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Why MSPs and SMBs see potential in hosted virtual desktops

MSPs look to grow business around hosted virtual desktops but face challenges in delivering their offerings. Find out if the technology suits your clients.

Managed services providers rank hosted virtual desktops, or desktop as a service, as their top planned virtualization offering -- beating out network, storage, datacenter, application and server virtualization -- according to a 2014 report by market research company Techaisle.

Hosted virtual desktops and desktop as a service (DaaS) also outpaced virtual desktop infrastructure (VDI) in the survey. VDI involves hosting a desktop operating system as a virtual machine on a centralized server at the customer's location. DaaS, in contrast, moves the server side of VDI to a cloud service provider.

Forty-five percent of managed service providers (MSPs) are currently offering DaaS to small and medium-sized businesses (SMBs) and another 27% are planning to offer it this year, according to Techaisle's survey of 684 channel partners, which included 147 MSPs. Half of the respondent MSPs said they are expecting an increase in their desktop virtualization revenue in 2015.

TechTarget's North American IT Priorities survey found more modest results, with almost 11% of respondents saying they are planning to adopt DaaS in 2015.

There is growing demand within the small and mid-market segments for desktop virtualization, which offers flexibility and scalability among several other benefits, said Anurag Agrawal, an analyst at Techaisle, a global SMB research organization. "[SMBs] want to be able to reduce operating costs, enable mobility, utilize the current infrastructure, have much more robust backup and disaster recovery systems, and secure data in their infrastructure," he explained.

About one-quarter of the respondents cited better, more efficient management options available in hosted environments, coupled with concerns over current staff skill levels, as a primary reason for electing to use a hosted solution, said Agrawal.

"If reduced complexity and ease of implementation is added to management and internal skills, the proportion of firms looking to hosting as a means of smoothing the path to client virtualization increases to 35%," he said.

Access to better security or other features is the primary driver for 18% of those using or considering hosted VDI/DaaS, while 19% consider hosted the "best option" or cite other reasons for going with an off-premise solution, according to Agrawal.

The results are not surprising, given that SMBs have already witnessed the benefits of server virtualization, and DaaS is the next logical step for partners to focus on to help meet their customers' needs, Agrawal said.

"SMB customers' key issues are support for mobility solutions [and] improving productivity … so when looking at how quickly mobility and cloud are being adopted within small and mid-markets, it is not surprising to see this type of virtualization is … on the radar of SMBs as well as the channel partners," Agrawal said.

Yet, at the same time, it has not been easy for MSPs to deliver DaaS, Agrawal noted, since it is a hosted offering and many service providers do not have their own data centers. As a result, they need to either invest in a data center offering or use one from companies like Amazon or Microsoft, he said.

Many of the smaller MSPs, Agrawal said, "do not have those capabilities and that's the reason why you'll see IBM is actively trying to go after [them], saying, 'Hey, you've got the customer [and] we have the platform. Come and host your solution on our platform and we will help you build up your MSP business.'"

Maturing technology

Accelera Solutions, which has offered hosted virtual desktops for about five years, is utilizing both Microsoft Azure and Amazon Web Services (AWS) in lieu of having its own data center, said Joe Brown, president and chief operating officer at the Fairfax, Va.-based IT service provider. While last year Accelera saw interest from some companies trying to understand DaaS, "this quarter we've seen probably eight to 10 opportunities of fairly substantial size, which we think is a fairly good indicator of what this year will offer,'' he said.

Brown attributes the growing interest, in part, to the fact that the technology has matured and large providers like AWS are starting to invest in this service.

[SMBs] want to be able to reduce operating costs, enable mobility, utilize the current infrastructure, have much more robust [BDR] systems, and secure data in their infrastructure.
Anurag Agrawalanalyst, Techaisle

Training staff on DaaS has not been an issue for the company, he said, since Accelera has been offering virtualization for 13 years. The greater challenge was the company's decision to create a DaaS offering and the resulting transition from consulting partner to service provider.

"Quite frankly, it's a different type of support,'' Brown said, since, as consultants, the company's subject matter experts would work with customers on how to build and configure a technology, which the customer would then support internally. "When we became service providers, we [took on] the whole lifecycle -- build it, change management, support it -- and we had to learn to be service providers to customers in terms of supporting and doing revisions," Brown said.

The biggest lesson learned is figuring out how to optimize the VDI platform to give the customer the best experience and price, Brown said. He said it's also key to make sure that staff learn to use some of the newer technologies like virtual storage area networks (VSANs) and software-defined networking (SDN) to minimize costs.

Unlike Accelera, Network Medics has its own data center and finds the main challenge of hosted virtual desktops to be user experience, said Kevin Calgren, a partner at the Minneapolis-based company. Some of its clients are trying to use computer-aided design (CAD) or Photoshop, which he said is fine if they can handle a delay.

"For anything creative, I don't feel [DaaS is] there yet," Calgren said.

Network Medics has an onboarding process with new clients and Calgren said it's critical to learn about their workflows and ask a lot of questions, like why they're interested in virtual desktops and what their recovery time objective (RTO) is.

"Some companies' RTO is one minute, some is a day, depending on the industry," Calgren noted.

He also said Network Medics has a "try before you buy" model when it comes to companies that are considering migrating to a new platform. The company offered this approach with Windows 8.

VDI is ideal for staff that do a lot of basic tasks, Calgren added.

"VDI is a great solution for them because they still have a workstation-like environment," he said. "Some people don't even know they're on thin clients, especially when they're on a LAN, because it's so fast and the experience is the same."

Many partners are using desktop virtualization as a conduit to offering Windows as a Service, Agrawal added, so regardless of the device someone is using, they are delivered the same interface they would expect when working in the office. "Windows as a Service is one of the key services coming out from channel partners and being adopted by small and mid-market businesses."

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