Finding the Parallels path

Serguei Beloussov, president and chief executive of virtualisation company SWsoft, speaks excellent English with a Russian accent and admits to coming from "many different countries". His company has successfully built a niche in the burgeoning virtualisation market.

Parallels is SWsoft's virtualisation product and it is much admired by Mac users who form its biggest market. But while Beloussov likes the Mac market, he has plans to expand into other areas.

When ZDNet.co.uk caught up with Beloussov, he hinted at the company's "ambitious" expansion plans, but explained that we will have to wait until January to find out more. Instead, he sketched his vision for the future of IT, which includes the idea that the future doesn't have to be dominated by Microsoft — or any single operating system vendor for that matter. For Beloussov, the IT world of the future is one of components and libraries.

Q: What is the future for SWsoft and Parallels?
A: We have changes coming, but what those changes are, I really can't talk about. It is going to be a very different company, but I can't talk about it. It will be the same people, same company, but different. I can talk more about it in January.

Can you outline a few things? For example, the name of your company is confusing — there is both SWsoft (the parent company) and Parallels (the main, and only, product).
Parallels will be fully integrated into the company. [Editor's note: SWsoft announced on Wednesday 13 December that it had changed its name to Parallels.] But what happens in January, I can tell you, is that that confusion will go away. Overall I think we are doing very well.

What is your view of the virtualisation market moving forward?
At the moment, in the IT market you have two types of consumption [corporate and consumer]. Corporate consumption is drying up. So in the next five, 10, 15 years, we will see that replaced by software as a service (SaaS): online services. This will be a very, very significant part of the consumption, and that is the promising area for us.

For us, there is no player that is fully addressing the infrastructure. We will see in the future that things are not just outsourced like they are today.

The off-the-premise data centre is becoming more and more relevant. It was a small part of data operations but it is becoming much more significant. In five years it will have become normal. So, for companies like Microsoft and EMC, things will change. They are significant because they use proprietary infrastructures. So many people do not want to use proprietary infrastructures. Companies like Google and Amazon, they use Linux. They are the off-the-premise players.

So, for us, we see demand for off-the-premise and on-the-premise. At the moment, that demand is about equal, but we will see the demand for off-the-premise become much larger.

Where is your market exactly?
In the space where we provide a complete infrastructure for hosted and service provider companies.

Overall, in the off-the-premise area, we have completed a number of acquisitions, all small ones. We will complete another shortly. We are by far the largest player where the requirement is for products for the corporate infrastructure and some specific applications. It is in those areas where we provide a complete infrastructure for software and service provider companies.

One issue is that, because we are such a small company, we are very much dependent on product releases. The current products are doing very well, but we will be very dependent on the new products. They are not yet due.

When will the corporate changes happen?
They are due in January because of the changes that are happening around the company.

At the moment [SWsoft] is a company that has small revenues because of price suppression in the market. So [we] cover a small segment in the service provider and application space. For our product to compete, we have to spend all of the money on sales and marketing and [research and development]. Small companies have to spend their money in those areas. The market for our company is to help other companies stop having to spend that money, and then they can compete.

So how do you see the future in virtualisation panning out?
We see the future as virtualisation and automation. Now automation is a very sensitive subject. And virtualisation is a very strange place, because [within virtualisation] there is an operating system and there are management tools.

Our vision is there, and also to become a significant player in the operating system space and the platform space by offering a platform which, even though...

...virtualisation is not very robust and does not have a lot of tools, is pretty good at providing service capabilities.

So it has capabilities such as migration, management, partitioning and isolation of workloads onto a single server. Now, because it is so good, it can take market share out of operating systems such as Windows and Linux.

So our vision is quite different from what we have been doing, and that is to provide the same capabilities that people have in their own proprietary operating system, such as Windows, Linux or Mac OS.

So you will replace Windows in the future?
We are not replacing Windows, Linux or Mac OS. We are enhancing them. It is that enhancing part that will lead to automation. It is that capability to enhance the operating system and provide capabilities such as isolation and partitioning that is important.

It is also the same for VMware, but the problem for VMware is that they also provide their own platform. With the VMware platform, you don't need Windows and you don't need Linux. The long-term vision of VMware is for virtual appliances with a virtual infrastructure, and you won't need the other operating systems.

Do you see that happening? Do you see VMware replacing Windows and Linux?
They will not replace them across the board, no, but in some things, yes.

How exactly will that happen?
Windows is just an operating system and, in some cases, people are already replacing it.

Look at a kind of end-to-end scenario, where you don't need Windows at all. So you buy a computer from Dell and you put an appliance on it with somebody's application running on it with some other software — and that is the most dangerous scenario. Now there can be a number of applications where you just download VMware with applications.

Now are those applications appliances? It is just a matter of using a different word. They are applications today [but] they could be appliances. You can take a special interface library and would have a user library, a compiler library, a database application library. Now, in modern applications, 20 percent is probably from the vendor and 80 percent is made up of different libraries. Look at Linux. That is effectively just another set of libraries.

So where does that take your vision?
Our vision is that we don't really want to become a platform vendor. We don't think it would be very good because it is much more complex. If we stay down here and work in a limited way then we can get the channels, we can have our ecosystem. But if we go up there against Microsoft in a big way — well, you can't win, because Microsoft has the assets.

So you don't think VMware is challenging Microsoft in operating systems, its core ground?
If it stays where it is then it is not challenging them. Microsoft has all the channels and it has tens of billions of dollars in revenue, and that is a huge lever. I don't think it is possible for VMware to win long term.

So VMware would do well if it stays away?
VMware is trying to say it does not compete with Microsoft. But the problem is that, long term, one of them has to win and the other has to lose.

At the same time, VMware does not want to become a Bios company. Every computer runs a Bios. A Bios runs in every city, in every notebook, but nobody makes any money. To make money you need to control the API because that controls all the software and all the hardware and anything else. Now VMware says it doesn't compete, and that is easy to say because it doesn't have the product right now — but it will soon.

When EMC was in the market for a virtualisation company (before it settled on VMware) did it talk to you about a possible purchase?
All I can tell you is that everybody talks to us. We are an interesting company.