Parallels eyes SMB cloud market in Asia

September 26th, 2011 | by Chan Chi-Loong

Parallels is poised for a cloud boom in Asia Pacific.

According to the virtualization software maker, demand for their hosting and cloud services software in Asia Pacific grew over 75 percent in the first half of 2011.

Now Parallels might be best known for their consumer Parallels Desktop for Mac product, but they also have hypervisor solutions that cater towards the SMB and enterprise space.

Of course, without a base number, it’s hard to tell exactly how big their business is in the region (percentages are not enough), and the privately-held company does not release financial figures.

However, at their Parallels APAC summit held last Friday in Singapore, Parallels did name-drop an extensive list of partner, customers and distributors they acquired in the last 12 months.

Examples include their win with KT, Korea’s largest telco, to speed deployment of Microsoft Office 365 to three million Korean SMBs. Parallel’s cloud infrastructure software allows easy management and provisioning of SaaS (Software-as-a-service) services like Office 365.

Others service provider wins include Telekom Malaysia, Australia’s iiNet, and Papua New Guinea’s Datec; and partnership with distributors like India’s Kryptos, Thailand’s PromptNow and Vietnam’s Vinacis.

Going after the SMB market

George Karidis, chief strategy officer from Dallas-based hosting company Softlayer and a customer of Parallels, feels that Parallels is tackling the right market – SMBs.

“It’s hard to compete with VMWare in the enterprise space, as they have the biggest mindshare there,” he said. “Probably the only one that can fight them there is Citrix, with their Xen hypervisor.”

So, the smart segment to go after is the SMB space. SMBs would love to take advantage of cheap open source and cloud technologies, but probably wouldn’t have the knowledge to download and configure tools like WordPress and SugarCRM, so this is where ISPs can help.

And ISPs can provision such services a lot easier with a cloud infrastructure software stack, like one from Parallels that takes care of things like billing, automation, and scalability.

According to Parallels CEO Birger Steen, there are about 80 to 90 million SMBs in Asia alone, so it’s a “huge untapped market”.

With SMBs, channels management is the key to doing well. According to George, Softlayer will not sell products that don’t meet certain channels criteria. Softlayer is the world’s largest private hosting provider and their solutions are technology agnostic – they also use VMWare and Citrix.

“It needs to be marketed and have good support,” he said. “Of course, it also needs to be a good product.”

I asked George how he would grade Parallels as a channels partner, and he said that they were “pretty good”.

One example of this that I saw was a slate of surveys that Parallels commissioned on how to tackle various Asia markets like Japan, Australia, India and China. These were passed to the media and no doubt also to their channels partners.

Each market has different needs, like India is a booming market where SMBs are price sensitive and require simple web presence, whereas in more mature Japan the advice was to target SMBs for hosted PBX solutions.

Given their growth, it seems only a matter of time before privately-owned Parallels seeks an IPO listing. Or perhaps get bought out by a behemoth like Microsoft.

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