Odin a year later: Oleg Melnikov - about what happened after the purchase of Parallels cloud division

In December 2015, one of the divisions of Parallels, a Russian IT software development company in the field of automation and virtualization of hosting services, was purchased by Ingram Micro international distributor. The amount of the transaction exceeded $ 100 million. This is a logical continuation of cooperation, which began in 2013, and in 2014 Ingram Micro became a minority shareholder of a Russian company.



In accordance with the terms of the purchase agreement, the Odin Automation platform and related technologies for managing cloud services, as well as all rights to the Odin trademark and intellectual property, became the property of Ingram Micro.



Almost a year has passed since then. The head of Odin and co-founder of Parallels, Oleg Melnikov, who joined Ingram Micro after the takeover, told us about the changes that had taken place, about the period of adaptation to Ingram's corporate culture and plans for the development of the division in the cloud services market.

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Oleg, do I understand correctly that you came to Ingram Micro after she bought the company Odin (Parallels subsidiary)?



Speaking from the very beginning, in 1996 SWsoft was founded by six graduates of MIPT. The company was engaged in the production of software. We had two product lines - virtualization and automation. We even then began to do things that are now in fashion - they are called cloud. Gradually, we began to sell our products around the world.



Today we have tens of thousands of virtualization clients. Worldwide distributed several million servers with the product Virtuozzo and several hundred products, which were called at the time Parallels Automation, and now - Odin Automation. Clients are mainly from the telecom industry - in Spain, Mexico, the Netherlands, Norway, Australia, and Singapore. Any major telecom in the world (except, perhaps, the Russian Rostelecom and British Telecom) is our client.



A company Ingram Micro for over 30 years. This is a huge company with a turnover of $ 42 billion, which has 28 thousand employees in more than one hundred countries of the world. Ingram Micro is engaged in distribution. What is distribution? For example, CISCO never directly sells its hardware. Similarly, Microsoft, until recently, did not directly sell its software. The distribution system is arranged like this: on the one hand, there are manufacturers of hardware or software, which in turn give products to distributors at low prices. There are six major distributors in the world, including Arrow, TechData and Ingram Micro, and 10-15 smaller ones.



Then distributors give products to the so-called value-added resellers. These are smaller system integrators that, from software and hardware components, make up solutions for clients (build a network or system, for example) or sell servers and software separately.



What are distributors for? Large companies do not like to work with small customers. It’s hard to imagine that CISCO was selling a Switch of some 20 people. Instead, CISCO gives Switch to Ingram Micro, for example, which has warehouses and logistics in 160 countries of the world, and also sellers in 100 countries of the world. Ingram Micro has a complex system of pricing, distribution, delivery, which has been formed for 30 years. At that time there were about 200 distributors, and now there are about a dozen of them left.



What has been going on for the past five years? People stop buying hardware and software. Instead, it is rented. Instead of buying an iron server and dragging it to their office, people can rent a virtual machine on Digital Ocean, on Azure, or AWS.



I still remember when in our office there were file servers under the table, where we put the files. Now nobody does this madness: you open a browser, buy Dropbox, send logins to five of your employees and people are sewing files, folding photos.







The system of distribution, production of software and hardware varies greatly, there is a revolution in the consumption of these services. Companies that previously sent "boxes" with servers or with software, notice that the revenue stream goes, the whole system breaks down. Naturally, they want to continue to participate in the process, but people began to consume IT products and services in a new way.



Three years ago, Ingram Micro bought our system - Odin Automation. They launched it on four sites. On this system in 19 countries of the world they sell cloud-services. Ingram Micro now sells about 200 different online services.



After a while they realized that they needed not only the software that they had purchased from us. They needed the expertise that our developers have. They were very surprised when they learned that this product was almost completely developed in Russia, because they had never worked here before.



At the beginning of last year, they approached Parallels with an offer to purchase the Odin business. On December 19, the transaction was closed, and I, together with 516 employees of Parallels, moved to work at Ingram Micro.



With this takeover, did Ingram Micro have an office in Moscow?



Ingram Micro did not deal with distribution in Russia, nor does it. In fact, the whole structure of Odin in Moscow is preserved: all groups of developers, testers, managers, financiers, accountants, lawyers remained unchanged. We just left the office where all the departments of Parallels (Virtuozzo, Parallels Desktop, Plesk control panels) were sitting, because Ingram needed to bring the room to its own international standards - more space for one person, more electronics, plasma displays.



Ingram Micro has no development departments anywhere else. For them, as we were the only experts in the field of building cloud systems and automation, we are still to this day. This purchase was not an ordinary takeover; they bought a team that is their only cloud solution developer.



Has your role changed in the new structure?



No, not changed. At Parallels, I was one of the founders, was a vice president, and was responsible for the Odin Automation business unit. Ingram Micro, I am also a vice president. Everything that is being done in this company in the direction of cloud technologies is in my area of ​​responsibility.







What changed in Odin after changing ownership and conditions?



In the daily life of the developers, nothing has changed. If we, for example, held a summer outdoor corporate event in Novosibirsk every year (we also have an office there), then we continue to do so. If people used to bring cakes and pizza to the office or play ping-pong and table football, they continue to do so.



On the other hand, something has changed. Ingram has complex rules about how we should behave and react to events in the world. If earlier some kind of borderline, dubious jokes could be heard in the office, now people have been told how to behave more correctly, which can offend colleagues and interlocutors. Ingram Micro has a whole department that deals with ethical issues: offices are scattered across continents, in every country there are many cultural peculiarities and differences.



The European does not always understand the American, so there are people in the company who help the whole company come to a common cultural denominator. The company spends a lot of time and money to bring all employees, including Russian, to a certain cultural code, which is in other countries. Let me give an example: if in Russia you can say “the girl (girl) answered me by phone”, then in other countries the word “girl” (in relation to a colleague) is considered an insult. Such small things are not noticed by people who grew up and live in Russia, and in the States this is an important part of the cultural code.



During the past 15 years, many of our employees went on business trips abroad and periodically found themselves in situations where people were offended at us, and we did not understand why. Now we have a formulated ethical code based on many years of experience of a global corporation.



From other innovations: the team has a clear distribution of roles. Previously, we were a startup in which many, however, worked for 10-15 years. At first we worked in a company of 10 people, then from 15, out of 30 ... And before that there was such a situation: when something doesn’t work for you, you go and “shake a tree” to fix it. Now for any task there are roles. There are product managers who can be told about the problem. If earlier we had a mistake on the website, it was possible to approach the webmaster and say: “Change, please”. Now there is a big marketing department and responsible people who are engaged in it. So, in a sense, life has become much simpler.



I personally had a harder time working. Including because I had to sleep a little: something happened in Brazil, or there were some problems in India, or something was stuck at customs. And now this is not my headache.



Cloud-product Odin Automation developed Parallels - a Russian company. After all, it leaves its mark on how the product develops on the international market, how does it feel?



In fact, we had a very interesting story: Parallels organized in Singapore. We grew to the first 50 employees there. We brought programmers to Singapore, and the internal culture was formed there. When we returned to Russia and recruited 100, 200, 300, 400 employees, we were not literally a Russian company. We had only 2-3 clients from Russia. From the first day, the company sold to foreign customers: we collected software requirements from all over the world, helped us to install and configure software all over the world, and cooked in a culture of completely different countries. If you saw how meetings are held in our company, you would understand that these are not meetings, but “meetings” (meetings).







We even have a completely different language. To place the usual terminology on the slides (if, for example, we are preparing to participate in a local conference), we have to speak in bird language. When I returned to Russia, for a long time I could not understand what the word “Data Center” means. It turns out that this data center is now called that.



What are the prospects opened after the takeover?



First, Ingram Micro has a much larger working capital. Parallels had a turnover of several hundred million US dollars, and each time it was necessary to plan the budget very carefully at the beginning of the year. Working capital needed to be divided between four business units. Get a large amount of money was just nowhere. And Ingram Micro has a working turnover of $ 42 billion, so it is much easier to get domestic investments in solving the problem.



Secondly, when we developed our automation system, we faced difficulties in integrating with new services. For example, we come to Dropbox and say: “Let's integrate with you”. Of course, they didn’t accept our offers very willingly. And now Ingram Micro comes to them and says: “Let's sell Odin Automation not only through 30 telecoms, but also through 200 thousand of our resellers”. Therefore, DropBox has a very large sales channel.



As a consumer, it’s easy for me to come to Dropbox directly and buy services from them. And your clients seem to have no difficulty in this process, is it not so?



Not this way. By the way, we very often encounter such an opinion in Russia. Probably, the Russian mentality has a little influence on the perception: there is always some acquaintance or friend who can sell you something and help you to configure it if something does not work out. Here, in Russia, there are a lot of “programmers” boys (in fact, they are system administrators) who can stick wires into a printer and stretch the grid, and they are cheap. In America or Europe, IT professionals cost a lot of money. There in the company of 10 accountants or lawyers there is not a single sysadmin. They don’t even understand if they need to buy Dropbox or something else. Moreover, they do not have time to figure out which Dropbox they need, how they can make it possible to fumble all the files together, how to set up access rights, so that some can be put, and others - put and removed.







Now imagine that 10 accountants are sitting and thinking: “We need to start working, but we do not have mail. We still probably need our domain, and also a website. Still need to somehow print and customers show demos. Where to go?". And a reseller calls them and says: “What are you doing? Accounting? How many of you? Ten people? Well, you need this and this. Here is a link to the page, go and buy everything. ”



So, the head of the office, who doesn't understand anything in IT, goes to the Ingram Micro website, presses the “buy” button and says: “We need a domain for the company, 10 mailboxes with a total size of 10 GB, Dropbox at 1TB, so that we can extract the files and Symantec is still needed ... ”He clogs the card number and enters our control panel. There he scores the names of 10 employees, indicates by ticks, which services each of these 10 employees needs and that's all. After that, people receive email with logins and ten passwords to different services, automatically created for each of them. They do not need to log into Dropbox, create 10 accounts there, then go to Symantec and there, too, create 10 accounts, separately pay for access, and so on. This is how our automation works.



For example, the business chief of this company is to help to issue taxes to US citizens or companies. When I pay taxes in America, one hour of a good specialist in filling out a tax return costs me $ 300-400. And this accountant has a choice: either spend five hours to separately buy all the services for each employee, register them and set up, or serve customers and get $ 1,500.



Our automation system solves technical issues in any company and allows everyone to do their work.



What are your future plans for the development of the platform?



Sales of hardware and software will decrease. The task of our team is to transform the turnover ($ 42 billion) in traditional hardware and software into a turn from virtual machines, online-storage and SaaS. This is a very difficult task. To do this, we need to integrate our platform not only with large software vendors - with Microsoft Azure, AWS, Symantec, Dropbox, and so on - but with hundreds, thousands of smaller vendors. In addition, we need to teach how to use our platform not only small and medium businesses, but all types of businesses that today consume some IT services - a factory, a small division of a corporation, a flower shop, and so on.