May 19 -20 l Washington DC l Omni

May 19 -20 l Washington, DC l Omni Shoreham Automation as a Competitive Advantage Jan-Jaap Jager Managing Director - Asia / MEA , Parallels jjj@parallels. com

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

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

Hosting Industry • Industry continues to mature – Seen as a serious business • Market Consolidation – Leaders are buying followers/ close competitors – Leaders are buying smaller companies • Saa. S 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 Saa. S as well – Saa. S is SOFTWARE as a service. They are important partners if you are to take advantage of Saa. S opportunity – Does it make sense for ISV to be a Service Provider? 4 Automation As A Competitive Advantage

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

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

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

Hosting Market: Look ahead • Hosting market grew to $8. 2 B in 2006 (from $6. 8 B in 2005)* • US Market – represents only 50 -60% of worldwide market • By 2011, the market is predicted to grow to $16. 4 B* Saa. S % of Business Software Market Opportunity: $8 B increasing to $40 B 25% 20% 15% 10% 5% 0% 2006 2011 • Trend #1: Traditional hosting market is established and growing, but slowing down • Trend #2: Managed hosting and Saa. S are the growing segments* • Key Point: Changes may be required to sustain revenues and continue growth * source: IDC presentation at 2007 Parallels Hosting Summit 8 Automation As A Competitive Advantage

What has happened / is happening… OPPORTUNITY 9 Parallels Summit 2008 Automation As A Competitive Advantage GIANTS

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

Internet Giant – Amazon (and others) • Amazon Web Services? – S 3 – Amazon Simple Storage Service – EC 2 – Amazon Elastic Computer Cloud • Web. Stores targets merchants Home Page Found Web Services after scrolling down (not in the main departments). Targeting Developers Complex usage-based fees which are not understood by typical SMBs. Web. Stores Compete with e-commerce offerings - $60/month plus 7%. 11 Automation As A Competitive Advantage Screen Images

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

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

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

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

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

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

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!) 18 Automation As A Competitive Advantage

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? 19 Automation As A Competitive Advantage

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

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 21 Automation As A Competitive Advantage

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 22 Automation As A Competitive Advantage

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

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

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

Parallels Vision – Automation Scalability and New Service Creation (revenue opportunity) Optimized Hosting Service delivery Service management Service creation Simple Hosting Service delivery Service management Service creation Manual Hosting Service delivery Service management Service creation Semi Manual High Cost Hard to Grow high cost 26 Auto Semi Manual Control Panels help to Contain Costs and Grow Revenue Cost of Service Delivery Automation As A Competitive Advantage Standards provide automated application delivery Saa. S Enabled! low cost

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 27 Automation As A Competitive Advantage

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 Saa. S concept – Through one single service delivery platform 3. Enable quick time to market – Offer any ISV application as a Saa. S 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 – 28 Wide range of APIs and SDKs available Automation As A Competitive Advantage

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 29 Automation As A Competitive Advantage

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

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