At the Parallels Summit here in Orlando, there are about 750 to 800 hosting services that serve 5o to 70 million businesses.

This week, the event is the epicenter of  the Web hosting world, a universe well beyond the Silicon Valley and its continuous obsession with anything new.

My friend and colleague Krishnan Subramanian said this today on Twitter, which I think is an apt way describe this world:

Only when you go to an event like #parallelssummit, do you realize that an entire world exists beyond Silicon valley cloud bubble #justsayin

Parallels‘ focus is on SMB.  Hosting providers are key to its growth in offering its historical specialties such as its Plesk Panel, which serves as a turnkey of sorts for hosting providers. Its automation suite automate all aspects of offering, delivering, managing, and billing services offered by hosting providers. Parallels Virtuozzo provides a server virtualization environment for customers.

Parallels has 850 employees and is closing in on $1 billion in revenues. Through its hosting partners, the company serves 12 million small businesses in 125 countries.

Parallels estimates the small business market for IT is worth $1.1 trillion. Cloud spending for the SMB market came to about $34 billion in 2011. The market is expected to double to $68 billion by 2014.

Parallels estimates that 60% will be spent through the channel and 50% through a partner.

The community of people who follow the emerging Web rarely venture into the hosting world.

There are a few reasons for that. First off, it’s hosting, not cloud. It’s almost void of a developer community and APIs are just beginning to get accepted.

But ironically its Amazon Web Services (AWS) that Parallels recognizes as a potential distant challenger. We heard that from CEO Birger Steen in an analyst meeting on Tuesday who said this may not come to be until 2017 but the threat is real.

Parallels President Jack Zuvarev said that AWS is focused on enterprise, not the small business market so the threat at this point is really theoretical.

“It is impossible for small businesses to use management control panels,” Zuvarey said. “SMBs do not consume APIs. SMBs use easy to configure screens.”

AWS may go after the SMB market or the threat may be more from the developers who use AWS to provide various services that companies can use.

Services Angle

The small business market is a different beast. Parallels has learned it’s one that is deeply tied to the hosting market. These hosting services develop relationships with small businesses that will often last for many years. They build through word of mouth.

Parallels faces a number of competitors besides AWS. VMware, IBM and HP could all be potential threats. But none seem to have the focus that Parallels does on hosting providers. At least for the foreseeable future.

Disclosure: Parallels covered my travel and hotel stay to attend the Parallel Summit.