While many cloud providers are targeting the enterprise, small and medium-sized businesses represent the largest market for cloud services, according to Serguei Beloussov, CEO of Parallels. In his keynote at HostingCon 2009, Beloussov said SMBs represent a major opportunity for hosting companies looking to compete with the huge cloud computing platforms being built by Microsoft, Amazon and Google.
"I believe that in the future, small businesses will not have IT infrastructure," Beloussov said Monday at the conference, being held this year at the Gaylord Resort in Washington, D.C. "It is potentially one of the largest changes in IT. I truly believe that over time there will be no SMB applications hosted in-house."
While the industry's tech titans may have the largest data centers and cloud platforms, Beloussov said that web hosting companies have the most important assets. "You have the customers for the two most important applications - web and email," he said.
Standard Suite of Apps
But the competition for those customers will be fierce, and small businesses are likely to flock to the offerings that can best simplify their IT operations. SMBs want to use a standard set of applications, Beloussov said, and are less concerned with the back-end infrastructure. The best entry points are messaging and productivity apps, but those with the broadest offerings will have an advantage.
"We believe one of the key advantages of service clouds is the ability to offer a complete suite of applications," said Beloussov. "You have to be a one-stop shop. That's your advantage."
It also requires partners, which fits Beloussov's vision for the industry - as well as the Parallels' business model. Previously known as SWsoft, Parallels has been a major player in the hosting automation market with its Virtuozzo server virtualization product, which is widely used virtual private server (VPS) hosting accounts. The company also makes the Plesk control panel, which allows hosting customers to manage their sites with minimal tech support, along with popular desktop virtualization software.
'Partner to Compete'
Parallels provides a partner ecosystem that can help web hosting companies leverage their customer relationships with SMBs to transition, Beloussov added, noting that his company has recently launched an SMB control panel that expands the offerings for third-party applications that can be automatically installed by hosts and their customers.
"You cannot do everything in-house," Beloussov said. "It's impossible."
There are other potential partners, including the big cloud builders themselves. "Google and Microsoft represent a threat, but also an opportunity," Beloussov said. "They want to be partners, not just competitors. It seems like Google wants to be more friendly as a partner. You can now sell Google web services."