Beware, All You Other Clouds: Odin Wants His Cloud Back

Who would have thought it? Parallels, the developer of the Mac-based hosted virtualization product, had a service provider business. As of March 24, 2015, Parallels has split it off from its core business of selling hosted virtualization to Mac users and marketed it as “Odin.” Yes, Odin, the Norse god, king of Asgard. At first glance, this might seem slightly pretentious for a service provider.

According to Birger Steen, the chief executive officer of the Parallels group,

“Operating under two distinct brands will enable us to better serve customers, address market shifts and capitalize on the tremendous potential we see in both of our two businesses.…Odin will continue to focus on helping its more than 10,000 Service Provider customers worldwide drive profitable growth with cloud services. The Cross-Platform Solutions unit, Parallels, will continue to provide the best cross-platform experience to millions of users of Parallels Desktop for Mac, Parallels Access and its other market leading products.”

Wow—10,000 Service Provider customers. This may be one of the biggest companies you’ve never heard off. But let’s look at this statement more closely. 10,000 Service Provider customers: is that 10,000 customers who are service providers? Or is it 10,000 end user customers who consume the resources of the Service Provider customers? Looking at the website, it appears that Odin’s main market is the lower end, high density hosted web market service providers, which target SMBs. Companies like Rumahweb (one of the largest Indonesian service providers) and Hens Teeth (a Missouri-based hosting provider) are counted among Odin’s clients. These are low margin, high volume clients. They have to drive their host servers hard to get the maximum out of their hardware investment. This is not a bad market per se, but their customers’ margins are low, so value is driven by host density. They could get better density with vSphere, but at a much higher cost that would significantly erode the margins they make. Odin uses and sells Parallel’s other virtualization product, Virtuozzo, coupled with Plesk to host its cloud offering.

Now, what is interesting about Virtuozzo (Parallels Cloud Server) is that it is a Type 2 hypervisor that runs on specific versions of Linux. You might be surprised to find a hosted environment using a Type 2 hypervisor for its virtual presentation layer, but it can make sense in limited circumstances. The fact that it is a Type 2 hypervisor is well hidden; the installation routine installs like a bare metal hypervisor. However, Virtuozzo can also do native containers, and this is its killer feature, which overcomes its pedigree.

This is a unique position to be in, and one I think could be useful if you had a full host to yourself. Full machines hosting your back end services and containers that can be rapidly spun up and down as demand increases and decreases during a monthly business cycle is compelling. It will be interesting to see where this goes now that Odin is free to market itself without the Parallels name.