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The Year of the Virtual Desktop Fails to Materialize -- Again

By Kevin Fograrty, CIO
October 07, 2011 11:49 AM ET

CIO - In mid-2010, as the number of Windows 7 betas spread and the clock ticked down to October, when the long-awaited replacement for XP would officially ship, computer vendors and analysts painted expected that a major new operating system would revive spending on x86-based PCs and servers, which had taken a hit since the recession began in 2008.

Among the most-anticipated effects was that companies eager to move to Windows 7 but loath to spend money to replace all the PCs required to run it, would instead invest heavily in virtual desktops. The potential savings in hardware combined with the reduction in maintenance and security costs often associated with virtual desktops were anticipated to make 2011 the Year of the Virtual Desktop, even if 2010 was supposed to be that year.

ANALYSIS: Desktop virtualization users say the technology brings challenges

But it didn't happen. Yet again.

No Sea Change

More virtual desktop technology is being used in big companies, but there has been no wholesale change in how companies think about virtualization on the client side, according to Sean Hackett, Research Director at The 451 Group.

"A lot of the industry has been waiting with bated breath to see virtual desktops really show they're catching on, but I don't see anything in our surveys, in our interviews with CIOs, or in our research pointing to any broad adoption of virtual desktops in the near future," Hackett says. "Right now we just don't see the drivers pushing CIOs toward virtual desktops. Mostly they're still working out their server virtualization infrastructures."

A 2010 survey on IT spending, for example, estimated that in 2009 only 40 percent of companies in the U.S. had virtualized any of their desktop hardware--including dumb-terminal apps in call centers, banks and other traditional locations.

By 2011 85 percent of companies would have virtualized some of their PCs, a Goldman Sachs report predicted, though barriers still included the cost of both the VDI (virtual desktop infrastructure) systems and storage to support them and more pressing budget priorities.

There has been growth in the use of various desktop virtualization technologies--which range from VDI to streaming applications and remote access from mobile devices--but not nearly enough to say it represents a fundamental shift in the market, according to Ian Song, research analyst at IDC.

"The technology is getting a lot more mature and the performance has improved a lot, especially Citrix's and VMware's, with its shift to the PC-over-IP protocol," Song says. "The product offerings are still pretty scattered, so there's no standard way to go about building a virtual desktop infrastructure. And the major vendors are still a year or two from introducing really well unified management systems that can handle desktops, mobile, cloud and virtual servers."

An IDC marketshare report Song co-wrote predicts more growth in both the use of virtual desktops and management apps from VMware, Microsoft, Citrix, and from less well-known players including Desktone, Kaviza, MokaFive and Quest Software.

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