Parallels to invest in Russian cloud solution project

Moscow Institute of Physics and Technology graduate Serguei Beloussov founded Parallels, a private IT company, that specializes in the automation and virtualization of hosting services. Source: Kommersant

Moscow Institute of Physics and Technology graduate Serguei Beloussov founded Parallels, a private IT company, that specializes in the automation and virtualization of hosting services. Source: Kommersant

Private company Parallels and Novosibirsk State University are working on a joint project to develop a scalable software platform to host cloud applications for small and medium-sized businesses.

Parallels, Inc., in association with Novosibirsk State University, will develop a software platform to provide cloud services for small and medium-sized enterprises (SMEs). The company is expected to invest more than 300 million rubles (about $10 million) in the project over the course of three years. As a result of an open competition, the same amount will be raised as subsidies from the Ministry of Education and Science.

Grants of up to 100 million rubles ($3.3 million) from the ministry were up for grabs, provided the companies invest at least the same amount themselves. Out of 281 bids, 71 were shortlisted, with the proposal by Novosibirsk State University and Parallels emerging as a clear winner.

Cloud hosting is an association of several servers that enables users to diversify the resources they allocate for projects, thereby significantly reducing the cost of purchasing expensive equipment.

The university will act as the contractor, while the Moscow Institute of Physics and Technology will be engaged to perform a part of the work. Parallels will contribute its software solutions and invest an additional 300 million rubles in the project. The two universities and the company have worked together since 2004, when they established a joint laboratory.

The project will take three years to complete, and most of the investments will be in software research and development. Under the terms and conditions of the competition, while Parallels will keep the rights to the developed solutions, the grant from the ministry will only be used to finance research conducted by Novosibirsk State University. The university was established in 1958, and around 6,000 students are currently enrolled there.

“The idea is to develop software in areas where Parallels already specializes. We will develop a new variety of software with new features, but the focus will remain the same: to produce software for providers who can use it to offer cloud services to small and medium-sized businesses,” director of academic programs at Parallels, Viktor Nikitin, said in an interview with BFM.ru.

Parallels specializes in the automation and virtualization of hosting services. It was founded in 1999 by Moscow Institute of Physics and Technology graduate Serguei Beloussov. The company has its headquarters in the United States and staffs 800 people.

Parallels-developed platforms for cloud services are operated by U.S. mobile giant Sprint, Latin America’s largest cellular company America Movil, and KPN (the Netherlands), Belgacom (Belgium), Swisscom (Switzerland), Telecom Italia, Telecom Austria, Portugaltelecom and Turktelecom in Europe. The list of service providers and distributors using Parallels solutions includes Coweb, Go Daddy, Intergenia, and HostEurope.

The company plans to launch the product in three years and break even in five. These ambitious plans are based on the rapid growth in the global market for cloud services for SMEs.

According to Parallels, the Russian market for cloud services for SMEs totaled 15.6 billion rubles (about $466 million) in 2012. The market is projected to expand by a further 15 percent by 2015, up to 37.7 billion rubles ($1.1 billion). Although the project between Parallels and Novosibirsk State University is a commercial initiative, the university will not share profits and will only gain expertise.

Market players are divided on the project.

“We should welcome efforts by the state to promote cloud solutions,” RASPO President Yulia Ovchinnikova told RBC Daily. “But why develop a hosting platform if we already have ready solutions, including solutions developed by Parallels? For 600 million rubles they can develop a real cloud platform, instead of promoting what they already have.”

Parallels claims the solutions that have already been developed by the company will not be used in the new platform and the software will have to be created from scratch.

Nikitin mentioned the non-commercial aspects of the project to BFM.ru.

“Universities will benefit from this unique R&D experience by implementing serious practical software projects, making their solutions production ready and gaining expertise in complex software development processes. As a result, new serious research teams will emerge in Novosibirsk State University and the Moscow Institute of Physics and Technology, and they will be in demand. The quality of training in software engineering and computing will also improve in both universities,” said Nikitin.

On Jan. 14 it was reported that European mobile phone operator Telenor would begin providing cloud services using the solutions developed by Russian engineers at Parallels Automation.

This article is based on materials by BFM, RBC Daily, Slon.ru, CNews and Kommersant.

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