Open Source Weblog

“I believe that virtualisation technology is commoditizing,” he said. “In my view there are four levels in the data centre: the platform, platform enhancements, management tools and automation. The platform enhancements solve the limitations of the platform, and this is what virtualisation does today. But there is constant evolution and the platform enhancements soon become just part of the platform.”

Not good news for companies that are currently making hay in the virtualisation space, in particular VMware. Oh, and, er, Parallels.

And just as importantly, it is not Microsoft’s imminent entry into the virtualisation space that will be the driver for virtualisation commoditization according to Beloussov – Microsoft will soon make its Hyper-V virtualisation technology part of Windows Server 2008.

“I don’t think Microsoft’s Hyper-V is the issue,” said Beloussov. “Microsoft does lots of things: backup, antivirus and so on, and they haven’t necessarily affected the market for independent antivirus players.”

“But ultimately virtualisation will just be part of the platform, regardless of Microsoft’s moves,” he added. “People don’t want more infrastructure, they want automation and optimization. Virtualisation is just more infrastructure unless it is part of the platform.”

For a vendor that offers server and desktop virtualisation technologies that make up the larger chunk of its sales, these are strong words indeed. “The value we deliver is not the virtualisation, it is in data centre optimization,” Beloussov explained. “For some companies, virtualization is part of optimizing the data centre, so we deliver that. But we can equally optimize data centres where they are using a different virtualization technology from our own. So we support VMware, [the open source] Xen and Windows HyperV. We may also support Sun’s xVM in the future.”

Anticipating that virtualisation will become increasingly commoditised, Beloussov is positioning Parallels not as a virtualisation company but as a data centre management, automation and optimization company. “Servers these days may be shipped running Windows, Linux or VMware; our focus is to offer infrastructure management which is why it’s crucial that we remain heterogeneous,” he says. “VMware’s management tools only help you manage VMware, but many companies have more than that.”

“In the long term, at some point in the not-too-distant future, the percentage of our revenue that comes from virtualisation will decrease,” he said.

As well as server virtualisation for Windows and Linux platforms, Parallels offers virtualisation for desktops, including Mac, Windows and Linux desktops. Its Parallels Desktop for Mac enables people to run Windows on pretty much any Mac. Beloussov’s views on the market for virtualising Windows on the Mac are fairly controversial, too.

“We’ve got customers who have found that Windows runs better virtualized on the Mac than it does on generic PC hardware,” he told me. “That’s because the PC is an open platform, and Windows supports thousands of hardware vendors that all have their own drivers, and that can cause a conflict. With Macs, Apple controls all of the hardware development so they don’t have the same problems. So more and more companies are buying Macs to run Windows to avoid driver conflicts, and also for their security compared to Windows.”

Could he put any figures on the numbers of companies running Windows on the Mac not for testing and development or even just so they have the option of two operating systems (and their supported applications) on the same machine, but because they just want to run Windows on the Mac platform? “I don’t have exact figures, but more and more companies are doing this,” he said. “Steve Jobs is a very secretive person -- he doesn’t like to say either.”

Wishful thinking? Canny marketing of a desktop virtualisation product for the Mac? The ramblings of a CEO who concedes one of his core product streams is commoditising? You decide. But with claimed revenue in the region of $100m, five acquisitions last year and almost every Fortune 500 company as a customer, and another claim that the firm is “growing faster than VMware”, plenty of observers will take Beloussov seriously.