Parallels Summit - Birger Steen

Parallels' CEO discusses event attendance, Parallels' strategy, partners and a competitive overview.
Written by Dan Kusnetzky, Contributor

Birger Steen, Parallels' CEO, presented the company's strategy and discussed news and announcements.

Who is here

Starting off, Birger ran through an overview of Parallels Summit 2012. 1600 attendees are here representing 752 companies. Attendees come from 62 countries. The Americas represent 70% of the attendees, 21% are from Europe and North Africa, 5% are from Asia/Pacific and 4% are from Russia and the Middle East. 8% of the attendees are analysts. Yeah team!

Company Update

Birger pointed out that the company has recently brought in staff from both Microsoft and the Linux Foundation. He called Parallels the "Switzerland" of the industry. It has added 100 plus staff members over the last year to bring the total to 879. 52% of the staff are focused on research and development.

  • The company has expanded its presence in Latin America, Vietnam, Thailand and South Korea. It has three engineering centers in Russia and China.
  • The company continues to invest in systems, processes and controls to enable Parallels to scale. Parallels has also accelerated its investment in programs designed to ensure long-term staff loyalty and stability.
  • Parallels has 12+ million customers in 125 companies. More than 5,000 service providers are using Parallels products to support their service offerings. At this point, 12 of the top 30 telecoms companies are using Parallels products.

Parallels Overview

Parallels presents itself as a supplier of service delivery software for the SMB cloud and its partner ecosystem. This event, Birger pointed out, is designed to bring members of the ecosystem together to help them partner to expand the ecosystem. It is also presented to help attendees learn more about the technology, best practices in using the software and how to "profit from the cloud."

Growth Strategy

The approach to growth Parallels is following is to improve the success of their channel partners and increase the number of partners in the ecosystem.

Birger then went on to discuss the size of the market Parallels is targeting, how it segments into SMB and major enterprises, how much of that revenue comes through channel partners and how much comes directly through Parallels' own sales force.

He went on to list some of the largest new Parallels customers.

Parallels been successful helping its partners syndicating Microsoft's Office 365.

Hosting Companies are one of Parallels' mainstay  markets

Hosting companies continue to be the mainstay of Parallels business. Birger believes that they continue to have a sustainable advantage due to their agility, "scrappy production" and their ability to deal with the basic issues of providing hosting and cloud services.

He's observed that they can be the low cost providers. He attributes this to the fact that hosting has been a brutally competitive market for quite some time.

These companies have learned how to sell one product or service at a very low cost and then growing by cross-selling and up-selling. Briger doesn't see that the telcos or the very large cloud providers have learned all of the same lessons.

Competitive landscape

Birger asserts that he doesn't know anyone who is offering the full "soup-to-nuts" set of products to directly compete with Parallels. He sees competitors offering dashboards, systems management, and billing, but none of them are focused as broadly or focused on channel and partner ecosystems. Birger asserts that the industry needs the workflow tools that Parallels is already offering.

Analysts pointed out that Microsoft is focused on the same market segments. Microsoft, too, is building ecosystems made up of channel partners and hosting companies. Birger responded that he doesn't think that Microsoft will get around to building all of the pieces for a while.  He also pointed out that at this point, Microsoft is a partner. While he feels strongly that Parallels is well positioned, I would suggest to never underestimate Microsoft.

He pointed out that Parallels is also working with VMware and Zimbra.

Birger asked are their people Parallels should be paranoid about. IBM and HP were both mentioned. He responded that Cisco, HP, IBM and others will need layers in the software stack that Parallels already has. He sees them as potential partners rather than major competitors.

SMB and Cloud

Birger ended up his session by pointing out that Parallels' core audiences are hosting companies and service providers focused on small to medium businesses. 

He sees that these hosting companies are transforming themselves to become cloud service providers. As they go down this path, the products Parallels is offering become even more important to them.

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