The business rationale for cloud workspaces

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The business rationale for cloud

workspaces

Simon Bramfitt

November 18, 2014

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Executive summary

Desktop virtualization technologies offer enterprise IT a new opportunity to deliver lower-cost, yet more responsive, end-user computing services across a larger range of endpoints, but many of the technologies behind desktop virtualization require significant capital outlay and are architecturally complex, difficult to implement, and subject to rapid change, making them a high-risk investment.

Desktop-as-a-Service (DaaS) offers a significant opportunity to realize the benefits of desktop

virtualization through cloud-hosted desktops consumed as a service, without the high upfront capital cost, and at a considerably lower risk, by leveraging a service provider’s domain expertise in creating and

managing a high-performance virtual desktop infrastructure.

This report, which gives enterprise IT organizations a hands-on assessment of leading Desktop-as-a-Service platforms, is based on interviews with platform vendors and service providers and extensive dialogues with enterprise customers conducted from June to October 2014. The analyst gathered additional information during interviews and survey responses from a curated group of approximately 200 end-user computing decision-makers conducted annually from Q4 2010 onwards.

Key takeaways:

• Desktop virtualization technology, primarily in the form of VDI, provides significant operational

benefits, but is highly complex and disruptive and requires major capital investment.

• DaaS provides all the benefits of desktop virtualization while transferring the capital investment

and technical difficulty to third-party service providers, who have the domain expertise to mitigate much of the risk.

• DaaS offers significant benefits over VDI when demand for desktop services fluctuates for reasons

such as a seasonal workforce.

• A DaaS hosting provider’s ability to support workloads effectively, minimizing latency issues, will

significantly influence all subsequent decisions.

• Cloud desktop services can be as little as a desktop platform-as-a-service or can deliver

comprehensive desktop outsourcing services.

• Although cloud desktops are priced similarly, careful platform selection and contract management

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Virtual desktop delivery models

Enterprises frequently leverage a combination of virtual desktop solutions to address their business requirements. The highest-level desktop virtualization solutions fall into one of four categories:

Client-hosted virtual desktops. These architectures run locally on a user’s desktop PC, either using a bare metal (Type I) hypervisor, hosted (Type II) hypervisor, or less commonly, a virtual container technology. Server-hosted virtual desktops. Generally referred to as VDI, these host multiple instances of desktop operating systems on a data center’s virtual infrastructure and use a remote display protocol to deliver desktop-display updates to and from a remote endpoint. Market-leading examples of VDI solutions include Citrix XenDesktop, VMware Horizon, and nComputing vSpace.

Hosted shared desktops. Also referred to as session-hosted desktops or presentation virtualization, this is the most mature form of desktop virtualization, predating VDI’s introduction by more than a decade. This approach takes advantage of the Microsoft Windows Remote Desktop Session Host (RDSH) role in Windows Server 2008 R2 and 2012 to provide a user with a personalized virtual-desktop instance running on a shared Windows Server operating system. While it is not dependent upon any data-center virtual infrastructure, for operational reasons, many hosted shared-desktop implementations are implemented on a virtual infrastructure. The market leading hosted shared-desktop platform is Citrix XenApp, with competing solutions from VMware, Dell, Microsoft, and others.

Desktop-as-a-Service (DaaS). DaaS is a cloud-hosted VDI service delivered on demand through a pay-per-use model. Specific DaaS implementations vary greatly in implementation and technology and can encompass additional services including shared cloud storage, on-demand application provisioning, and workflow automation. Initially, DaaS referred only to cloud-hosted implementations of VDI-style virtual-desktop systems, but the term broadened to include hosted shared-desktop implementations as a somewhat equivalent, but substantially cheaper means of delivering a cloud-hosted desktop experience. The DaaS market is significantly more fragmented than the enterprise VDI and presentation virtualization markets, with many thousands of service providers operating regional, national, and global services, as well as specialist niche service providers focusing on technology verticals such as financial services, healthcare, and engineering. All the market-leading VDI vendors have a presence in the DaaS market, established either by extending their existing VDI platforms, or by acquiring DaaS startups. New entrants such as dinCloud, Independence IT, and Virtual Bridges have all brought DaaS platforms to market, while established cloud platform providers such as Amazon are also looking to establish a foothold.

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Factors driving adoption of desktop

virtualization technologies

Numerous business and technology drivers can influence desktop virtualization adoption:

Financial benefits. In common with many other cloud services, DaaS exchanges periodic capital-equipment investment for frequent regular operating expenses, while simplifying chargeback of services to individual business units. In environments with significant variation in demand for desktop services either through growth or seasonal fluctuations, DaaS eliminates the need for additional capacity ahead of demand.

BYOD programs. Programs supporting and/or encouraging employees looking to use their own computers for work have proven to be exceedingly popular with employees and employers alike. Organizations that have implemented BYOB programs have reported significant improvements in

employee productivity and morale, and surveys have reported that millennials expect they will be allowed to use their own electronic devices at work. However adopting BYOD is not without challenges, especially when ensuring availability of enterprise applications. Organizations are looking to VDI and DaaS as means for delivering a fully managed desktop environment to an otherwise unmanaged device.

Data security. Even with an increased focus on cloud-data security issues following several high-profile security breaches, VDI and DaaS offer significant advantages over distributed desktops. With adequate security controls in place, the risk of data loss from cloud storage, and by extension cloud desktops, is significantly lower than the ever-present risk of a stolen laptop. DaaS has also been used successfully to provide employees working in high-security environments with access to an unsecured desktop for personal use, isolated from (but accessible from) within a session running on a secure workplace. Business agility. In conjunction with other cloud services is an opportunity to take advantage of rich APIs that provide automated service provisioning as part of core business processes such as new employee account setup. DaaS brings many opportunities for improving business agility where older desktop management services have as yet failed to offer meaningful opportunities for change.

Desktop management. Virtual desktops are based on shared virtual-disk images that enable patches and updates to be employed to a single base image and propagated across any number of virtual desktops in minutes. In contrast to conventional distributed desktop environments that can take several days to deliver an update, assuming the endpoint is accessible, DaaS and VDI can significantly reduce desktop

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image-management overhead and dramatically increase the supportable frequency of updates. Advanced DaaS platforms incorporate application-management services to further simplify and accelerate

application-update activities, enabling rapid roll forward and roll back of changes without requiring a desktop reboot.

Disaster recovery (DR) and business continuity (BC). DaaS has significant advantages in DR and BC planning and implementation. Not only are DaaS services significantly less expensive than similar plans based on allocation of physical equipment, but with careful planning, standing up thousands of desktops in very short order is possible – far faster than would be possible with physical PCs. DaaS also makes DR plan-testing easier and more realistic than would be feasible with physical PCs.

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Speed bumps on the road to DaaS adoption

Entelechy Associates 2014 DaaS adoption survey of 200 end-user computing decision-makers indicates that 3.5 percent of organizations surveyed had implemented DaaS in some capacity, with 13.5 percent considering future implementation.

Growth of interest in DaaS

Source:Entelechy Associates, Gigaom Research

Early adopters of DaaS were almost exclusively large enterprises looking to DaaS as a niche solution to overcome technical or operational challenges that were either difficult or expensive to address within the confines of their existing end-user computing environments.

The challenges that early DaaS adopters cited included:

• Difficulties delivering managed-IT services at remote locations

• The need to improve data security and maintain regulatory compliance • Response to rapid change in employee numbers

• Growing emphasis on the need for desktop DR and BC services

0! 1! 2! 3! 4! 5! 6! 7! 8! 9!

Already Implemented!

Planning to implement within 12 months!

Planning to implement in 12 months or more!

Percentage!

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DaaS has also found favor among organizations looking to take advantage of the superior desktop management capabilities offered by VDI, but who find themselves stymied by its cost and complexity.

Interest in DaaS by market sector

Source:Entelechy Associates, Gigaom Research

As DaaS technology matures and more service providers look to DaaS to create new business

opportunities from existing infrastructure investments, marketing cloud desktop services to smaller businesses has increased. Data from Entelechy Associates shows that while there was significant growth across customers of all sizes since 2010, interest in DaaS from smaller business customers doubled from Q4 2013 to Q4 2014. That is now the largest segment of the market.

A recent study by Citrix Systems1_{confirmed the level of interest expressed by smaller businesses. Of the}

700 service providers who responded to the Citrix survey, 70 percent cited their average customers had fewer than 100 employees and 40 percent serve businesses with fewer than 50 employees.

1_{Desktops-as-a-Service Global Market Trends: The Service Provider Perspective}

0%! 10%! 20%! 30%! 40%! 50%! 60%! 70%! 80%! 2010! 2011! 2012! 2013! 2014!

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Factors driving DaaS adoption

Survey respondents and those interviewed for this report cite financial benefits as the primary

justification for considering DaaS. This is most frequently in the form of capital-cost avoidance either by selecting DaaS as an alternative to a self-hosted VDI implementation or as an alternative to performing a desktop hardware refresh, often in conjunction with Windows XP end-of-life migration planning.

The promise of capital expenditure savings led DaaS adoption interest as the technology was first brought to market in 2009/2010, and again in 2013/2014 as organizations faced the combined CapEx and OpEx burden of addressing the end-of-life of Windows XP.

Top 5 Factors influencing DaaS adoption

“When presented with the cost and complexity of migrating 120 PC to Windows 7 the move to DaaS was the lowest-cost, least-disruptive way forwards.”

“We can’t justify the cost of having onsite IT support at all our locations. DaaS gave us the opportunity to modernize our desktops and get better, more responsive remote support without increasing our current IT budget.”

0 2 4 6 8 10 12 2010 2011 2012 2013 2014 IN T E R E ST

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Mobile adoption also figured prominently in DaaS adoption as tablet-device use in the enterprise increased and with it an expectation of the need to provide desktop services to this new class of devices. Over time, however, as mobile device adoption increased, the importance of delivering desktops to tablets was supplanted by an application-centric perspective, as the limitations of the tablet form-factor became better understood. Interest in the use of DaaS to provide BC and DR services has shown steady growth as awareness of the role that cloud desktop services can play in supporting rapid changes in demand for work-from-home services has grown.

“Our initial DaaS experience grew from an interest in using BYOD to control costs in supporting a large seasonal workforce, exchanging rental PCs for DaaS accessed from employee owned PCs. This early experience with DaaS has led us to consider it for other more strategic purposes including providing flexible support for work-from-home by full-time employees and for providing BC services during times of natural disasters and severe weather where employees may not be able to get into work.”

Interest in DaaS has also seen an increase as part of an overall shift towards cloud-services awareness. While not yet a major factor, an increasing number of IT leaders are considering the possible benefits of cloud desktops as the preferred platform for running cloud-hosted applications. The rapid growth of interest in BYOD programs that blossomed in 2012 has led an increasing number of IT organizations looking to DaaS as a means of delivering a managed computing environment to employee-owned PCs. Here, however, DaaS is competing with increasingly mature VDI and layered desktop image-management solutions.

Interest in DaaS as a vehicle for increased business agility has grown steadily since 2010 and is now matching interest in the use of DaaS to support a mobile workforce. The most prominent area of interest is in accommodating rapid changes in employee numbers due to seasonal variations in demand or from mergers and acquisitions. However increasing numbers of organizations expressed interest in DaaS as a means of increasing operational efficiency in employee on-boarding and beyond.

While a growing number of organizations are looking to incorporate DaaS within their end-user

computing strategies, many have faced implementation challenges, with more than one-third of survey respondents reporting project cancelations or delays. While several reported evaluating and rejecting specific DaaS offerings due to poor session performance, poor user experience, or inadequate support for peripheral devices, none cancelled projects as a result of technical challenges. Instead, survey

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high operating costs resulting from the need to assign greater-than-expected session resources (in the form of additional vCPUs and memory) affected almost one-third of projects, with failure to realize expected administrative benefits, primarily in application and operating system management, impacting more than 80 percent of problems.

“Our initial expectations for DaaS was that it would not only allow us to implement VDI without having to consider the data-center costs, but that we would also be able to reduce the amount of time spent managing the desktop operating system. Finding a partner able to provide the DaaS platform was not difficult, but we were unable to rid ourselves of the responsibility for managing the OS.”

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Choosing a DaaS platform

The DaaS ecosystem is far richer and more diverse than VDI, for which a limited number of platform vendors offer broadly similar products. Not only are there significantly more DaaS-platform vendors than VDI developers, but the products themselves differ greatly in functionality and approach – ranging from simple desktop provision platforms, through hybrid-cloud solutions to comprehensive virtual-workspace systems incorporating application management services, integrated cloud storage, and rich management APIs.

DaaS platforms also see greater cross-pollination of technologies than a comparable VDI solution might. Amazon for example has licensed the Teradici PCoIP remote-display protocol also found in VMware Horizon for its Amazon WorkSpaces DaaS platform. Similarly, dinCloud chose Dell vWorkspace as the underlying technology for its first-generation DaaS platform dinHVD, and Independence IT used Microsoft Windows Server Remote Desktop Session Host to provide the core services behind its Cloud Workspace Suite.

Accepting that DaaS is VDI in a cloud, many of the technical considerations used in VDI platform selection apply equally to DaaS. For example, remote-display protocol selection in a VDI environment may be a critical consideration where video streaming, flash animation, or 3-D graphics play a major role in end-user activity. Similarly if videoconferencing or document scanning are essential activities, then support for local USB-device-redirection features will strongly influence product selection. However, in other areas, what might be considered a major factor in VDI platform selection may have little or no importance when considered from the perspective of DaaS platform selection. A DaaS-platform end-user is unlikely to give much consideration to a DaaS platform’s underlying hypervisor or storage technology, provided that it delivers adequate performance and the price is right. Even so, a service provider may consider both hypervisor and storage technologies as major factors in the decision to adopt one DaaS platform over another.

What then are the key considerations for DaaS platform selection?

Hosted shared desktops or server-hosted virtual desktops. The single most significant decision in DaaS platform selection is the availability of hosted shared desktops and/or dedicated server-hosted virtual desktop instances. Hosted shared desktops as implemented by Microsoft in Windows Server Remote Desktop Session Host services or Citrix XenApp, allow users to access a dedicated section on a shared Windows Server operating system instance remotely. It is a mature and widely used technology

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with few shortcomings. Early-session virtualization implementations suffered occasional application compatibility issues, usually where the application expected to have sole use of the operating system, but over time, the number of these applications has dramatically decreased, today restricting the problem, for the most part, to legacy applications.

The primary remaining limitation of session virtualization is being restricted to the underlying shared platform, with many (potentially hundreds) users – all competing for resources on the same server. When this may be a problem, the pragmatic solution is dedicating an entire virtual server to a single user. As a general rule, session virtualization accommodates the majority of user needs while providing a low-cost solution instead of dedicating a virtual server to a single user. However in some cases a dedicated server instance is called for and the availability of choice of solution from a single DaaS platform is a major consideration.

To overcome Microsoft-imposed licensing constraints, most DaaS providers have implement dedicated-instances Windows Server rather than a Windows 7 or 8.1, using Windows Server 2008 R2 for Windows 7 style user experience and Windows Server 2012 for customers looking for desktops with a Windows 8 feel. Some DaaS providers offer desktop operating systems, but that can entail considerable additional cost to a service provider and may include significant minimum-order quantities in addition to a higher unit cost. However, recent changes to Microsoft’s desktop-operating-system licensing terms and conditions may make the use of desktop operating systems in DaaS environments more attractive.

Desktop and application management. DaaS platform-management capabilities range from basic services capable of managing the virtual infrastructure and provisioning desktops from a template, through to advanced features capable of managing virtual machine templates, applications, application licenses, and print services, as well as providing cloud storage, file sync and share services, etc.

Application programming interface (API). In common with all cloud services, great benefits derive from the availability of an API to enable automation of management activities. For limited DaaS

deployments, API availability is not critical, but to take fullest advantage of cloud desktop services, a rich and accessible API will offer major operational benefits.

Hypervisor. Hypervisor platform selection may significantly influence service-provider costs, but

should not unduly influence customer choice. Circumstances may arise in which the customer has specific requirements that can only be met on a given hypervisor platform such as GPU virtualization support. Consideration to hypervisor platform may also be important when a customer is looking at DaaS as a BC

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or DR service for an in-house VDI implementation, where the advantages of maintaining common desktop images across both VDI and DaaS platform may be a primary consideration.

Storage. Virtual-desktop storage requirements can be demanding and may require advanced storage-acceleration technology so that they can deliver acceptable performance, but DaaS clients should not be concerned about underlying storage technology beyond achieving assurances that the storage technology does not introduce a performance bottleneck that may limit the service provider’s ability to scale. Service providers looking to implement DaaS must ensure that the platform does not lock the provider into a high-cost storage infrastructure.

Remote display protocol. Remote display protocols selection should be governed by its ability to meet the performance, security, peripheral, and graphics-rendering requirements.

• Required bandwidth

• Network congestion and latency handling • Protocol encryption support

• Image compression characteristics

• Video streaming, flash animations, 2D or 3D graphics, server-side/client-side image rendering • Audio support; one-way playback only or two-way sound to support voice communications with a

device such as a USB headset

• USB support. Beyond generic USB device redirection, close attention to USB support

requirements is necessary as functionality can vary greatly between implementations. Key

considerations include: USB device filtering, bi-directional audio for dictation and VoIP, webcams for video conferencing use, support for advanced USB devices including biometric devices,

TWAIN scanners, and encrypted storage devices, and explicit support for USB 3 devices

• Multi-display support and support for tablet-screen rotation

• Client availability, including support for mobile operating systems, Chrome OS, and HTML 5

clients

• Support for thin/zero client devices. Clients wishing to take advantage of any prior investment in

thin-client devices or are looking to deploy new thin clients as DaaS endpoints must confirm supportability. While thin-client devices are generally available for all remote display protocols,

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differences in connection-broker implementation between a DaaS platform and an equivalent VDI solution may limit available choices

Graphics rendering. Virtual desktop graphics rendering can be performed via software or through leveraging special-purpose graphics processing units (GPU) and can be performed either on the server or through redirection on the client device. Graphics acceleration choices are highly proprietary and closely associated with both remote display protocol and hypervisor platform. Few DaaS providers at present offer hardware-based graphics acceleration, but with the increasing availability of GPU virtualization technologies such Nvidia GRID the number of service providers offering GPU accelerated DaaS will inevitably increase. In environments where vGPU is not currently warranted, cloud desktops can deliver acceptable graphics performance provided they are assigned multiple vCPUs. Even so, with marked variation of vCPU performance across providers, the best approach remains “try before you buy.” Hardware-based graphics acceleration is essential for delivering cutting-edge graphics processing capabilities for 2D imaging and 3D graphics processing used for industry-standard content-creation applications such as Autodesk M&E products, Adobe Creative Cloud, New, Renderman, and V-Ray. At present, few DaaS providers offer hardware-based graphics acceleration, limiting customer choices to niche service providers. Virtual-desktop-graphics rendering can be performed via software or through leveraging special-purpose GPU and can be performed either on the server or through redirection on the client device. Graphics-acceleration choices are highly proprietary and closely tied to both remote display protocol and hypervisor platform choice. With the increasing availability of GPU virtualization

technologies, the number of service providers offering GPU-accelerated DaaS will inevitably increase. Even in environments where vGPU is not currently available, cloud desktops can deliver acceptable graphics performance provided they are assigned multiple vCPUs. However with marked variation of vCPU performance across providers, the best approach remains “try before you buy.”

Printing support. Printing in VDI environments can be challenging because of printer-driver

management and support for local printing on non-Windows clients. A thriving ecosystem of third-party printer-driver and print-output management vendors has developed to plug the gaps. DaaS platforms differ greatly in the degree of sophistication of printer output management solutions they offer – from none to licensing third-party printer management suites and incorporating them within the core DaaS platform. Careful review of the diversity of output management needs, client device-types used, and current printer-management abilities may significantly influence DaaS platform choice.

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Key takeaways

In common with other cloud services, DaaS is diverse in its services and implementation, but subject to rapid change. Following are some key observations and recommendations:

• The use of desktop-virtualization technology, primarily in the form of VDI, provides enterprise IT

organizations with significant operational benefits. The time and effort can contribute significantly to end-user productivity.

o Desktop-virtualization technology is highly complex, highly disruptive, requires major capital investment, and is still evolving rapidly.

o It represents a significant implementation risk for most customers.

• DaaS provides all the benefits of desktop virtualization, but transitions most of the capital

investment and technical difficulty to third-party service providers, who have the domain

expertise to mitigate much of the risk and a business model designed to maximize the investment in skills and technology needed to create the greatest opportunity for success.

• DaaS also offers significant benefits over VDI when demand fluctuates for desktop services:

seasonal workforce, DR and BC environments, or during mergers and acquisitions.

• Except in very limited circumstances, cloud desktops do not exist in isolation. The applications

they host comprise conventional client/server applications and web applications and are increasingly tied to other cloud services.

o A DaaS-hosting provider must have data-center facilities close enough to all end-users to reduce the impact of network latency on user experience and should give consideration to the effect that network latency can have on client/server application performance.

o In many cases, avoiding poor application performance means co-locating both the DaaS infrastructure and the client/server application services.

o A hosting provider’s ability to support other workloads effectively will significantly influence all subsequent decisions.

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• Current-generation DaaS platforms differ greatly in scope and capability, offering everything from

a bare-bones virtual desktop to comprehensive platforms incorporating application-management features and rich APIs that enable advanced workflow automation. Similarly, DaaS providers differ greatly in the level of support and value-added services they provide. Cloud desktop services range from a desktop platform-as-a-service offering to delivering comprehensive desktop

outsourcing services.

• DaaS pricing does not fully reflect the variations in functionality offered by competing platforms.

While the fixed cost of Microsoft Windows licensing tends to act as a brake, just as with all other cloud services, DaaS pricing is subject to frequent (downward) change.

o At present, pricing is largely driven by assigned server resources (i.e., session memory allocation and vCPU count) rather than by platform features or the level of availability promised through an SLA. In short, while many cloud desktops are priced at about the same point, not all cloud desktops are created equal.

o Careful platform selection can deliver significant benefits beyond core desktop hosting services for little or no additional cost, and careful contract management can ensure that opportunities for savings increase over time.

• Approach DaaS platforms that do not offer anything but the most basic management services with

caution. While basic DaaS platforms may be sufficient for the very smallest implementations, most customers require desktop management services in addition to the basic desktop platform service.

o Attempts to integrate conventional distributed desktop management tools into a DaaS environment is possible, but this approach fails to take advantage of the inherent benefits of the platform and ignores any opportunities for operational savings.

o A customer can integrate desktop and application management services specifically designed for VDI and DaaS environments, but integrating third-party components into a DaaS platform will inevitably add cost and complexity.

o Except when a customer is looking to DaaS as an extension of an existing VDI

environment and requires the same management tooling on both platforms, management-tool integration is better performed by the service provider or DaaS platform developer.

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About Simon Bramfitt

Simon Bramfitt is an analyst with the Gigaom Research analyst network, where he covers the end-user computing landscape. Simon has thirty years’ experience in the computer industry, in technical, senior management, and industry analyst positions across North America, Europe, and The Middle East. He has held key technical roles in three startups and has also served as a member of the advisory board of several others. In 2010, Simon founded Entelechy Associates, an independent technology analysis consultancy that provides strategic guidance and technology analysis services for enterprise IT organizations and investment fund managers, and go-to market planning assistance for end user computing technology vendors.

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The business rationale for cloud workspaces