May l Washington, DC l Omni Shoreham Automation as a Competitive Advantage Jan-Jaap Jager Managing Director - Asia / MEA, Parallels

Automation As A Competitive Advantage 2 Agenda What has happened / is happening… How to keep Competitive Automation the Secret to Success How can Parallels Help

Automation As A Competitive Advantage 3 What has happened / is happening… OPPORTUNITY

Automation As A Competitive Advantage 4 Hosting Industry Industry continues to mature –Seen as a serious business Market Consolidation –Leaders are buying followers/ close competitors –Leaders are buying smaller companies SaaS is not futuristic, it exists today –Was and will be even more of a growth driver –Plenty of room for all hosting types –Threat and opportunity Larger ISVs see the need to move to SaaS as well –SaaS is SOFTWARE as a service. They are important partners if you are to take advantage of SaaS opportunity –Does it make sense for ISV to be a Service Provider?

Automation As A Competitive Advantage 5 ISV / SI ISV Applikation Actual Market Situation

Automation As A Competitive Advantage 6 ISV Application ISV / SI Actual Market Situation

Automation As A Competitive Advantage 7 ISV Applikation ISV SaaS ISV Appl. Market Trend

Automation As A Competitive Advantage 8 Hosting Market: Look ahead Hosting market grew to $8.2B in 2006 (from $6.8B in 2005)* US Market – represents only 50-60% of worldwide market By 2011, the market is predicted to grow to $16.4B* Trend #1: Traditional hosting market is established and growing, but slowing down Trend #2: Managed hosting and SaaS are the growing segments* Key Point: Changes may be required to sustain revenues and continue growth * source: IDC presentation at 2007 Parallels Hosting Summit SaaS % of Business Software Market Opportunity: $8B increasing to $40B 0% 5% 10% 15% 20% 25%

Automation As A Competitive Advantage 9 What has happened / is happening… Parallels Summit OPPORTUNITY GIANTS

Automation As A Competitive Advantage 10 Applications Google productivity tools for small and medium sized businesses. Internet Giant – Google Google targeting SMBs with SaaS –Google Sites (collaboration) –Google Apps (productivity tools) CollaborationScreen Images Competitor to providers offering Hosted SharePoint services. Apps Hosting Note that Google’s service offering is starting to resemble website hosting.

Automation As A Competitive Advantage 11 Targeting Developers Complex usage-based fees which are not understood by typical SMBs. Internet Giant – Amazon (and others) Amazon Web Services? –S3 – Amazon Simple Storage Service –EC2 – Amazon Elastic Computer Cloud WebStores targets merchants Home PageScreen Images Found Web Services after scrolling down (not in the main departments). WebStores Compete with e-commerce offerings - $60/month plus 7%.

Automation As A Competitive Advantage 12 Workspace Online file sharing for office applications. “may include advertising” Internet Giant – Microsoft Microsoft targeting SMBs with SaaS –Exchange Hosted Services (recent announcement) –Workspace (file sharing for office applications) –Small business (web site and domain tools) Screen Images New offer is targeted at SMBs as well as large providers. Small Business Template-based websites with branded and shared workspace. Microsoft is partnering with ISVs and hosting providers –Take advantage of the opportunity

Automation As A Competitive Advantage 13 Other Bigger Industry Players – like…

Automation As A Competitive Advantage 14 What has happened / is happening… OPPORTUNITY GIANTS PRICE EROSION

Automation As A Competitive Advantage 15 Hosting Services Price Development ASP.NET &.NET Services E-Commerce Initial Presence Added Value Applications Average Revenue Per User $2 - $10 $500 - $1,500 $150 - $500 $10 - $150 Shared Website, static pages Shared VPS Dedicated VPS Shared, dynamic Website Demand for Services Managed Dedicated Environment with Web Servers), DB, Storage, Security, etc. Dedicated Web Server with Root Access ARPU/S opportunities: Shared to VPS to Dedicated New SaaS Applications ARPU/S opportunities: Shared to VPS to Dedicated New SaaS Applications

Automation As A Competitive Advantage 16 Effect of Price Erosion Your Premium Customers $ / Customer # of Customers Your Typical Customers (Currently) “non addressable” Customers What if you: (A) Lower your cost of sale (i.e. lower barrier to entry) (B) Lower cost of operations Cost IT Optimization and Automation

Automation As A Competitive Advantage 17 What has happened/ is happening… PRICE EROSION GIANTS OPPORTUNITY CHALLENGES

Automation As A Competitive Advantage 18 Typical Challenges Managing Costs –Hosters are growing – problem is, costs are growing at the same speed –Must have economies of Scale Managing Complexity –The bigger the infrastructure the more complex the management, especially when no good management automation is in place Scalability to answer your growth –Can your platform automatically grow with your customer growth? –Horizontal and vertical? –Can you offer new services effectively and efficiently? Business Intelligence –Do you actually know your customers? –Know what kind of services they like? what they don’t like? –What is your churn rate and why are they leaving? –What is your up-selling ratio and for which services? –Which marketing plan is successful and which are not? Flexibility –Up sell, cross sell, upgrade, management –Can the change be done by the customer it self (its better for the customer and you!)

Automation As A Competitive Advantage 19 Typical Challenges Complete solution –for installation/configuration, upgrade/downgrade & management/monitoring Single Sign On –Does your customer have one single interface where they can logon to see and manage all services themselves? –Able to add new applications in the same single sign on concept? Billing Automation –Payment Collection –Maintaining Customer Information –Maintenance product catalog and pricing –Quickly deploy price changes in your billing system, online store and for your resellers Service‘s are like Islands –Different services, platforms, logins, invoices, etc. Provisioning complex applications services –Are Configuration and Deployment automated?

Automation As A Competitive Advantage 20 Agenda What has happened/ is happening… How to stay Competitive Automation the Secret to Success How can Parallels Help

Automation As A Competitive Advantage 21 How to stay competitive Pricing –Must be Low enough to attract customers and high enough to be Profitable Business Operations –Be paranoid about efficiency by elimination of manual processes –Full Automation and Self Management are key Broader Set Service Plans –Many & variety of services –Many & variety of applications –Give the customer a choice Better & flexible upgrade path –Variety of workloads –Variety of sizing options –Automatic upgrades

How To Achieve This? Virtualization & Automation –Helps for additional efficiency and flexibility –Remember to be paranoid about efficiency Business Automation –Automate every aspect of your business and system processes –Must be fully integrated across all customers, partners and service plans – it is so for the GIANTS! Focus –Maximize opportunities based on your Strengths –Where you could differentiate and cooperate, do so –Separately we lose, only cooperating we could win –Standards like APS Standard are required Have Optimized Infrastructure –Automate, Virtualize and Standardize Automation As A Competitive Advantage 22

Automation As A Competitive Advantage 23 Agenda What has happened/ is happening… How to keep Competitive Automation the Secret to Success How can Parallels Help

Automation As A Competitive Advantage 24 Secret to Success 24 Enabling your Business Hosting Business Automation Service & Support Marketing & 3 P’s Operations & Finance Marketing Good Products Good Pricing Good Promotion Service & Support Efficient Meets customer expectations Operations & Finance Process Driven Enabling Technology Rapid deployment of services 100% automated Scalable Automation is the main contributor to the value of ALL your services. Not automated = Not offered Automation is the main contributor to the value of ALL your services. Not automated = Not offered

Automation As A Competitive Advantage 25 Agenda What has happened/ is happening… How to keep Competitive Automation the Secret to Success How can Parallels Help

Automation As A Competitive Advantage 26 Standards provide automated application delivery SaaS Enabled! Control Panels help to Contain Costs and Grow Revenue High Cost Hard to Grow Manual Hosting Parallels Vision – Automation Cost of Service Delivery Scalability and New Service Creation (revenue opportunity) Service deliverySemi Service managementManual Service creationManual Simple Hosting Service deliveryAuto Service managementSemi Service creationManual Optimized Hosting Service deliveryAuto Service managementAuto Service creationAuto high costlow cost

Automation As A Competitive Advantage 27 Parallels Automation Overview Parallels Virtual Automation Powerful tool helping administrators manage their virtual infrastructure Parallels Operations Automation Solution for automating key IT processes and providing delegated management through the organization Parallels Business Automation Solution for automating key IT business functions including service ordering and chargeback accounting

Automation As A Competitive Advantage 28 Top 10 Reasons for Parallels Automation 1.Lowers your cost of operations and cost of sales –By automation of service provisioning, management and billing 2.Enables you to offer any kind of ISV application within a SaaS concept –Through one single service delivery platform 3.Enable quick time to market –Offer any ISV application as a SaaS model within 30 days in a complete automated provisioning and billing hosted solution 4.Highly scalable solution –Manage millions of accounts –It can be deployed in clustered and load-balanced configurations –Supporting mission-critical services on a high-level 5.Completely Customizable to your needs –Wide range of APIs and SDKs available

Automation As A Competitive Advantage 29 Top 10 Reasons for Parallels Automation 6.Central Business Intelligence/ Billing/ Ordering system –seamlessly integrates into your website and internal systems –gives you unique visibility into performance of your business - growth, profitability, churn, up-sell and cross sell effectiveness, etc 7.Unlimited reseller and white label capabilities –Resellers can build their own stores, manage their own pricing, and manage their own customers. Without limits 8.Proven solution –500+ deployments worldwide 9.Allows you to concentrate on what you do best – sell hosting services –Leave software development to us (largest dev team in the industry) –300+ developers and engineers working on Parallels Automation 10.Don’t reinvent the wheel we have already done it for you

Automation As A Competitive Advantage 30 Summary PARANOID CUSTOMER SATISFACTION CUSTOMER SATISFACTION REVENUE & PROFITABILITY REVENUE & PROFITABILITY DON‘T REINVENT THE WHEEL DON‘T REINVENT THE WHEEL

Automation As A Competitive Advantage 31 Don‘t try to be Albert Einstein by yourself… … he was already crazy enough… …take advantage of the Parallels Automation Einstein's Thank You Let us have a discussion now how we can help YOU as well… Let us have a discussion now how we can help YOU as well…