Interview with Sergey Belousov

Sergey Belousov is the founder and head of Parallels , which, in his own words, works in the "nonexistent" virtualization software market. This market, however, has provided it with hundreds of millions of dollars in annual turnover, headquarters in Switzerland, offices in Asia, the United States and throughout Europe, as well as a strong place alongside companies such as Citrix, VMware and Microsoft.

In addition, Sergey is a co-owner of Acronis, which is widely known abroad for its backup and data recovery systems. In general, over 15 years, under his leadership or direct participation, more than 10 companies were created around the world, each of which began to make a profit less than a year after the start of work. It may seem interesting to you that in the late 90s. It was he who participated in the formation of the Sunrise retail chain and the consumer electronics manufacturer Rolsen. But he is not currently engaged in the operational management of these companies, having fully concentrated his efforts on Parallels.

Despite such an impressive experience, Belousov does not seek to once again draw public attention to his person. And according to his colleagues, he spends half his life on business flights between continents. So to find him for a conversation in Moscow is a rare opportunity, which I gladly agreed to take advantage of. That's about the “personality cult”, about the team’s value, about the young generation of Russian IT specialists and, of course, about the crisis, we talked with him.

Before the start of the interview, I notice a figurine of the Runet Prize, which stands on a cabinet in the corner of Sergey’s office. I wonder what she is for. He says that he no longer remembers how long ago it was ( it turned out that in 2004 Parallels, then SWsoft, took a special nomination) “I even threatened to break the glass in the room with it if our business executives did not make ventilation,” he recalls. Belousov, smiling, allows me to weigh the gilded column in my hand - and the truth is, you can break through any double-glazed window like this. The fact is that the business center on Altufevskoye Shosse, where the Parallels office is located , was wonderfully built so that not a single window opened in it.

Based on such an unusual approach to the symbols of recognition in society, we begin a conversation.

I have read several interviews with you lately. In one of them, the author noted that you do not flash in the headlines. But this is, in fact, not the case. Have you started to purposefully engage in popularizing yourself?

In fact, I do not strive for "self-popularization", but to promote our company and what it does. But for some reason, our PR specialists, unfortunately, turned this into popularizing me. All the time they promise that this will stop, but does not stop, and the cult of personality is not far away. (Smiles reproachfully.) But in general, the press has already begun to interview other members of our team: Stas Protasov, Kolya Dobrovolsky. Here I play the maximum role of a producer, and there are still screenwriters, directors, and light sources.

Software development is the fruit of teamwork. And we need fame in order to make it easier to hire more advanced developers and managers. We have interesting, but at the same time sophisticated technologies. In addition to intelligence, education, the candidate must also have experience. Without experience, he will not be able to write high-quality system software. And there are very few experienced people.

You once said that in the 90s businesses in IT were created by people who studied mathematics and physics at the university, and came to IT in some roundabout way. And is there already a new generation of young specialists who immediately studied for this industry?

Maybe there is. But I think that, in general, the quality of specialists who are supplied by the education system has deteriorated. After all, education is such a complicated thing in our country, which was first built for many, many years, then collapsed for many years, and now it will be restored for many years. Therefore, experts of the 90s, although they studied at physicists and mathematicians, but received an excellent education. They had good teachers, they studied hard and hard.

Probably, in recent years, the educational system is still recovering. But those people who can now be hired from universities, although they received a more focused education, but its quality is an order of magnitude lower. The old teaching staff naturally “leaves”, students have less time to study, because almost all of them still need to earn money.

This applies to technicians. What about managers and marketers? In your opinion, can a business prepare them for itself?

This applies to everyone. I do not think that business can independently revive the education system. For him, this is fraught with too long a return on investment. Still, education is the task of the state. Investments in it are returned after 10 years, and maybe even after all 30. Such horizons are usually inaccessible to business.

But you open your basic departments and scientific laboratories in some universities ...

Yes, but this does not replace education. This is just some kind of supplement. In our laboratories, we try to select specialists for ourselves and somehow direct their thoughts into topics that relate to the technologies that we are developing.

Are you somehow attracted to technology parks?

No, we didn’t think much about it. One of the main problems that technology parks solve is the high rental value of real estate. Our IT business is traditionally grouped around Moscow, and in Moscow, offices are expensive - ten times more expensive than in America. We pay a rental of $ 600 / m2 per year (and it's cheap by Moscow standards!). For normal working conditions per person, 10 m2 is needed, so consider: in Moscow, one person per year can cost $ 10 thousand. And this is a huge part of the specialist’s salary. In the West, by the way, there are no technology parks precisely for this reason - young companies need very small initial investments for rent there anyway.
But in general, our specialist is still cheaper than in the USA. There is simply more salary.

But this does not mean that in Russia a unit of the manufactured product is cheaper. Labor efficiency at a company like Microsoft is significantly higher than at the average software company in Russia. Yes, our efficiency is gradually increasing, we are constantly introducing some new technological processes. But it takes time. Microsoft has been doing this for 30 years, our team is only 10 so far, and none of the Russian major developers is more than 15.

And what else, besides cheap real estate, does a young company need?

For small companies to appear, you need venture financing, which in Russia actually does not exist yet. Real funds can be counted on the fingers. Therefore, small companies are formed a little. This does not mean that the actual demand for venture capital funds exceeds supply. No supply - no demand. But the potential demand is probably many times higher than the current supply.

The tendency when startups strive to immediately reach the payback level and start making money without waiting for investors is, of course, very good. But practically no idea can be developed without investments. We are talking about any investments: even when 10 specialists make a project for a year, they finance it with their unearned salaries.

All small companies should now work in the near future. They cannot afford to think about what will happen in 10 years, because if they do not focus on what will happen in 3 years, they may simply not survive these 3 years.

And is there still no staff turnover from large companies to small ones? How do you feel about the now popular idea to dismiss dear developers, and then hire them again, but already at half the salaries?

That's bullshit. The main thing is not just minimizing costs, but reaching a certain level of productivity. And such methods, perhaps, reduce the cost of the work of professionals by 10-20%, but at the same time completely demotivate them. Efficiency worsens several times. We won’t go for it. In addition, now, and this is a positive moment of the crisis, our staff turnover has decreased, and we do not need any radical methods.

So we got to the crisis. In your opinion, how much do you need to divide the forecasts for this year in terms of sales, profits, and software export volumes ..?

This is a difficult question. You can try to answer, but most likely there will be a finger in the sky. The global economy is a very complex system. And most importantly, it is changing very much now. Since the last crisis of 2001, it has become much more global. We used to have many small seas, all the storms in which were known and predictable. And then all of these seas suddenly joined together. And it’s very difficult to say what will happen in this huge new sea, because no one has yet seen storms in it. For estimates and forecasts, there are many indicators. All more or less accurate predictions can be made later in the second quarter of this year.

Regarding forecasts of the software market development, everything here is very dependent on the type of software. For example, Acronis will have 15-20 percent less sales this quarter than it could be. Kaspersky, I think, can also have a significant drop, but less than Acronis, because it’s security - it’s more difficult to do without it. But Parallels doesn’t - we have other software, it helps to immediately start saving on the operation of the server infrastructure after its implementation. For software that can be dispensed with, the drop in sales will be stronger, and for the one that saves, much less.

Is now everyone just sitting and waiting for what will happen?

Yes, everyone is sitting and waiting, focusing, trying to cut costs, make more conservative decisions on long-term investments, but they wait.

At a recent conference, it was thought that the practice of reducing costs by investing in IT is crazy. Do you support this idea?

Information technology increases the productivity of business processes. Therefore, reducing the IT budget in order to save can lead to the opposite effect. But it is worth recognizing that companies buy a lot of excess. And now this is superfluous, probably, they will acquire less now.

In the Russian IT industry, it seems, there are already not enough “icons” that people could follow into it. You, David Yang from ABBYY, Eugene Kaspersky and people from much less well-known but powerful companies could become such “icons”. What are the prospects for Russian companies in the global IT Olympus?

Legally Parallels is not a Russian company. But, of course, we are related to Russia: of course, I was born, studied and raised in Russia, I have a Russian surname and I am not going to change it. The basis of our team is Russian people, also with Russian surnames. All products we sell are developed here. And more than 600 of our 800 employees work here.

As for global recognition, I think that many of our small companies can conduct larger business. And Kaspersky, and Acronis, and Parallels - we are in a transition period through which everyone goes. The company is no longer small, but also not large. In addition, most of these companies are private. In principle, they could become public by placing their papers somewhere. But it is obvious that due to the financial crisis this will not happen for a long time, two years. In general, a software company can be considered successful if it has reached a billion dollar turnover, and up to this point all of us are far enough away. Therefore, they will remain more or less invisible for now - just enough other worries.

By the way, this interview was recorded before the New Year. But from the fact that it still has not lost its relevance, it seems to me only more interesting.