“Virtualization technologies are only part of our automation platform.”
Parallels, with the name SWsoft until 2008, is rightfully considered one of the pioneers of the virtualization market for x86 computers and is now a leading player in this field. However, besides the original technological solutions, it has a rather interesting history of business development, including from a national-geographical point of view. It was from this aspect that PC Week / RE observer Andrei Kolesov began a conversation with the founder, chairman of the board of directors and Parallels CEO Sergey Belousov.
PC Week: What definition, in your opinion, is most appropriate for your company - American, Russian, international? Or, maybe, this question is in principle uninteresting for the IT market in the context of its globalization?
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Sergey Belousov: The question is relevant in principle, but I would not call it of paramount importance. Indeed, everything is clear, if the company's work is completely limited to one country: there are its owners, customers, employees and partners. And everything is much more complicated if the enterprise has an international structure of activity. To build a strategy for working with such a company, customers and partners should at least be aware of its organization. For example, Microsoft is a global corporation, but still it is American. Not only because it pays taxes there and legally obeys US law. More importantly, its leadership and management structures are located there.
From this point of view, Kaspersky Lab is a Russian company, although its main sales are to other countries. But Russia has its development centers, and all decisions are made here. With Parallels, the situation really looks much more complicated. The company was established by Russian engineers, but who, due to circumstances, were working at that moment in Singapore. The main market for us for many years was the USA, although today its share in the total sales of Parallels worldwide accounts for about 50%. Today, all developer resources are concentrated in Russia, but strategic development, marketing, sales and finance management are carried out from abroad.
Actually, it seems to me wrong to use national coloring for marketing purposes. Although politicians and the media love to do it. I believe that Parallels is an international company, albeit with a strong link to Russia. But I want to emphasize that for a medium-sized software company, and even more so on a large scale, there cannot be any one geography of presence. Such companies operate all over the world due to the fact that the software easily penetrates various markets, it is easy to download it via the Internet regardless of the location of the user. From the standpoint of partners and customers, other things are key: we offer the most advanced technologies, moreover, already recognized in the world, including from the leaders of the IT market; We have a stable developing business.
PC Week: And what if we approach the same question a little from the other side. We quite often hear complaints from Russian developers, who release their products both to the domestic and foreign markets, about some problems in their business that should be solved at the state level. Do you feel such difficulties?
S. B.: I will answer briefly: we are not very much affected by such problems, much less than other local software developers. But at the same time, of course, there are things that could help us directly. For example, the simplification of tax legislation, which in Russia is more complicated than in other countries. This is very important, especially for technology companies. Next is the investment in education by the state. Human resources need to be constantly restored, for this a good higher school is needed, which only the government can support, since this is a sphere with very long terms of return on the funds invested in it.
Another point - labor law. In Russia, it is largely focused on factory workers and does not take into account the specifics of the sphere of high, high technologies. In my opinion, we do not have clear regulations on five main areas of labor law: probation and notification deadlines (due to dismissal), agreements on prohibition of luring personnel, customers and partners, confidentiality agreements regarding the subject of development, intellectual property rights (parts code) and non-competition.
Of course, it is necessary to create a more favorable climate for the work of software companies. For example, in Russia it is difficult to make a start-up project, for this the engineer must become a businessman, and a very “advanced” one, because he will have to solve a lot of organizational and legal issues. In Israel or the US, all this is much simpler. There are clear mechanisms for attracting investment, and in general the institution of venture financing is much more developed.
PC Week: Let's move now to technology. Your company in the corporate IT market is known primarily for its virtualization technology, Virtuozzo, with the creation of which you started your business ...
S. B.: Yes, in January 2000 we painted a picture, which to this day is the technological plan of our company’s work. There are Parallels Virtuozzo Containers (in the future Parallels Containers) and Parallels Automation (previously - HPSComplete), with which we started our activities, cluster management software (we are just starting to deliver it), which is under development . I want to clarify: virtualization technologies are only a part, although very important, of a common automation platform that we have been creating for many years. You do not need to be a prophet to understand that ultimately the infrastructure management systems will be important. Parallels is positioning itself as a company for the production of automation solutions.
PC Week: I would like to focus on virtualization. Today there are two main approaches to creating virtual environments. The first is virtual machine support technology, virtualization at the hardware level, which is now associated with the concept of a hypervisor. The second is virtualization at the kernel level of the OS, for which the term “containers” has recently been used. So: why do many developers deal with hypervisors, and containers, as sometimes stated in your press releases, are only Parallels? Do your developers know technological secrets that are inaccessible to other companies?
S. B: This is a multifaceted and deep problem, but I will try to reveal it schematically, without going into detail. First of all, we are engaged in containers not only, this direction has recently been developed by Sun in its Solaris OS. We differ from it not only by the fact that we were pioneers in the development of this approach to virtualization, but also by the fact that we are an independent multiplatform player. Basically, we do not ship the OS, work with different hardware systems and support the two most popular software platforms - Linux and Windows.
The advantage of containers is the very high efficiency of using computational resources, which is significantly more significant than that of hypervisors. The limitation of containers is the use of a single OS kernel on a single server. But there is another problem. Creating multifunctional container technologies is more difficult than developing hypervisors. Because, firstly, the OS - it is much more complex systems than hardware. And secondly, more closed products, which are not very easy for an external developer to understand.
I know that a number of leading software vendors at one time studied the question of whether to create containers. Then they came to the conclusion that it is difficult and it is hardly possible to create a reliable effective solution. We once decided to take the risk and proved over the years the realism of this approach. And, by the way, the same companies that once rejected containers, today are changing their assessment with regard to their prospects.
Virtualization is always associated with changes in the OS. We started creating Parallels Virtuozzo Containers with Linux for a number of reasons, including because Linux is open source. But the development of containers for Windows - it was almost a crazy idea, especially for an independent developer who has to understand this complex and closed system. Such a task without the help of Microsoft seems completely unrealistic, but we solved it. And what is important - as we move into the depths of Windows, we received more and more significant support from Microsoft, and now we can talk about fairly close cooperation between our companies.
PC Week: Then we will look at the question of the viability of technology in terms of business results. You started to master the field of virtualization of x86-servers in the late 90s, almost simultaneously with VMware. And look at the financial performance of 2007: according to IDC, VMware earned almost $ 1.3 billion here, and your company earned $ 90 million. Maybe this reflects a non-optimal choice of a technological solution on your part?
S. B: First of all, VMware is one of the unique phenomena on the IT market that is difficult to equal, and we consider the dynamics of its development to be very successful. But at the start of VMware had a number of important advantages. First, it still entered the market three years earlier than us. Secondly, it was based on a solid technological reserve that already existed. Thirdly, due to circumstances, she was able to immediately get a serious investment. Fourth, this company was initially focused on a broader market of corporate customers. And Parallels concentrated on the market of service providers.
But at the same time, with obviously very fast development of the company at the start and aggressive behavior on the market with respect to partners and customers, this company is now reaping the “fruits” of such a strategy. Stock price fell below placement. They are constantly reducing revenue forecasts, leaving key employees and partners. Actually, taking into account these circumstances, and the fact that other companies were already working in this direction, and it was also possible to assume the emergence of fierce competition with leading IT players, we chose for ourselves, perhaps, a more difficult, but long-term, path. .
We were engaged in a rapidly emerging segment of web hosting providers where Linux was widely used and where support for heterogeneous computing environments on a single computer was not needed. The next stage is the implementation of Parallels Virtuozzo Containers for Windows. This allowed us to solve two problems. Firstly, to enter the corporate information systems segment, and secondly, to further strengthen in the field of web hosting, where the use of Windows has expanded rapidly. But development for Windows turned out to be much more difficult than it seemed to us at first; we only issued the first version of the product at the end of 2005 *.
Once again I want to emphasize: we started to work in a rather narrow niche area of the IT market. In the world then there were 20-30 million servers, of which about 100 thousand, that is less than one percent, were passed to service providers. Moreover, the technology of containers was suitable mainly for hosting. This is the main reason why the major players were not interested in this direction of virtualization.
This is what we have now: about 50 million servers, and of these, at least 10% is used for hosting. This is a very solid market. But more importantly, container technologies are becoming more and more popular among corporate clients, for whom the use of a single operating core is quite suitable for solving server consolidation tasks. And in terms of efficiency (the need for additional resources, management time), containers are significantly ahead of hypervisor technology.
PC Week: If you look at the list of major participants in the virtualization market, it is not difficult to see that Parallels is the only independent player. Does this mean that in the very near future it can share the fate of XenSource?
S. B.: We are not going to be sold to someone, we simply do not set ourselves such a business task. Although, of course, if we are offered a serious amount, we will consider this offer.
PC Week: The benefits of virtualization technology seem so obvious that it would seem that customers have to race to introduce them. But we don’t see such activity on their part, at least in our country. What is the problem?
S. B.: One of the main ones is mentality, established habits. After all, everyone knows that you need to play sports (this is useful!), But the percentage of people who really allocate time to it is very small. So it is in IT: for the effective use of virtualization technologies, it is necessary to change the approaches to the organization of IT infrastructure and business applications. There are certain restrictions on the use of virtual machines. For example, while these tools are poorly suited for solving high-performance problems with parallel computing for a large number of processors. Reducing costs and total cost of ownership is also not so easy. There is also a personnel problem - more highly qualified IT staff is required.
PC Week: Now, from the world of problems back to our country. You attempted to enter the Russian market in the second half of 2002. But very quickly your marketing activity went down to almost zero here. Since the end of last year, there have been new and, apparently, more decisive steps by Parallels in Russia. And what happened then, six years ago? Our market was not ready to use your funds?
SB: And the market, and we were not ready then. The segment of hosting providers was very small, and we had nothing to offer to corporate clients. Now the situation is significantly different: the demand has increased significantly, the range of our products has expanded. The sales volume on the Russian market is not yet very large, but it reached the critical mass when it became interesting for our business, and we intend to work more actively here.
PC Week: Thanks for the chat.
* In 2003, SWsoft had intended to create Virtuozzo for Solaris, but froze these plans, since Sun itself took up this development. - Approx. ed.
PC Week: What definition, in your opinion, is most appropriate for your company - American, Russian, international? Or, maybe, this question is in principle uninteresting for the IT market in the context of its globalization?
')
Sergey Belousov: The question is relevant in principle, but I would not call it of paramount importance. Indeed, everything is clear, if the company's work is completely limited to one country: there are its owners, customers, employees and partners. And everything is much more complicated if the enterprise has an international structure of activity. To build a strategy for working with such a company, customers and partners should at least be aware of its organization. For example, Microsoft is a global corporation, but still it is American. Not only because it pays taxes there and legally obeys US law. More importantly, its leadership and management structures are located there.
From this point of view, Kaspersky Lab is a Russian company, although its main sales are to other countries. But Russia has its development centers, and all decisions are made here. With Parallels, the situation really looks much more complicated. The company was established by Russian engineers, but who, due to circumstances, were working at that moment in Singapore. The main market for us for many years was the USA, although today its share in the total sales of Parallels worldwide accounts for about 50%. Today, all developer resources are concentrated in Russia, but strategic development, marketing, sales and finance management are carried out from abroad.
Actually, it seems to me wrong to use national coloring for marketing purposes. Although politicians and the media love to do it. I believe that Parallels is an international company, albeit with a strong link to Russia. But I want to emphasize that for a medium-sized software company, and even more so on a large scale, there cannot be any one geography of presence. Such companies operate all over the world due to the fact that the software easily penetrates various markets, it is easy to download it via the Internet regardless of the location of the user. From the standpoint of partners and customers, other things are key: we offer the most advanced technologies, moreover, already recognized in the world, including from the leaders of the IT market; We have a stable developing business.
PC Week: And what if we approach the same question a little from the other side. We quite often hear complaints from Russian developers, who release their products both to the domestic and foreign markets, about some problems in their business that should be solved at the state level. Do you feel such difficulties?
S. B.: I will answer briefly: we are not very much affected by such problems, much less than other local software developers. But at the same time, of course, there are things that could help us directly. For example, the simplification of tax legislation, which in Russia is more complicated than in other countries. This is very important, especially for technology companies. Next is the investment in education by the state. Human resources need to be constantly restored, for this a good higher school is needed, which only the government can support, since this is a sphere with very long terms of return on the funds invested in it.
Another point - labor law. In Russia, it is largely focused on factory workers and does not take into account the specifics of the sphere of high, high technologies. In my opinion, we do not have clear regulations on five main areas of labor law: probation and notification deadlines (due to dismissal), agreements on prohibition of luring personnel, customers and partners, confidentiality agreements regarding the subject of development, intellectual property rights (parts code) and non-competition.
Of course, it is necessary to create a more favorable climate for the work of software companies. For example, in Russia it is difficult to make a start-up project, for this the engineer must become a businessman, and a very “advanced” one, because he will have to solve a lot of organizational and legal issues. In Israel or the US, all this is much simpler. There are clear mechanisms for attracting investment, and in general the institution of venture financing is much more developed.
PC Week: Let's move now to technology. Your company in the corporate IT market is known primarily for its virtualization technology, Virtuozzo, with the creation of which you started your business ...
S. B.: Yes, in January 2000 we painted a picture, which to this day is the technological plan of our company’s work. There are Parallels Virtuozzo Containers (in the future Parallels Containers) and Parallels Automation (previously - HPSComplete), with which we started our activities, cluster management software (we are just starting to deliver it), which is under development . I want to clarify: virtualization technologies are only a part, although very important, of a common automation platform that we have been creating for many years. You do not need to be a prophet to understand that ultimately the infrastructure management systems will be important. Parallels is positioning itself as a company for the production of automation solutions.
PC Week: I would like to focus on virtualization. Today there are two main approaches to creating virtual environments. The first is virtual machine support technology, virtualization at the hardware level, which is now associated with the concept of a hypervisor. The second is virtualization at the kernel level of the OS, for which the term “containers” has recently been used. So: why do many developers deal with hypervisors, and containers, as sometimes stated in your press releases, are only Parallels? Do your developers know technological secrets that are inaccessible to other companies?
S. B: This is a multifaceted and deep problem, but I will try to reveal it schematically, without going into detail. First of all, we are engaged in containers not only, this direction has recently been developed by Sun in its Solaris OS. We differ from it not only by the fact that we were pioneers in the development of this approach to virtualization, but also by the fact that we are an independent multiplatform player. Basically, we do not ship the OS, work with different hardware systems and support the two most popular software platforms - Linux and Windows.
The advantage of containers is the very high efficiency of using computational resources, which is significantly more significant than that of hypervisors. The limitation of containers is the use of a single OS kernel on a single server. But there is another problem. Creating multifunctional container technologies is more difficult than developing hypervisors. Because, firstly, the OS - it is much more complex systems than hardware. And secondly, more closed products, which are not very easy for an external developer to understand.
I know that a number of leading software vendors at one time studied the question of whether to create containers. Then they came to the conclusion that it is difficult and it is hardly possible to create a reliable effective solution. We once decided to take the risk and proved over the years the realism of this approach. And, by the way, the same companies that once rejected containers, today are changing their assessment with regard to their prospects.
Virtualization is always associated with changes in the OS. We started creating Parallels Virtuozzo Containers with Linux for a number of reasons, including because Linux is open source. But the development of containers for Windows - it was almost a crazy idea, especially for an independent developer who has to understand this complex and closed system. Such a task without the help of Microsoft seems completely unrealistic, but we solved it. And what is important - as we move into the depths of Windows, we received more and more significant support from Microsoft, and now we can talk about fairly close cooperation between our companies.
PC Week: Then we will look at the question of the viability of technology in terms of business results. You started to master the field of virtualization of x86-servers in the late 90s, almost simultaneously with VMware. And look at the financial performance of 2007: according to IDC, VMware earned almost $ 1.3 billion here, and your company earned $ 90 million. Maybe this reflects a non-optimal choice of a technological solution on your part?
S. B: First of all, VMware is one of the unique phenomena on the IT market that is difficult to equal, and we consider the dynamics of its development to be very successful. But at the start of VMware had a number of important advantages. First, it still entered the market three years earlier than us. Secondly, it was based on a solid technological reserve that already existed. Thirdly, due to circumstances, she was able to immediately get a serious investment. Fourth, this company was initially focused on a broader market of corporate customers. And Parallels concentrated on the market of service providers.
But at the same time, with obviously very fast development of the company at the start and aggressive behavior on the market with respect to partners and customers, this company is now reaping the “fruits” of such a strategy. Stock price fell below placement. They are constantly reducing revenue forecasts, leaving key employees and partners. Actually, taking into account these circumstances, and the fact that other companies were already working in this direction, and it was also possible to assume the emergence of fierce competition with leading IT players, we chose for ourselves, perhaps, a more difficult, but long-term, path. .
We were engaged in a rapidly emerging segment of web hosting providers where Linux was widely used and where support for heterogeneous computing environments on a single computer was not needed. The next stage is the implementation of Parallels Virtuozzo Containers for Windows. This allowed us to solve two problems. Firstly, to enter the corporate information systems segment, and secondly, to further strengthen in the field of web hosting, where the use of Windows has expanded rapidly. But development for Windows turned out to be much more difficult than it seemed to us at first; we only issued the first version of the product at the end of 2005 *.
Once again I want to emphasize: we started to work in a rather narrow niche area of the IT market. In the world then there were 20-30 million servers, of which about 100 thousand, that is less than one percent, were passed to service providers. Moreover, the technology of containers was suitable mainly for hosting. This is the main reason why the major players were not interested in this direction of virtualization.
This is what we have now: about 50 million servers, and of these, at least 10% is used for hosting. This is a very solid market. But more importantly, container technologies are becoming more and more popular among corporate clients, for whom the use of a single operating core is quite suitable for solving server consolidation tasks. And in terms of efficiency (the need for additional resources, management time), containers are significantly ahead of hypervisor technology.
PC Week: If you look at the list of major participants in the virtualization market, it is not difficult to see that Parallels is the only independent player. Does this mean that in the very near future it can share the fate of XenSource?
S. B.: We are not going to be sold to someone, we simply do not set ourselves such a business task. Although, of course, if we are offered a serious amount, we will consider this offer.
PC Week: The benefits of virtualization technology seem so obvious that it would seem that customers have to race to introduce them. But we don’t see such activity on their part, at least in our country. What is the problem?
S. B.: One of the main ones is mentality, established habits. After all, everyone knows that you need to play sports (this is useful!), But the percentage of people who really allocate time to it is very small. So it is in IT: for the effective use of virtualization technologies, it is necessary to change the approaches to the organization of IT infrastructure and business applications. There are certain restrictions on the use of virtual machines. For example, while these tools are poorly suited for solving high-performance problems with parallel computing for a large number of processors. Reducing costs and total cost of ownership is also not so easy. There is also a personnel problem - more highly qualified IT staff is required.
PC Week: Now, from the world of problems back to our country. You attempted to enter the Russian market in the second half of 2002. But very quickly your marketing activity went down to almost zero here. Since the end of last year, there have been new and, apparently, more decisive steps by Parallels in Russia. And what happened then, six years ago? Our market was not ready to use your funds?
SB: And the market, and we were not ready then. The segment of hosting providers was very small, and we had nothing to offer to corporate clients. Now the situation is significantly different: the demand has increased significantly, the range of our products has expanded. The sales volume on the Russian market is not yet very large, but it reached the critical mass when it became interesting for our business, and we intend to work more actively here.
PC Week: Thanks for the chat.
* In 2003, SWsoft had intended to create Virtuozzo for Solaris, but froze these plans, since Sun itself took up this development. - Approx. ed.
Source: https://habr.com/ru/post/42029/
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