Where’s the Value in Desktop Virtualisation?

Well, the answer isn’t as grim it might first seem. In fact, if handled right, these types of technologies will deliver software type margins and present the means to create true value-add relationships between channel and customer. But before we look at the money, market and margin opportunities, let’s look briefly at how we got in this situation and where the market is moving first.

Of the ten technology trends forecast by Gartner (NYSE:IT) to most impact 2011, virtualisation is a key driver or enabler behind many; for example cloud computing, client computing, green IT, reshaping the datacentre and virtualisation for availability. Gartner’s prediction that 15 percent of the global business desktop market will be hosted by virtual desktops by 2014 is just the tip of the iceberg – desktop virtualisation is fast becoming the final inch of the cloud.

Sharing resources

In a commercial world where competition and winning takes precedence, it is interesting that a technology which is essentially about sharing takes centre stage. Last year, the impact of local and global recession definitely accelerated the importance and acceptance of sharing and shared resources. The fact that much of the historic technology complexity and cost of deployment barriers associated with virtualisation began to fall away also played an important role in its adoption. Regardless of the drivers, virtualisation has established itself as a pivotal technology investment and deployment strategy across business of all size and dimension.

Innovation that helps leverage and accelerate the business and economic advantages of globalisation; that weaves together disparate and remote workforces into singular, powerful and more productive entities; and that protects the security of information will continue to find markets and success. This is why adoption of emerging technologies such as cloud computing, client computing, virtualised availability will continue to be key trends.

However, while these macro developments take shape, let’s not overlook the small business environment. As with all recessions, my money is on the small business people to help us climb out of the recession. Technology solutions that help the small business perform better, faster and more efficiently are going to be of key importance – and opportunity.
 
I believe the technologies that will help drive globalisation and the infrastructures of large enterprise, government institutions and education establishments will be the same as those that will help drive small business success – the only difference being size and scale. I believe that virtualisation will be a critical technology across this ecosystem.

Margins

At first look, such a trend would not seem to fair well for the channel. Offering products and services that basically deliver vastly more compute and computing power from less seems counter-intuitive from a business and profitability perspective. However, a key learning for the channel is the significant growth and margin opportunity that virtualisation, particularly desktop virtualisation, creates. I am committed to creating a quality margin business for the channel. It is no longer true that desktop virtualisation delivers below PC-type margins.
 
What we’re finding is that desktop virtualisation offers abundant cross and upselling opportunities, delivers similar margins as software and presents the chance to create true value-add relationships between channel and customer. When customers adopt and deploy desktop virtualisation, the opportunity to cross and upsell value added technologies such as storage, network access, security and services is significant.

Savings

The savings realised by virtualised desktops, such as 70 percent lower cost of acquisition and 75 percent reduced ongoing maintenance costs, can be reallocated to solution-based and vertically tailored products and services that create deep systemic relationship between customer and channel. In short, while desktop virtualisation is transforming the economics of PCs and breaking down the legacy domains of old stalwarts such as Dell and HP, it is creating entirely new business and economic opportunities to the advantage of the customer and channel.
 
In terms of market opportunity, expect to see the trend of education, government and large enterprise adoption continue to grow. I also expect mid and small business to be profitable growth markets; which is why we are currently rolling out a vertical market solution strategy with out-of-the-box solutions based virtual access devices and virtualisation software together with fully integrated and pre-configured software, hardware, peripherals and OS environment so that all a business needs to do is literally take it out of the box and go. For the channel, what’s important is the desktop virtualisation delivers the all-important Three Ms – Money, Market and Margin.   And it can.

So while recent economic growth figures underline that UK business needs to continue to seek ‘more value for less’, virtualisation, because it is the very essence of ‘do more with less’ will continue to be a key technology trend.