Parallels Software is having its annual conference with discussions about the cloud and virtualization.
The big takeaway we see from this event? The small business market is beginning to see significant growth.
We'll be live blogging this morning to give you a view about the trends that are evolving in the market.
9 a.m. EST: Darren Pleasance of McKinsey and Company is giving an overview of the cloud computing market. He is now talking about consolidation and the requirements for the players to win. The takeaway: local players will continue to have a strong play in the market.
9:03 a.m. EST: According to to McKinsey, loyalty matters. It's a high loyalty business for hosting providers. The best performing small business cloud services providers are reducing churn. A 1% drop in churn can have significant impacts. Customer acquisition costs need to be low.
Advice for hosting providers:
- Make the service risk free (30-day trials)
- Buy new customers through mergers and acquisitions
- Establish partnerships with other players in the cloud. This would include partnerships with VMware, for example.
- Understand the triggers in the customer lifecycle.
9:13 a.m. EST: The key economic levers apply to the large companies, too. These companies must:
- Provide high quality self-serve offerings.
- Build out world-class CRM
- Develop clear compelling value
- Evolve to lower cost, next-generation infrastructures
9:24 a.m. EST: Seguei Beloussov, Chairman n CEO of Parallels is on stage. He is looking at the giants. He believes Amazon Web Services will grow revenues to $1 billion in 2011 and$2.5 billion by 2014 with gross-margins of 50% and more. He says AAWS will compete head-on with platform vendors.
Salesforce.com will begin to pilot channel strategy in international markets.
He says Google will not focus on the small business market in the short term.
Beloussov says Apple is the mobile cloud leader.
Facebook will extend to voce, instant messaging, email and mobile services. It will ben an integrated services provider.
Beloussov says that by 2015, the small business cloud will be the hottest in the market. It;s a $50 billion small business opportunity.
9:33 A.M. EST: Size does not matter for hosting services. Most important is for providers to optimize operations. A 20% increase in efficiency can make for an almost quadrupling in revenues.
Where is the SMB opportunity? It's a $28.6 billion market with almost $12 billion in infrastructure services.
9:39 a.m. EST: Voice and Web presence will be growth drivers for hosting to small business provider.
9:48 a.m. EST: Parallels is launching Paralels Automation for Cloud Infrastructure. It's designed for service providers who cater to the SMB market. It's an API-based infrastructure that is hypervisor agnostic. It will allow providers to go after the developer market. Interesting how this might affect the overall cloud market.
9:41 a.m EST: Parallels will offer services for sophisticated voice solutions. Parallels is making a big commitment to Microsoft Hyper-V.
9:54 a.m. EST: Jason Frisch, CEO, for Tsukaeru.net, is speaking. The company is the fastest growing hosting provider in Japan. We're seeing a demo of the new automation environment. It's designed to be simple for the small business and the developer. Oh, its awful when the demo does not work. Audience is respectful.
10:08 a.m. EST: Birger Steen has been appointed as CEO, replacing Beloussov who will continue as chairman but focused on high level strategy. Steen is the former vice president, SMB and Distribution at Microsoft. Steen is also a former oil trader who began working with Parallels when he ran Microsoft in Russia.
10:16 a.m. EST: Softlayer is partnering with Parallels. Softlayer is the world's largest hosting/cloud infrastructure provider.
10:27 a.m. EST: Warren Adelman, president and COO, Go Daddy is in stage for the keynote. He is talking about the challenge in making it clear and understandable what the cloud means. He is sharing GoDaddy advertisements. He is making the argument that GoDaddy's more conservative ads have not driven the traffic as the more titillating ads.
10:41a.m. EST: Sees itself in providing fourth generation service. This means being able to scale if a site will hitTwitter or Digg or any popular service.
The ecosystem is becoming far more complex. Hosting services have become the supporters for the software people are using. It has lead to customer support for application environments.
Top 20 passwords at Gawker and RockYou show how bad the problem is with users. Customers use passwords such as 12345. That leads to exploits.
10:50 a.m. EST: Today GoDaddy is announcing the Hosting Security Forum. Members include Wordpress, media temple, network solutions, Trend Micro, GoDaddy, lunarpages and Parallels.
They asked Wordpress Founder Matt Mullenweg to do a video. It is showing now. Mullenweg is talking about comment spam. The bad guys had more time, more money and fewer scruples. Mullenweg says Wordpress will share its knowledge with other hosting services to help reduce the attacks on hosting services.
Okay - back in a bit!
11:54 a.m. EST: Panel discussion. Darren Pleasance of McKinsey is talking about the importance of differentiation. How Yahoo! is differentiating? It comes down to the properties success bit the cloud. The cloud is the infrastructure.
1:53 p.m EST. In a session about how to serve small business. Hosting services need to make it easier for small businesses to integrate social features into a Web site.
In the United States, SMBs spend $8.6 billion for cloud services.
1:58 p.m. EST: Parallels sees a $12 billion incremental marketing opportunity. But selling to the SMB market requires a different approach. You want to cater to the owner with easy-to-use tools that allows her to grow her presence in the social networks.
Designers are increasingly becoming Web host managers. Designers manage the site. People have to manage their computers, software and networks but they do not want to have to do that.
- Customers will increasingly buy services, not servers
- Basic email has no value You need to bundle business class features and functionality.
- Hosted PBX represents an adjacent market. It's worth focusing on as all SMBs need a phone.
2:40 p.m. EST: Wordpress is the number one request to hosting providers. Designers are also looking for photo galleries; video galleries; e-commerce; embedded elements such as maps and connectors to social networks. They are also starting to look for Web conferencing, mobile optimization and VOIP.
2:50 p.m. EST: Paralles Plesk Panel now allows for Web sie staging. It also includes Website resource creation; analytics; SEO and database creation and management.
3:01 p.m. EST: Parallels has a new, integrated site builder. It includes 60 pre-written templates an on-screen editor and a color selector.
Back in a bit!
4:49 pm EST: Amazon has built massive data centers but they are not profitable They hire a lot of developers. Amazon went with Xen and that may be a bad thing. There is no memory sharing. Amazon is focused on the enterprise market. Parallels sees the small business market as most lucrative.
Parallels is hyper visor agnostic. But containers are the cloud's future. Google, Heroku and even VMware use containers. This allows the machine to be split into multiple parts. The container sees the kernel.
In Parallels Automation, the containers are managed by the load manager and the firewall. Small business owners may use a Web interface. Developers may access through a REST-based API.
5:06 p.m. EST: Parallels says don't get Amazoned. Instead, they say, do Amazon vetter.
Parallels says they outshines Amazon. It's cloud service includes:
- A GUI
- Bootless Upsizing
- Fast Reboots
- Memory Oversubcription
- Support for VMs and containers
- EsX support
- Hourly billing
- Flat billing
5:45 p.m. EST: Pleasance of McKinsey says he see Fortune 500 companies making cloud a top 5 initiative.
The real opportunity, as CEO Steen sees it, is in the small business market.
6:02 p.m. EST: What about the freedoms that SMBs can get from the services like Facebook, Twitter and other services? Integration is just beginning.
6:14 p.m EST: Conversation with the media and executives from Parallels, Intel, McKinsey, AT&T and SoftLayer. Discussion has moved around a lot as it often does in these kinds of events. But the conversation keeps moving to the small business. One consensus: the market will grow but people with skill sets that had once been valuable will not be anymore.
6:32 p.m. EST: Group sees Amazon as only selling virtual machines. A hosting service can't use AWS. Parallels will offer that capability for hosts to have its own cloud.
That's it. See you tomorrow!