Tuesday, March 4, 2014

6 Reasons Why DaaS and VDI Terms Undervalue The Reality

A day doesn’t pass that I find myself explaining why DaaS isn’t synonymous with VDI – and neither term does justice to the real range of value possible.

Both end-users and service providers have a preconceived notion that DaaS simply means delivery of a “desktop”. But that simplistic VDI-style mindset (and desktop-only mindset) doesn’t describe the real range of services possible. Rather, the terms we really should be using are “Hosted Workspaces” or “Workspace-as-a-Service“.. (more: originally posted on blogs.citrix.com

Thursday, February 6, 2014

Managed Services Providers Agree: Build a Vertical Market DaaS Focus

A few weeks ago I had the privilege of speaking with a number of our Citrix Service Providers at Citrix Summit in Orlando.

There is no doubt in my mind that the Managed Services industry is shifting… away from commodity services (dedicated servers, websites, Exchange mailboxes) and toward more holistic, higher-value hosting and outsourcing services.

The evidence I cite is both from a Service Provider panel I facilitated, as well as from assessing the winners of the recent Citrix CSP Awards.

Heard at the Panel

My first set of data points came from a panel I ran covering the importance of choosing a vertical industry focus. On it I had the honor to sit with Frank Butler, CEO of Proxios, John Alston, CEO of ClubDrive Systems, Byron Patrick of Simplified Innovations, and Ted Eisley of Microsoft.

Whether the founder's intent was to focus on a vertical from the start, or whether they organically developed their vertical foci, the panel agreed that choosing one or more vertical markets was good for business.  It made marketing and prospecting easier. It allowed for a more replicatable set of offers. It enabled them to re-use line-of-business applications more frequently. And it enabled them to charge healthy premiums on their services because they were delivering such specific value.  Indeed, my Differentiate or Die theory was alive and well!

Some data points I took away from our discussion:
  • Living your business helps business come to you: One benefit of tenacious focus on a market is that "the business comes to you" Byron Patrick is so focused on the CPA market that he attends all of the professional networking and development meetings in his geography. Both he and his company are know quantities in the industry. He's the de-factor "go-to-guy" And that makes business developing (dare we call it marketing) all that much easier.

  • A low price is not (necessarily) the goal: All panelists agreed that competing on price was not their goal. Doing so is a race to the bottom. Rather, they competed on service and overall value. And surprisingly, when asked about prices for the DaaS offerings, many said they can easily charge in excess of $100/seat/month, sometimes more than twice that -- assuming that the value they provided (i.e. line-of-business applications, bundled services, etc.) was commensurate.
  • Knowing the market means knowing customer assessments:  Another great question from the audience had to do with how much customer assessment was needed to "size-up" an opportunity and arrive at price for migration and on-going DaaS service. And a nearly unanimous response from the panel was that, once you've done a few similar vertical engagements, understanding the gotchas and pit-falls gets a lot easier.
  • Speaking the vernacular simplifies marketing: Each CEO focused on a different market. But each knew that market and could speak the language of the buyer, as well as the language of the user. They knew the compliance and regulatory factors. They knew the top vertical apps. They knew how to speak to the issues and concerns of the customer in each market. Now that's not something you can fake. It only comes with focus and experience.
Seen at the Awards

The other set of data points I reference is from the Citrix Service Provider Awards ceremony.

The winning Service provider for Marketing Excellence, MindShift, won on the basis of their comprehensive approach to accurately messaging their services to the specific business goals of their audience.  But all entrants and semi-finalists outlined focus. Focus on specific markets, use types, applications, and sometimes even technology.  

As I'd heard in the panel, the Awards finalists all started with an intentional DaaS service definition, that evolved over time to meet the needs of one or more specific markets.

And by doing so, the successful Service Providers have consistently seen double-digit seat growth annually.



Got a question? Comment? I'd love to hear your input.

Tuesday, October 29, 2013

A Tale of Three Cloud Strategies (Upgraded from Two)


Earlier in March I penned a blog titled A Tale of Two Cloud Strategies and observed the two opposing cloud strategies of VMware vs. AWS. VMware, with its strength in the enterprise, building presence in the public cloud -- and AWS with de facto dominance in the public cloud, working inroads into the enterprise.

In my closing paragraph I noted
These will be extraordinary strategies to observe over time. We all know that even the most dominating companies/technologies eventually meet their match (or their disruption).  Both VMware and AWS have appeared at times to be unstoppable. As they converge, it will surely be a battle of gladiators.  Unless (or until) of course, third, fourth and dark-horse players disrupt the party. As they always do. 
And, sure enough, here comes the Number Three - and predictable - gladiator.

Enter: Microsoft Azure - and Windows Server 

Azure has been gaining ground (and functionality) steadily.  Earlier in the year Azure GM Steven Martin hyped that 50% of the F500 companies were now using the service. And just the other day, Microsoft reported 103% growth quarter (includes Office 365). But that's not the real story IMO.

The company has also released (with a new name) the Windows Azure Pack. When used with Windows Server and System Center, it allows enterprises and service providers to generate Azure services -- using Azure APIs. Furthermore, it simplifies creating hybrid services between the data center and Azure, including capacity expansion, fail-over and DR.

Trojan horse? No - simply a clever strategy.  They are lowering (and nearly eliminating) the barriers to adoption of the public cloud by introducing it as a service extension of Windows you already own. And this way, any enterprise or service provider can go public/private/hybrid on their own timetable.

It's Now a Three-Horse Race. Do I hear Four?

VMware, AWS and Microsoft are off to the races for dominance of the hybrid cloud. Will there be a fourth?  And, will the market segment into 3 preferences? Or, will users demand greater interoperability and fight lock-in.

Stay tuned until our next episode...

Tuesday, October 15, 2013

Succeeding with Daas: For MSPs, Business Help Outweighs Technology Hype

By now you may have heard of a new entrant into the Desktop-as-a-Service market, with VMware buying Desktone.  While I applaud the move that will help mature the market, I have to add some sobriety to their party atmosphere. Technology alone does not sell product - especially where the Managed Service Provider (MSP) channel is involved. Putting it Bluntly - Support the Business! Soundbites would have MSPs believe that VMware’s thousands of partners will instantly be able to stand-up and sell DaaS.  Our experience shows that vendors also have to provide the MSP with business assistance – planning, market guidance, sales training, support pointers - if the offer is to succeed in the market.  The build-it-and-they-will-come mentality doesn’t work...  [Continued on blogs.citrix.com]

Desktops-as-a-Service: The Rising Tide Lifts All Ships

New Entrants VMware and AWS Will Raise Awareness

(updated 13 Nov 2013)

If you look at Gartner Research's 2013 Hype Cycle for IT Infrastructure and Outsourcing Services, you'll find Hosted Virtual Desktops (HVDs) at the very peak of hype this year, outdistancing all other technologies.

For years HVDs were considered a niche technology, where an outsourcing provider (typically a Managed Service Provider or MSP) delivers virtualized desktops from an external source. Think: Cloud-hosted desktops. The cloud-hosted virtual desktop segment is sometimes referred-to just as Desktops-as-a-Service (DaaS) implying that the desktops are on-demand, regardless of where they are sourced.

To date, many reasons have throttled broad adoption: Cost, user experience, network speed/latency, doubts about reliability/availability, and more.  But the environment is changing and growing. And that growth will be accelerating.

Analysts closely track the DaaS market, including estimates for areas of adoption, market size and growth rates (see my recent Blog, How big is the hosted desktop market?) But all of those estimates were based on a market formed by a few vendors. By my own estimate, Citrix's installed base of Service Providers currently leads the pack in terms of worldwide partners and installed DaaS seats.  Additionally Desktone has been vying for second place, with TuCloud, Dincloud and others also proliferating offerings. An excellent (albeit year-old) assessment of the state of DaaS is the 451 Research "Desktops as a Service: New approaches to desktop management from cloud service providers" study.

But without a second (or third) source of DaaS from a major vendor besides Citrix, the perceived market size (and customers' comfort to consume) has been limited. Up until now.

VMWare - Welcome to the Party
Recently VMware's End-User Computing group announced their acquisition of Desktone and its DaaS infrastructure technology. Clearly VMware sees an opportunity to combine its view of the cloud with the opportunity to further serve the enterprise's needs for desktop infrastructure.  And while Desktone is a relatively small player in the market, VMware must assume that aligning their technology with their existing Horizon suite of enterprise virtual desktops will create a large new cash stream for the company.

But this move also represents an important step towards raising the Tide for DaaS, toward validating and maturing delivery of HVDs from the cloud. VMware, as a major supplier to Enterprise IT, has put its money behind the bet - indicating that there is money to be made, and that economic opportunity is outweighing hype.  In my opinion, we'll see analysts like Gartner, IDC and 451 begin to adjust their DaaS targets upwards, as vendors begin to make the market. To be sure, customers drive the decision. But they also follow reputable vendors' direction.

This rising tide will also be a wake-up call to other major software and/or cloud vendors. Think: Amazon... Think Azure...  I'm betting it may well signal that major cloud vendors will also jump into the DaaS game themselves. And when that happens, the market estimates will again move upwards.

AWS - Welcome to the Party (added November 2013)
Also signaling a shift of cloud-hosted desktops to mainstream is Amazon Workspaces. In my opinion, this move caps the claim that all major vendors see this market as growing and lucrative.  Whereas the market was driving by the demand side, Amazon's move will now drive the market from the supply side as well.

Although AWS will (currently) only offer what I'll term "Basic VDI" I would expect this may meet the needs for basic short-term desktop needs.

Impact on Enterprises, SMBs and Service Providers
While statistics show that SMBs are the largest adopters of DaaS, enterprise IT is taking interest too. DaaS provides not only mobility to employees, but enables BYO device programs, enhances data security, and more.  It is much, much more than just a cost reduction play.

The beauty of DaaS is that it takes the desktop off the desk - and often even out of the datacenter. It simplifies IT's job by taking the day-to-day equipment and OS maintenance off the to-do list so IT can focus on higher-value functions. And it's working, as companies outsource their desktops to Managed Service Providers (MSPs) and others.

Speaking of Service Providers, the DaaS opportunity is a potential boon for them. More SPs are standing-up DaaS environments - but understand that to succeed, the SP offers are absolutely not commodities. The successful SPs are differentiating their offers, pursuing special-purpose DaaS offers along vertical markets and/or regulatory lines (see my Differentiate or Die piece). These SPs use DaaS technology from vendors such as Citrix to stand-up a reference architecture and then bundle-in other applications, voice services, file-sharing technologies, and even Mobile Device Management products.  Don't believe me? There are scads to choose from out there.

Crossing the Trough of Disillusionment
Circling back to Gartner's Hype cycle: Critical to a new technology's maturity and sustained market presence is how quickly it crosses the Trough of Disillusionment on the way to the Plateau of Productivity.

Crossing quickly requires a combination of vendor support, market ubiquity and (hold your breath) products that work and add unique value. The good news is that DaaS really does work - over the past few years we at Citrix have seen its growth as the proverbial hockey stick. And it adds real value too - in the areas of employee mobility, BYO device programs, data security, maintenance reduction and especially cost containment.

My sense is that 2014 will add DaaS to the vernacular in nearly all major Service Provider and SMB IT conversations. And I can't wait to see how high this tide will be.




Tuesday, August 20, 2013

Service Definition for Hosted Desktops – Where to Begin

Managed service providers know they want to offer exemplary customer-focused hosted services including apps and hosted desktops. But these firms (players ranging from niche players to global Telcos) also allstruggle with the same questions: What are the right services to lead with? What customer sizes should I pursue in what markets? Does market geography matter? How and when should I expand my services offers?....  

[Continued on blogs.citrix.com

Tuesday, July 23, 2013

Your Next Computer… in the Cloud?

For years, the “virtual PC” has been the dream of users and corporations alike. After all, why do millions of us lug around a laptop with our Windows desktop stuck to it? Why do we risk theft, loss or damage to valuable data when our entire workspace -- and data – could instead live in the cloud and be accessed from anywhere by any of our devices... 

[continued as guest Blog on Wired Innovation Insights]