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'Year of the Virtual Desktop' a Flop So Far

By Kevin Fogarty, CIO
July 29, 2010 12:01 PM ET

CIO - More than halfway through what vendors and many analysts predicted would be the year virtual desktops would replace enormous numbers of the physical kind, sales of desktop virtualization products are growing at a rate "that looks about the same as in 2009," according to Ian Song, analyst for International Data Corp.

Bare-metal desktop hypervisors: A primer

IDC's July report on the PC market showed sales increased 22.4 percent globally for the first six months of 2010 compared to 2009, driven by enterprise needs to upgrade aging PCs ignored during the 2007/2008 recession and greater penetration of PCs internationally.

IDC won't report on virtualization sales until mid-August. When it does, there won't be anything indicating shocking growth in virtual desktop infrastructures, Song says.

"VDI remains a tactical decision," Song says. "Purchasing decisions are largely made by IT professionals looking for a solution to a particular problem. Strategic decisions that might lead to VDI being adopted more widely won't happen until there long-term results showing a solid return for companies that aren't early adopters."

That's not the way it was supposed to work.

Virtual Desktops and Aging PCs

During 2010 sales of corporate desktops was supposed to surge -- driven by improvements in the economy, the need to refresh aging PCs and upgrade to Windows 7. The complexity of that dual upgrade would be enough, vendors and analysts predicted, to justify migrations to a virtual desktop infrastructure, not just a new physical one.

[Another factor slowing desktop virtualization adoption: Vendors have confused enterprise IT groups with many flavors of products. See CIO.com's Desktop Virtualization: Comparing Options Frustrates IT. ]

A survey of more than 800 businesses conducted in December 2009 and January 2010 by longtime Forrester analyst and now independent consultant Merv Adrian showed 31 percent of companies planned to implement VDI in 2010, compared to 13 percent the year before. A report relased by Gartner in March of 2009 predicted that licenses for hosted virtual desktops -- VDI hosted by an outsourcer or cloud-based service provider -- would grow from 500,000 in 2009 to 49 million in 2013.

"There's no hotter market in high tech this year than Virtual Desktop Infrastructure," read an April, 2010 entry in Adrian's blog.

The hoped-for VDI takeoff didn't happen, according to Brian Madden, analyst and principal editor at desktop virtualization discussion site BrianMadden.com. End-user companies are still experimenting with VDI and are expanding it where it's really needed; VDI products don't perform well enough and aren't feature-rich enough to make migration "a no-brainer," Madden writes.

In a frustrating twist for vendors, the evidence of desktop virtualization's growth may not appear until long it has become common, Adrian says.

"VDI is one of those phenomena like the 'year of the LAN' that we waited for but that came and went without [analysts and journalists] ever identifying the tipping point," Adrian says. "With VDI the sale-able merchandise associated with it is not easily separable from products used for other things. It comes into companies as part of a larger software suite, or with site licenses, and there may be no one tracking after the contract is signed how many seats are actually in use. We may only be able to identify the tipping point retroactively."

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