Tuesday, October 15, 2013

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.


Shachi Sharma said...
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Jonathan Stevens said...

Great stuff! Do you think they'll be even better and more user-friendly cloud storage that will get rid of the need for an effective IT manager? That's my real concern here!

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