achieve higher customer retention and average revenueper customer

• Launch billing for your resellers

– Boost new customer registrations and lower your costof customer acquisition

• Consolidate silo’d legacy systems

– Respond quicker to the market. Integrate your customer data

• Don’t be confined by your current automation system

– Be more agile. World class billing, ordering, invoicing,service management, business intelligence, help-desk,customer communication, etc.

Let our 350+ automation engineers helpto build value for You and Your customers!

Automate: Let’s Be Very Specific



Virtualize: Complete Virtualization for Hosting


Virtualize: Integrated Virtualization Offering

Hardware Virtualization

(Hypervisors)

•Virtualizes access to hardware•Create many instances of virtual HW•Host OS and each guest has full OS•Parallels Server, VMware ESX, Microsoft Hyper-V

OS Virtualization

(Containers)

•Virtualizes access to OS•Create many instances of virtual OS•Single, standard OS kernel per box•Parallels Virtuozzo Containers,Sun Solaris Containers, OpenVZ

Guest OSGuest OSGuest OS

VM 1 VM 2 VM 3

Virtual Hardware Virtual Hardware Virtual Hardware

Virtual Machine Monitor

Hypervisor or Standard Host OS

Hardware

Hypervisor

Container1

Container2

Container3

Standard Host OS

Hardware

OS Virtualization Layer

OS Virtualization


Parallels Virtualization RoadmapToday: 4:00 – 4:45 am

Virtualize: Integrated Virtualization Offering

•Zero Copy Migrations (Restart)•UI Integration•Single API•Single Command Line•Single Format•Unified Templates/Appliances •Unified Management•Side by side Upgrade•Unified License Keys•Parallels Virtual Automation

Guest OSGuest OS

VM 1 VM 2

Hypervisor and Containers

Hardware

Parallels Server Bare Metal

Container1

Container2

Best of Both Worlds

• Completely integrated OS and Hypervisor solution

• Single integrated management environment

• Easily spawn Containers and Virtual Machines

• Comes as upgrade to Parallels Virtuozzo Containers


ParallelsServer

ParallelsVirtuozzo

ContainersCombined

Hosting & SaaS

VPS, Dynamic Servers

SaaS

Niche Hosting Offerings

Kernel Development Environment

Applications Loading Kernel Drivers

Hosting Desktop OS (Vista, XP)

Hosting Legacy OS

IT Services

Server Consolidation

Disaster Recovery

Virtualize: The Right Technology for the Job


Hypervisor Container Number of VMs/VCs per Server 10 25 Revenue per VPS $50 $50 Costs per server

Hardware cost / (server + networking) $200 $200 Electricity (0.15/kwh) $43 $43

Administration * $50 $50 Total cost $293 $293

Total Cost per VPS $29.3 $11.7 Gross margin per VPS $21 $38

Other costs (Customer acquisition, Support) $15 $15 Net Margin $6 $23

Do not forget - CALCULATE:

• Container Density is 2x to 10x Higher than Hypervisors

• Containers designed specifically for SaaS/ Hosting

• Containers have 4x to 6x lower OS-management costs

*for unmanaged offerings

Virtualize: Right Technology = Profit


Standardizeor stop

growing

Standardize: Parallels Open Platform & APS


Why Choose APS? Today: 2:05 - 2:50 pm

• Parallels eco-system for SaaS– ISVs, Service Providers, Development Communities, and other industry players

• Application Packaging Standard (APS) and Catalog– Enabling ISVs and Hosters to deliver a wide variety of services

– APS is now primary way to deliver applications for all our products

• Marketplace– Upsell your Parallels Plesk Panel customers with set of commercial applications and

increase retention

• Virtual Templates and Appliances– Ready-to-use applications for you

• Automation Development Platform– SDK, Libraries, APIs, Specifications, PTN, development resources

zAPS Standard & Catalog

Virtual Templates & Appliances

AutomationDev Platform

Parallels Open Platform

Ecosystem

220+ Apps

Standardize: APS & Parallels Open Platform

John Eng

erp, mail systems, logos to show that there are manyfocus on quality and not quantitywhich app vendors we partner withadd MS exchange there. part of our ecosystemfocus on quantity later


Collaboration &Communication

Web &E-commerce

Front/Back Office

Infrastructure

Focus is on quality, we will focus on quantity later

Standardize: 250+ Applications and Growing


Agenda


Parallels’ Vision

Summary


Summary

• Cloud is becoming real and Giants are moving in:

– Microsoft CAPEX spending is 800 millions US$ / quarter

– Google CAPEX spending is 400 millions US$ / quarter

– Other Giants have to counter and economy of scale is not only in CAPEX

• “Down to earth” cloud (but not a fog ) is the way to go:

– Do not get too carried away or scared by over-hyped burstable Grids!

– Cloud Services is what you are offering 10+ years; remember the Telco scare

– You can compete and also You must - focus on the basics and differentiate!

• Cloud Services are growing over 2x faster than Traditional Hosting market. Growth specifically is in:

– Virtualized services – be efficient and offer better service level

– Managed services – have more of the customer attention

– SaaS Applications – have more of the customer data and apps


Parallels: How to Sustain, Improve and Grow?

Parallels: Optimized Computingtm




survive

Standardizeor stop

growing


Something Extra: Parallels Desktop Virtualization

Parallels Desktop for Mac• Run Windows side-by-side on Mac OS X

• Mac now represent 10% of US PC market

• Up +30% in market share among your customers

Special Offer from Our Partner Tekserve at the SummitDiscounts on iMac, MacBook, MacBook Pro, MacBook AirAll bundles complete with Parallels Desktop 4.0 for Mac and Microsoft Windows

Parallels Desktop 4.0 for Mac full version, $59.99 MSRP (regular MSRP $79.99)

Parallels Workstation (Lin/Win)• Run multiple OSs on your desktop

• Run your desktop anywhere (Sentillion)


Call to Action

• Visit Hands-on labs for all our products– Parallels Automation– Parallels Virtuozzo Containers and Parallels Server Bare Metal – Parallels Plesk Panel, Parallels Plesk Billing, Parallels Sitebuilder– Parallels Desktop, Parallels Workstation and Parallels Server for Mac

• Learn about APS: www.apsstandard.com– Do not forget our industry track: SaaS starts with software

• Take advantage of special Parallels for Mac Offers

• We do NEED your feedback – Please do suggest at www.parallels.com/feedback

on how we can improve and (maybe) win a prize

• Over 50 Parallels employees are here and we’re very happyto arrange meetings, answer questions and more!

• Just look out for the red shirts in the crowd!

• And remember we need your help at least as much as you need ours!

We can only win as a team! Thank you!


Parallels Punch Party – TODAY!

Taste Parallels Punch during Parallels Plesk Panel 9 Launch Party

Today Feb 3rd evening event!!!

Documents

Next Generation of Optimized Computing Serguei Beloussov Chairman and CEO, Parallels