Desktop in the Cloud: Capitalizing on the Key Business Drivers

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on the Key Business Drivers

November 5, 2010

Issue

Current Analysis deﬁ nes desktop virtualization (DV) as the ability to provision ‘any or all’ components tied in with the traditional desktop estate in a cloud-like environment. In the old world, hardware, ap-plications, operating systems, data, and user settings were tightly bound, shipped and sold as one unit. In the new world, any or all of these components can be broken oﬀ and provisioned independently. Despite the level of comfort many IT managers have with server virtualization and increasingly with storage virtualization, the level of adoption for desktop virtualization is relatively low. Only around 10% of IT managers report deploying DV in some form.

Why is this? Th e business case is diﬃ cult. If the customer expectation of DV is solely on cost-savings through a like for like replacement moving from physical to virtual environments, the business case does not stack up. Replacing a physical desktop with a virtual desktop infrastructure can increase costs by a factor of 1.5 to 2. Th ere are additional costs with new hardware, network resources and capacity. When vendors tell customers that VDI, for example, is cheaper, it creates the wrong expectation which ulti-mately undermines the sales process.

So why is desktop virtualization considered to have so much potential in the cloud services market? DV also ties in with many other high priority IT topics. Th is includes a migration to Windows 7, increasing security, supporting ‘location independence’ without losing control, advancing a green IT agenda and supporting employees by ‘roles.’ Some companies are looking at these technologies as an enabler for transformation in the workplace. Th is advisory considers the drivers for DV, barriers to adoption and provides tactical advice for enterprises (and service providers) considering the journey to desktops in the cloud. Research is based on interviews with end-users, vendors and IT suppliers.

For assessments of individual IT suppliers, please refer to the Product Intelligence Reports for Virtual Desktop Solutions and/or Workspace Management.

Current Perspective

DV is the ability to provision ‘any or all’ components tied in with the traditional desktop estate in a cloud-like environment. Th is includes ability to provision services on the ﬂ y, elasticity, scalability, with elements of utility pricing. Th is can be dedicated to one customer (e.g., private environment) or deployed as a multi-tenant solution where components such as network resources and storage are shared among multiple customers.

  Dustin Kehoe Current Analysis Principal Analyst, Business Network and IT Services

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Table 1: DV - Ability to Virtualize Components

DV has a relatively high level of interest and will soon become one of the fastest growing areas within the cloud services market. Th e most common reason why enterprises opt for this type of solution is to lower costs. However, this also has to extend to other components such as improving security and business continuity through to enabling ‘location independence.’ DV is also deployed as part of a broader workspace transformation strategy and links through to supporting the proliferation of devices (e.g., laptops, smartphones and devices) within the enterprise and ﬁ nding a way to manage them securely.

Business Drivers for Desktop Virtualization #1 Cost Savings

Cost savings are the ‘holy grail’ behind enterprise decision to deploy DV. However since ‘like for like’ comparisons in moving from a physical (e.g., laptop, PC) to a virtual environment are diffi cult, customers and service providers need to look at indirect savings to make the business case stronger. Th is includes accelerating the confi guration and deployment of new desktops. With DV, manual processes and desk side support can be completely eliminated with a defi ned set of images deployed from the data center to the desktop allowing IT managers to add a user from a service catalogue, specify an image and push out to the user in minutes. It is up to the customer to work with its suppliers in defi ning and industrializing a set of images to bring economies of scale. With DV, the patching and updating of services is also easier and upgrades can be made within a few minutes which reduce management costs. Technologies, such as Intel vPro, enables upgrades during non-working hours (based on a timer) to eliminate any disruption during working hours. Applications can also be streamed to traditional desktop reducing potential confl icts. Virtual desktop infrastructure (VDI), for example, can eliminate the costs of sending of out fi eld engineers altogether as client side devices can be shipped out with 24-48 hours and managed the same way as mobile devices. Th e cost of sending out an engineer to a location tends to be the most expensive line item in end user services. Other items such as e-mail support and software distribution can also be mitigated.

In the medium term, there will be more demand for VDI to be deployed as a ‘shared service.’ Cisco, for example, has announced a partnership with Citrix where the two companies have common fabrics for public, multi-tenant and private desktop environments. Th ere will also be more demands from the government sector looking at desktop services as a ‘shared service’ across departments. Suppliers such as Atos Origin have signed such a framework for the UK government, which off ers standard confi gurations and per-seat pricing. Fujitsu is also building up white label partnerships off ering VDI capabilities in blocks which allow smaller IT companies and potentially carriers to sell VDI capabilities under their own label in smaller pieces. Th is is an ideal solution for targeting SMEs and the mid-market accounts. Many carriers are also putting VDI into their product roadmaps, which will open a new dynamic.

Th ere is also a lot of movement in Desktop as a Service (DaaS) which avoids upfront costs in Report:

Desktop in the Cloud: Capitalizing on the Key Business Drivers

Business Network and IT Services

Hardware Ability to move between desktops; often used to support hot desks. VDI and server based computing are very common.

Operating Systems Using several OS from one machine; often used in testing and develop-ment and power users

Applications Streaming applications without confl icts with legacy apps; often used along-side Windows 7 migrations. This can also be deployed with a SaaS-type delivery model.

Data and User Settings

Ability to have data and settings follow user from one environment to an-other; future will be in ability to move data and user settings between fi xed and mobile devices.

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hardware and storage (similar to the Amazon model). IBM is one such supplier that has a standard DaaS capability with utility pricing. At least one provider of VDI surveyed revealed plans to launch DaaS within the next 90 days. Th e main diﬀ erence in this providers approach to DaaS over VDI is that data center, storage and network resources are shared between customers. Oﬀ ers are positioned as multi-tenant solutions, tend to be highly standardized and priced per seat in the EUR 20 to 40 on a per user, per month basis. Minimum contract periods of three years are still the norm. DaaS also holds some promise in mitigating the asymmetrical costs from moving from a physical environment to virtual and back to physical. However some of the immediate customer concerns will be around security (e.g., multi-tenant solutions are perceived to be less secure than private environments). Some customers only see multi-tenancy as being suitable for a limited set of use cases, such as testing and development whereas private environments (although more expensive) for enterprise class production environments.

#2 Savings through Better End Point Security

DV can also have a number of benefi ts around security such as the ability to set policy, under-stand application estate, turn on and off any number of services on laptops and desk slide clients remotely. For example, a number of customers have deployed DV to enable the containerization of applications and the OS. In the event business critical applications are not checked in and certifi ed (via proper identifi cation) in an amount of time set by policy, the applications are disabled centrally. Th ese types of solutions tend to be favored by customers with large fi eld workers storing sensitive data on local devices and need additional protection in cases when equipment goes miss-ing. Th ese tools are similar to the remote ‘lock and wipe’ capabilities from MDM vendors. Other companies surveyed have used VDI, for example, to set up branch offi ces in remote regions without storing data locally on any laptops, servers or other equipment. VDI has also been de-ployed by some verticals, such as government and fi nancial services, to support business continuity in disasters. Th e most common user cases have been around pandemics such as bird fl u. Mitsubishi Financial Group, for example, is implementing a large DV solution to support location-inde-pendence which in turn mitigates risk. Th e group wants to guarantee continuity of operations, as well as improve mobility without compromising control. VDI is also being implemented in the education sector at all levels. Primary and secondary schools, for example, have also deployed desktop virtualization to get more utilization from donated computers. Th ere are other applications supporting testing, training and e-learning uses.

A number of suppliers have added automation VDI to set up or tear down a desktop estate in 20 minutes. Th ere are also some user cases where VDI is being deployed in call center environments that either need to be built on the fl y in response to an emergency or to support planned events such as the Olympic Games. In these scenarios, facilities need to be on a short-term basis and time to market is important. VDI is the typical solution deployed here and the commercial contract is moving toward OpEx-based, pay as you go type off er. We are also seeing VDI deployed alongside shared infrastructure services, such as unifi ed communications as a service, online back-up and storage.

#3 Mapping Employee Profi les to ‘Apps and Price Points’

Rather than issuing standard laptops and devices for all users, desktop virtualization allows enter-prises to build secure environments around individual roles within a company to meet their needs at the right price point. Th is is done by balancing the level of sophistication and processing power in the device to provide the end-user with an ‘acceptable’ experience and at the right price point. Many suppliers surveyed are looking to oﬀ er pre-deﬁ ned packages to support individual roles in a company.

On the low end are a range of kiosk type solutions that may have applications hosted locally and Report:

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have a point of sale function for a retail clerk or a self-service kiosk for hotel or fl ight check-in. In the middle tier would be solutions for employees (e.g., call center agents, factory workers) that only require a limited set of features and a basic device (e.g., thin client, terminal service). At the next level are the traditional ‘offi ce workers’ (e.g., HR, fi nance, operations and marketing) that require a traditional desktop (thick client) for a richer experience. Employees could also deploy SaaS, but would also have ability to access higher-end multi-media applications, collaboration and video streaming technologies which is not possible with thin devices or most mobile devices. Th e tradeoff here would be a higher price point. Finally the mobile worker (e.g., commuter or road warrior) will tend to require specifi c applications deployed to the device reliably, high availability access to e-mail, endpoint management, security and offl ine access. While every enterprise is diff erent, some of the leading IT suppliers, such as HP, are beginning to build solutions designed for key verticals such as fi nance and government leveraging their own expertise. T-Systems has priced its service to four main roles and uses a well-defi ned per seat pricing model.

Table 2: IT Suppliers Building Modularized Solutions with Considerations Around Functionality and Price

#4 Savings through Workplace Transformation

DV is also used to support new ways of working in the enterprise. A number of companies have used DV as a means of introducing new company policies where employees are allocated a fi xed amount to buy their own laptops and devices that can then be secured for the work environment. DV is also being used more to support the rise of employees working from home or remote off -shore locations. Other managers have noted that sometimes new and faster equipment has changed working practices. Th e Royal Mail, for example, noted that before DV each PC took 15 minutes to start in the legacy environment. In the new environment, each took only several minutes to start up. When multiplied by 30,000 desks across nearly 3,000 sites the savings here were signifi cant, which in turn had a knock-on eff ect on working practices with employees spending more time at their desks in the morning. CSC provided Th e Royal Mail with VDI as well as Microsoft BPOS. IT transformation is a journey in which DV is only a subset. However, as a technology, it can help facilitate that discussion given the fact it has a lot of touch points with shared services, SaaS and adjacent on-demand off erings such as cloud storage, mobile device management and back-up and business continuity. Customers do not appear to know exactly what they want, however DV comes up in many discussions around extending server virtualization to new environments and touches nearly all conversations around Windows 7. It is one of the fastest selling OS (in terms of number of licenses sold to date) and has many key functions which give IT visibility and control as well as a native type-2 hypervisor supporting non-compliant applications.

Report:

Profi le Description Requirements Mobile Worker Tendency to travel;

Sales, Field Engineers, Executives

Heavy usage on mobile devices; Requires anywhere access to e-mails, applications, security and support for diverse users as well as offl ine access

Offi ce Worker Human Resources; Finance; Operations, Administration

Rich Applications, possible requirement for desk shar-ing (shift workers) and movshar-ing end-user settshar-ings Task Worker Call Center Workers;

Offshore Agents; Banking and Retail Chain Clerks

Access to few applications, heavy lock-down, user administration / rights tightly controlled, access can be easily granted / revoked

External Contractor Project-based consul-tant, external training

Image and applications set remotely, can be turned on and off, tend to have expiration periods

Remote Worker /Home Worker

Offshore workers; work from home, etc.

Requires secure remote access to company network, could require temporary access to business apps.

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Enterprises tend to deploy DV technologies, such as VDI, in a very limited way. If they choose VDI deployments, they will tend to be trials, typically at a department level. Number of users can range from 10% minimum (in terms of total number of desktops) to a maximum range of 75 to 80% of the entire workforce. Customers that opt for such a wide-scale deployment is less common, but decision-makers tend to have other agenda items in mind. Th is includes, for example, sup-porting more remote workers, promoting new ways of working, ramping up on oﬀ shore activity. Th ere is also a willingness to take higher risks in case of failure. Severn Trent Water, a UK utility company, deployed DV with VDI to approximately 80% of its end-users from Computacenter. While the costs were higher, the company found additional savings in moving to a new, yet smaller, oﬃ ce location. Th e remaining 20% of employees were encouraged to work remotely which helped to encourage new working practices.

DV should not be seen as a solution in isolation. IT managers will continue to struggle in deliver-ing location and device independent services to the widest possible workforce at minimal cost, and DV only solves part of the problem. Th ere will be new demands set by a workforce that is more mobile and the consequence is the complete consumerization of IT with mobile devices. Service providers will need to look at uniﬁ ed communications, enterprise mobility and DV holistically as interdependent platforms and services that are vendor neutral. IT managers have lost the battle on controlling the number of smartphones in the workspace and now struggle to ﬁ nd a place for the iPhone, iPad and other devices. Some enterprises are also actually encouraging new BYO laptop policies bringing in more security, policy and control on the back-end.

#5 Opportunities with Green IT

In the current economic times, green IT has also been cited as one of the reasons to deploy virtual desktop services based on VDI. Some customers, particularly in the government sector look at VDI as a means of lowering emissions (each PC is thought to emit over 200 kg of Co2 per year) as well as reducing energy costs, which have increased by a factor of four over the past decade. Energy remains one of the most costly parts of an IT operation (outside of personnel). Other motivations have been to reduce on-site equipment and in improving equipment lifecycle spans. In the case of VDI, thin client devices last a lot longer than traditional desktops, which need to be refreshed every two years. In the analysis of customer triggers, green IT is no longer as prevalent in the discussion. While every company wants to promote corporate social responsibility (CSR), ‘cost savings’ is the primary driver in current times. Before the economic crisis, the CFO was the voice for cost savings while the CEO may have been the advocate for CSR. With cost-savings so prevalent, it is important service providers build this into the overall sales message. We have found some exceptions, such as pockets in the public sector that have deployed VDI as part of a broader strategy of becoming complaint with its Co2 emission targets. However this has been more the exception than the rule.

Recommended Actions

Recommended Vendor Actions

• Service providers should focus on the workloads that DV will support and map that to the correct environment, whether private, public or hybrid cloud. Other factors to consider will be security, regulation and compliance as it comes up constantly in cloud discussions. IT service providers looking at VDI, in particular, should consider carriers as potential channels to market for winning large national accounts and for penetrating SME accounts.

• Service providers should recognize that there is now a very ﬁ ne line between securing laptops, iPads with other devices (e.g., smartphones, point of sales solutions, etc.). Unfortunately, there are any number of devices accessing the corporate network that IT managers may not know about. As

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a result, security and device management is now something that needs to be treated very seriously and holistically. Th ere is a big role for service providers to play in this space.

• While there is no single vendor that can control all the pieces to DV, Citrix is clearly in the lead for VDI as it has been for server based computing (SBC) solutions in the past. However VMWare still has the hearts and minds of customers, especially in server virtualization. App-V appears to be a favorite for the virtualization of proﬁ les and user settings. Th ere is consolidation - Microsoft is also making a number of key acquisitions and will have a big inﬂ uence in shaping the market. Service providers should continue to watch these developments and continue with a vendor agnostic message.

• IT suppliers and carriers should also carefully watch the developments between Cisco, Citrix and EMC. Th is type of combination could be instrumental in opening up the VDI part of the market to the carrier community, especially for a multi-tenant VDI solution that can avoid asymmetric start up costs and deliver all of the back-end components (e.g., storage, servers and connectivity) against a per seat, OpEx-based pricing model. VDI is well suited for scale-based models where carriers have always excelled. More telecom carriers will likely move into this space, such as Orange Business Services, and see white label opportunities (e.g., Fujitsu) as well as new partnerships (e.g., Unisys and Colt) on the horizon.

• While many IT suppliers are deﬁ ning role-based services based on DV, there is much more work to be done on automation from the classic workspace to virtual environments. IT suppliers should develop better online catalogues as well as automated platforms which allow certiﬁ ed IT managers to add a user, specify a setting and push out an image. Providing a positive user experience will accelerate market adoption.

• Rather than building business cases on a one-off basis for a customer engagement, IT suppliers need to do a much better job at calculated cost-savings and other business benefi ts through auto-mated processes (e.g., being able to estimate IT costs based on reported estate accurately). Th ere should also be better ROI tools to provide automated responses and guidelines for customers and account teams. Th ere are also more ways to industrialize DV and tailor its capabilities to verticals, particularly fi nancial services, government and public sector accounts which are considered fi rst movers.

Recommended User Actions

• Enterprise customers must do an upfront evaluation to determine the potential beneﬁ ts and impacts of desktop virtualization. Th ere are no like for like replacements for traditional environ-ments or identical deployment scenarios. Th ere is also no single vendor than can oﬀ er all possible solutions with DV and many of the leading technologies may be overkill depending on the issue that needs to be solved.

• Customers that opt for VDI should consider that many legacy applications are not supported in this environment as well as any collaborative applications that require HD or multimedia as well as video conferencing. Most suppliers do oﬀ er standard applications remediation as part of their VDI oﬀ erings.

• Enterprise customers considering DaaS should be aware that the service has some limitations. Most suppliers require ﬁ xed contacts, typically 36 months and set prices per user. Customers have to plan for capacity and pay a premium if it goes unused.

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