Transcript CEO Keynote: Industry Trends and Challenges

SWSOFT GLOBAL HOSTING SUMMIT 2006
Industry Trends and Challenges
SWsoft Products, Corporate
Update and Future Plans
Serguei Beloussov, CEO
Kurt Daniel, VP Marketing and Alliances
Ezequiel Steiner, Director of Business Development
May 2006
www.swsoft.com
Agenda
• SWsoft intro – why should you listen?
• Strategic Industry Challenges and Trends
▪ Automation and SWsoft products are formed around addressing them
• Some of the tactical service provider challenges
▪ Virtuozzo as a solution
• More tactical service provider challenges
▪ OPEN FUSION as solution
▪ Plesk, other products and product strategy
• SWsoft corporate
▪ Overview, status and plans
▪ Partnership update by Ezequiel Steiner
▪ Marketing update by Kurt Daniel
• Summary and Executive Q&A
2
www.swsoft.com
Why Should SWsoft Have a Perspective?
• Serving Web Hosting Industry since 1999
• The global market leader in Web Hosting
service provider software
▪ Over 10,000 service providers in over 100 countries
▪ Control Panel Automation powering more than 150,000 physical servers
▪ 15,000+ additional physical servers each month
▪ Over 400,000 VEs on over 10,000 Virtuozzo servers
▪ 1000+ Virtuozzo servers (for hosting) every month, accelerating
▪ Over 10 mln domains/active sites, over 50 mln mailboxes
• Product and services portfolio which covers
all aspects, all major platforms for all types
of Web Hosting in 21+ languages
3
www.swsoft.com
Strategic Hosting Market Challenges
• Lack of Investment community interest
▪ Large players failed
▪ Perceived small market
▪ Results
• Lack of capital led to
slower than possible growth
• Unique purchasing and
payment patterns
• Lack of Media & Analyst coverage
▪ Large players failed
▪ Results
• Higher customer acquisition costs
• No medium to educate customers and partners
about service differentiations
• Persistent confusion about the market size, structure and players
4
www.swsoft.com
Unique Industry features
• Mass Market Hosting defined
▪ Not Telco/ISP, Not Colo, Not Online Services and Not Enterprise IT Outsourcing
▪ Low-end, mid-size, high-end up to 20K$/service unit per year
▪ Sells - Domain, Shared, VPS, Dedicated, Managed, Application, Access, Certificates,
Colo and Marketing – focus on the large numbers
• Different competitive landscape from general IT
▪ 75%+ Linux only slightly changing with Microsoft push
▪ Dell is by far No.1 branded server vendor
▪ Germany is the most advanced market with the highest service
penetration and sophistication, lowest prices but highest profits
• Web Hosting is a very segmented market
▪ The largest players less then 5% in revenue share
▪ Each geographical market has its own leader
▪ On top of that variety of generalized and specialized players
• Full service, dedicated, managed, application, mail, shared, registrar, certificates, VPS-only,
ISP/Telco, marketing monsters ?, domain portfolios ?, community sites
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www.swsoft.com
Market Trends as Suggested 1 Year Ago
• More Full Service providers
• VPS & DS, DDS – Virtualization
• Advanced Windows hosting
• Discounted Dedicated
• Advanced & Managed Dedicated
• Registrar and HSP convergence
• Telco/ISPs moving back in
• BLOG hosting
• Discounted Advanced Shared
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www.swsoft.com
Potential Trends & Opportunities as of 1 Year Ago
• Potential Trends
▪
Hosted Exchange, SharePoint, LCS
▪
Market Consolidation
▪
DSL & other connectivity
▪
Marketing Services
▪
Game Hosting
• Opportunities
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▪
Virtualized low to high-end dedicated/managed services
▪
Resurge of free web and email hosting
▪
Complete and easy-to-use CMS hosted
▪
Full service and easy-to-use eCommerce hosting
▪
Even more application hosting (CRM, etc)
▪
Resurge of investment community/press interest & IPOs
www.swsoft.com
Future Trends As We See Them Now
• Virtualization everywhere
• Secondary domain services, domain hosting
• Managed, complex and high-end dedicated
• Shared hosting threatened by community
sites, free hosting and monsters
• Rich email/collaboration
• Certificates resurge
• More full service providers including registrars
• Industry consolidation, continued interest
from investment community and increasing
valuations – 0.3x > 1x > 2x > 4x > what’s next?
• IT/Software as a service?
• Virtualization for complex hosting?
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www.swsoft.com
Automation as Enabling Technology
Marketing
50% of success
▪ Good Products
▪ Good Pricing
▪ Good Promotion
Hosting Business
Service & Support
20% of success
▪ Efficient
▪ Satisfying
Operations & Finance
10% of success
Service
&
Support
Marketing
Operations
&
Finance
▪ Process Driven
Enabling Technology
20% of success
▪ Ticket to the game
▪ Must be single transparently
integrated system
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Automation & Virtualization
www.swsoft.com
SWsoft Product Portfolio
•
•
•
•
Server Automation and Virtualization Software
Hosting Service Provider and Enterprise Markets
Windows and Linux/Unix Platform Support
Complementary Solutions:
▪
Powerful Server Virtualization and Tools
▪
Leading Hosting Control Panel
▪
Innovative Web-based Website Builder
▪
▪
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HSPcomplete
Comprehensive Hosting Automation Solution
Carrier-Grade Datacenter Automation Solution
www.swsoft.com
Tactical Industry Challenges
• Facility Related Challenges
▪ Data center inventory is shrinking
▪ Building out from scratch is long and capital intensive
▪ Rising power use, costs and capacity
• Hardware Related Challenges
▪ Hardware vendors offer bigger/faster servers per unit price – but it usually exceeds
customer requirements
▪ How easy is it to provision, manage and support 1000s of servers over many years?
▪ What to do with the old hardware?
• Customer Related Challenges
▪ Low End: Shared hosting competition from Google, Yahoo!, and Microsoft
▪ Mid Level: Budget-conscious customers drive down prices of low-end dedicated
servers. They prefer direct control over their hosting environment, but use only a
fraction of server’s capacity
▪ High End: Developers of fast-growing web-applications demand rapid, seamless
scalability
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www.swsoft.com
Historical Architecture vs. Virtualization
Operating Systems
History and Today
1000s of Specialized
Servers
Management Costs
user
user
user
user
super
user
user
Inefficient IT
Infrastructure
Software Costs
App 4
App 3
App 2
App 1
Hardware
Costs
IDC
Costs
OS
• Single Task Single User • Per Applications or User Group • High cost
• Multi-Task Single User • Physically provisioned/managed • Hard to automate
• Multi-Task, Multi-User • Poorly utilized <10%
• Inflexible Service Levels
“…Virtualization is a framework or methodology of dividing the resources of a
computer into multiple execution environments...”
http://www.kernelthread.com/publications/virtualization/
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www.swsoft.com
Virtualization Provider Benefits
• Enables dedicated-like services with sharedlike economies and infrastructure
▪ Efficiency: direct cost savings, cashflow savings and oversell opportunities
• Hardware
• Electricity
• Datacenter
▪ Simplicity and Flexibility:
• Zero cost of provisioning and automated management
• Comprehensive self management decrease support
• Better security
• Upgrade and migrate customers dynamically with no downtime
• Main result: GROW REVENUE FASTER!
▪ More customers with new high margin services and pricing
▪ Upsell existing customers automatically
▪ Differentiate from Google, Yahoo! and Microsoft Live!
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www.swsoft.com
Virtualization End-Customer Benefits
• Pay less:
▪ Better price for better service
▪ Easily upgradeable
▪ Burstable service
• Get more:
▪ Easier and less to manage
▪ Comprehensive self management
▪ Higher availability and performance:
• more reliable and faster hardware and disk systems
• zero downtime migration
• faster management operations
▪ Sophisticated backup/restore capabilities
• Why not: There is nothing to lose!
▪ Suitable for low-end, mid-level and high-end customer
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www.swsoft.com
Service Provider Virtualization Scenarios
• TrueVPS
▪ Better alternative to shared and cheaper than low-end dedicated
• DS/DDS
▪ Better alternative to low-end dedicated
• Split Dedicated
▪ Enable your channel/customer to leverage virtualization
• Split Shared
▪ Increase density, availability, security and manageability of shared
• ManagedVPS and Advanced Shared
▪ More flexible and powerful shared or easier and managed dedicated
• Virtualized Infrastructure
▪ Benefit from virtualization for all of your infrastructure
60% of US hosting,
over 6.2 billion $$
by ’08 per IDC
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• The opportunity - Complex Hosting
www.swsoft.com
Virtualization Momentum
• SWsoft Vision
Plesk vs. Plesk in Virtuozzo VPS
Plesk
▪ Virtualization software will
be used for all computing
including server, desktop and even
thin clients, and as such Will Run
On Every Computing Resource
• Facts confirm the momentum
▪ 60%+ of Plesk licenses sold Virtualized,
compared to <30% 12 months ago
5X
4X
3X
2X
X
0
Q2’05
Q3’05
Q4’05
Q1’06
Virtuozzo : Physical Servers
▪ Rate of Virtuozzo licenses shipped increased 7x
from 12 months ago, 50x from 24 months ago
6x
▪ Over 20,000 Virtuozzo partitions were sold in
Feb’06 compared to 10,000 Feb’05
4x
5x
3x
• SWsoft believes
2x
▪ Within the next 36 months majority of the new
revenues in the hosting market would
come from virtualized infrastructure
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Plesk in Virtuozzo VPS
6X
1x
0
www.swsoft.com
Q2’05
Q3’05
Q4’05
Q1’06
Different Types of Partitioning
Execution
Environment #1
Execution
Environment #2
Execution
Environment #3
Users
Users
Users
Applications
Applications
Applications
System Apps
System Apps
System Apps
OS
OS
OS
Hardware
Hardware
Hardware
Execution
Environment #1
Users
Execution
Environment #2
Users
Execution
Environment #2
Users
Applications
Applications
Applications
System Apps
System Apps
System Apps
Guest OS
Guest OS
Guest OS
Virtual Machine Monitor
Host OS
Execution
Environment #1
Execution
Environment #2
Execution
Environment #3
Users
Users
Users
Applications
Applications
Applications
System Apps
System Apps
System Apps
Operating System Virtualization
OS
Hardware
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▪ Multiple OSs run natively
▪ IBM, Sun, HP, Unisys, more
• Virtual Machine Monitors
▪ Virtualizes access to hardware
▪ Host OS and each guest has full OS
running
▪ VMware, Microsoft Virtual Server,
Parallels, XEN, UML
Hardware
CPU
• Hardware partitioning
• OS Virtualization
▪ Virtualizes access to the OS
▪ Single kernel is running
▪ Virtuozzo, BSD jail, Solaris Zones
www.swsoft.com
: Operating System Virtualization
Virtuozzo creates multiple isolated Execution Environments
or partitions or Virtual Environments (VEs) on a single
physical server to share DC, hardware, software and
management effort with maximum efficiency. Works as
light add-on for commodity operating systems and hardware
• Mass Management – Tools and OS &
Application Templates to enable automated
mass management/deployment/updates of
10s of 1000s of VEs and 1000s of servers
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Virtualization
OS
OS
www.swsoft.com
Provision
Update
user
root
Virtualization
App 1
user
user
App 2
Execution Environment #4
App 4
App 4
App 1
App 2
App 3
Execution Environment #5
user
root
root
Physical Server #2
App 1
App 4
Execution Environment #3
root
user
user
App 3
Execution Environment #2
App 4
root
user
user
App 2
App 1
• Migration allows VEs to be moved
between physical machines w/zero
downtime
Execution Environment #1
#6
• Resource Management – CPU, memory,
disk, I/O + min/max values and full isolation
App 1
• Dynamic Partitioning of servers into
hundreds of VEs with full dedicated-server
functionality - root access, re-bootable,
install any application, change any file, any
IP settings
root
user
user
user
root
2
App 2
App 1 App 2App
1
App
App 1Execution Environment #7
user
Physical Server #1
Momentum
750+
5+ years
10,000 Servers
400,000 VEs
250+
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www.swsoft.com
: Unique Advantages for Hosting
• Efficiency
• Management Tools
▪ Highest Density
• 500+ VE/server in production
• Lowest TCO per virtual server
▪ Performance
• Zero overhead, especially I/O
▪ Scalability
• Each VE can scale up to the
resources of the whole physical server
• Manageability
▪ Designed for 10s of 1000s of VEs
▪ Full multi-server API/SDK ready
for integration
▪ Browser Based and GUI
▪ Unique VE Owner recovery UI
• Zero-Downtime Migration
▪ With or without shared storage
• Extensive Platform Coverage
▪ Manage Once
▪ Windows and Linux
▪ Fast Management Operations
▪ x86, x86-64 and IA64
▪ Dynamic, Near Real-Time and Fair
As-Needed Resource Allocation
• Full Isolation and Security
Mature & Complete & Proven
Since early 2001: 400,000+ VE, 10,000+ servers, by 750+ providers
1000s of provider requested features in the product
20
www.swsoft.com
Lack of Automation - Another Industry Challenge
• Losing Money
▪ Low density levels
▪ High provisioning and management cost with manual operations
▪ Wasted marketing dollars with inefficient ordering processes
• Losing Customers
▪ Low service levels, multiple sign-on
▪ Lack of self management
▪ Incomplete service offerings
• Losing Opportunity
▪ Lack of automatic upsell, multiple control panels
▪ Extremely hard to launch new advanced services
▪ Lack of differentiation makes marketing difficult
• Automation is the key
▪ Must be fully integrated single system
▪ Also must be Complete, Comprehensive, Flexible and Different
▪ Single system/vendor could not deliver all – cooperation is required >
21
www.swsoft.com
OPEN FUSION: A Vision for Integration
OPEN FUSION is service provider automation
integration platform to be used by all SWsoft products
and fully open for 3rd party and in-house developers
Core Ingredients
Example: OPEN FUSION with HSPcomplete
• Consolidated API
• Pluggable, Integrated UI
• Authorization Engine (AE)
• Common Licensing
• Unified Versioning
• Unified Safe Updates
• Consolidated Localization
• Documentation
• Open Fusion SDK
• Open Fusion Community
22
www.swsoft.com
Plesk: The Most Important Product
• Aggressive development from 2003 to date
▪ 5x development team size resulting in 9+ major releases in 3- year
▪ Plesk6 > Plesk6.5 Win > Plesk7 > Plesk7 Win > Plesk7 Reloaded > Plesk 7 Win
Reloaded > Plesk 7.5 > Plesk7.5 Win > numerous point releases > Plesk8
▪ Plesk Expand 1.0 > Expand 1.1 > Plesk Expand 2.0 and Plesk Antivirus
PSA 5
Plesk 6
Plesk 6.5
Plesk 7
Plesk 7 Reloaded
Plesk 7.5 Reloaded
Plesk 8
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www.swsoft.com
Plesk Future R&D Directions - QUALITY
• We are not stopping
▪ Focus on quality of releases and upgrades
▪ Longer development and release cycles – move to
12-15 months, multi month public Beta > RC > RTM
▪ OPEN FUSION and better Virtuozzo integration
▪ Flexible and more support of 3rd party
(mail, webmail, app server, cms, ecom, backup etc)
▪ Rapid and complete distribution and component support
▪ Ease of use, more server administration, distributed and provider feedback
• Specifically – visit Plesk session
24
www.swsoft.com
Other products update and roadmap
•
- newest and simplest
▪ Transparent Plesk integration and OPEN FUSION
▪ More full CMS features one way or another
▪ Free on Windows until September 30th 2006!
•
HSPcomplete - committed
▪ OPEN FUSION will quickly make it more solid and complete
(effectively 10x development team)
▪ Over time complete small to mid-size provider packaged BSS ++
▪ Any service shall be possible
•
– 5x development team
▪ Aggressive development – advanced shared Linux/Windows,
packaged Exchange, game, virtualized, high availability, streaming
▪ 15+ implemented reference live accounts, many in implementation
▪ Soon - 100% native Microsoft PEM + more Microsoft applications
▪ Future – stronger customer focus, quality, flexible, complete and OPEN FUSION
• BM – new as standalone product!
▪ Sophisticated, flexible and scalable Billing, Ecommerce, Marketing, CRM and Support
▪ Stellart RAD platform, proven process and very experienced separate team
25
www.swsoft.com
Overall R&D Direction – QUALITY and Completness
• Longer development cycles – 12-15+ month
• Longer release cycles – few months for beta/rc/rtm
• Much higher attention to quality and upgrades
• Open complete API/SDK specifically OPEN FUSION
• More 3rd party
• Native Windows and continued Linux support
• Continued evaluation of customer feedback
▪ Carefully study how product changes could decrease support load
• Lots of work – perfection is very distant still
26
www.swsoft.com
SWsoft Corporate Overview and Growth
• Headquartered in Herndon, VA

Offices in USA, Europe and Asia
• Privately funded, strong financials



Founded end ‘99, financed to profitability by founders
SWsoft is profitable, revenue at tens of millions, growing at 170+%
Jun’05 closed 12.5mm$ round by Bessemer, Intel Capital and Insight
• Expert team 700+, 450+ top-notch engineers
and 100+ support
London, UK
Sales &
Marketing



Alexey Kuznetsov, TCP/IP in Linux kernel
Unique hiring model at MIPT, NSU;
Headquarters
Washington DC
hiring gradually as revenue allows
Sales & Marketing
28+ patents pending
Support, Services
Moscow,
Russia
R&D
Novosibirsk,
Russia
R&D
Frankfurt,
Beijing,
Germany
China
International
Sales &
Operations
Marketing
Tokyo,
Japan
Sales &
Marketing
Singapore
Sales &
Marketing
• Successfully expanding to Enterprise Market
27
www.swsoft.com
Growing Ecosystem of 500+ Technology Partners
28
www.swsoft.com
Strategic Partners – Update and Plans
•
▪
▪
▪
▪
Joint Windows SiteBuilder offering
Microsoft HCM automation through PEM, Plesk
Cooperation on Windows-based DDS/VPS enablement through Virtuozzo
Product certification
•
▪ Developing automation to acquire, resell, manage SSL certificates
▪ Introducing new online services through automation tools (like news feeds)
•
▪ Efficient server technology, especially designed for Internet Datacenters
▪ Server certification; cooperation to provide complete solution
•
▪ Product certification; support of RH/Virtuozzo & SUSE/Virtuozzo kernel
•
▪ Server certification; future cooperation on virtualization and automation solutions
•
▪ Advocating to raise awareness of the hosting opportunity/strategic implications
29
www.swsoft.com
3rd Party Solutions – Update and Pipeline
• Overall Strategy: OPEN FUSION
▪ Facilitate integration of new products & services
• Some Recently Added
• Types of 3rd Party Solutions in Pipeline
▪
▪
▪
▪
▪
30
Collaboration
More antivirus/antispam options
Secondary domain
Marketing, CMS and eCommerce
Hosted Web Services
www.swsoft.com
SWsoft Marketing – How We Can Support You
• Joint PR
▪ Contact info directly on our website
• Hosting Analysts/Hosting Association
• Events/Seminars
▪ Industry, Yours, Ours, Others
• More/Better Communication
▪ Added documentation to website
▪ Communicating product launches/roadmaps in future in advance
•
•
•
•
•
31
Whitepapers/Tools/Other Product Marketing
International Support
Pre-packaged Content/Demos for Your Website
More Partner Marketing
[email protected]
What can we do better?
www.swsoft.com
Marketing – Direct/Indirect Support Metrics
Selected Deliverable
Product launches (betas, major/minor releases)
50+
Customer/partner emails
80+
Press releases
70+
Media interviews
50+
Articles/media coverage
500+
Analyst briefings
40+
Events/seminars
70+
Advertising vehicles (print and online)
15+
New case studies
5+
New whitepapers/bylines
10+
New/updated brochures
6+
Partnerships/deals
32
Annual #
30+
www.swsoft.com
New SWsoft Branding – Snapshot
• Why are we doing it?
▪ Many products, multiple acquisitions, OPEN FUSION
▪ More professional, cooler
▪ Customer and partner clarity, ease
• New Logos, New Website, Stronger SWsoft
▪ Elevation of company brand (many don’t know Plesk is SWsoft’s)
▪ Completely new company and product logo SYSTEM
▪ New corporate style for ALL marketing materials
• Business system
• Emails, whitepapers, case studies, datasheets
• Upgraded www.swsoft.com website
• Full Implementation this Summer/ASAP
▪ Process included 10+ interviews/feedback from trusted partners, analysts
33
www.swsoft.com
Branding – Vision/Promise and Who We Are
• Brand Vision
▪ Virtualization + Automation = Optimization
▪ Virtualization and Automation for the Real World
▪ We envision a world where computing and can infinitely
optimized for business success
• Brand Positioning
▪ No company is more relentless about optimizing
computing and business than SWsoft
• Brand Promise
▪ “I am confident SWsoft will always deliver the most
efficient solution for my business”
34
www.swsoft.com
New Corporate
Logos
(Work
in Progress)
Branding
– Corporate
Logo
(Work
in Progress)
35
Summary
• SWsoft is committed to Web Hosting market
▪ Product strategy built around addressing industry challenges and trends
▪ Who could be your best and most independent partner today?
• SWsoft is real, stable and rapidly growing
• AttendVirtuozzo session
▪ Virtualization is inevitable as both threat and opportunity
▪ Will Virtuozzo bring you higher ARPU enterprise customers soon?
•
•
•
•
•
•
36
Attend OPEN FUSION session
Attend Plesk session
Attend all other sessions!
Meet our people and provide feedback
Network! Lots of interesting/useful people to meet
Have Fun and Ask Questions NOW and tomorrow!
www.swsoft.com
SWsoft Executive (1st) Public Q&A
•
•
•
•
•
•
•
•
37
Serguei Beloussov – CEO/Chairman
Yakov Zubarev – COO/Head of Worldwide Sales
Kurt Daniel – VP of Marketing and Alliances
Soeren von Varchmin – Head of International Sales
and Operations
Alexei Kandikov – Head of Hosting Automation
Engineering and Support
Ezequiel Steiner – Director of Biz Development
Another and complete executive Q&A/feedback
tomorrow
Do not hesitate to ask any question and provide
direct feedback – they are welcome!
www.swsoft.com