Businessmodel of Parallels

Customer Segments

Parallels has a mass market business model, with no significant differentiation between customer segments. The company targets its offering at firms across industries seeking virtualization solutions.

Value Proposition

Parallels offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility by offering a wide variety of options. Using its solution, customers can access their files and applications on any device or operating system (Windows, iOS, Mac, Android) from any location (remote, local, in the cloud, or in a private datacenter).

The company offers convenience by making operations simpler for its clients. Its solution enables users to access all of their files and applications in one place, 24/7.

The company has established a strong brand due to its success. It has grown more than 30% per year for five years, and has over 1,000 employees operating out of over 15 offices. It has more than 10 million customers and over 800 partnerships with firms such as Apple, Microsoft, and IntelPlease. Its Parallels Desktop for Mac software has a 78% market share and is used by over 50% of Fortune 200 companies. It has won many honors, including a Best of TechEd Award from Microsoft (2014), placement on the Red Herring Global 100, and a ranking among Forbes’“The Best Cloud Computing Companies And CEOs To Work For In 2015” list (#2).

Channels

Parallels’ main channel is its direct sales team. The company promotes its offering through its website, social media pages, conferences, and other industry events.

Customer Relationships

Parallels’ customer relationship is primarily of a self-service, automated nature. Customers utilize its software and platform while having limited interaction with employees. The company’s website features a “Support” section that includes product downloads and documentation. It also features an “SMB Insight Report Center” that includes reports showing the results of small business surveys on technology. Moreover, Parallels provides access to an e-mail newsletter.

Despite this orientation, there is a personal assistance component in the form of phone, e-mail, and social media support. There is also a community element in the form of a forum.

Key Activities

Parallels’ business model entails maintaining a robust platform and designing and developing software for its clients.

Key Partners

Parallels maintains two partnership programs:

• Parallels Partner Program for Business Solutions – Parallels works with firms that sell its solutions to their customers in order to expand its reach. Specific types of partners include resellers, distributors, independent software vendors, managed service providers, and commercial customers. Program members receive benefits such as dedicated sales support and training/marketing materials.
• Parallels Affiliate Program – Parallels invites third parties to promote its offerings on their platforms (websites, mobile apps, etc.). Leads that result in the purchase of its products earn the third party a commission of up to 15% (based on site traffic and subscriber count) of the purchase total. ### Key Resources

Parallels’ main resource is its proprietary software platform.

It depends on human resources in the form of engineering employees to maintain the platform and develop software and its customer service employees to provide support.

Its important physical resources include development centers in Moscow and Novosibirsk. The company also places a high priority on intellectual property, with over 100 patents that have been issued or are pending.

Lastly, as a startup it has relied on funding from outside parties, raising $12.4 million from five investors as of April 2014.

Cost Structure

Parallels has a cost-driven structure, aiming to minimize expenses through significant automation.

Its biggest cost driver is likely sales/marketing, a fixed expense. Other major drivers are in the areas of customer support/operations and product development, both fixed costs.

Revenue Streams

Parallels has two revenue streams:

• Product Revenues – Revenues generated from sales of the company’s software products.
• Subscription Revenues – Revenues generated from subscription fees charged for access to the company’s cloud platform.