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September 27, 2009

The desktops may be virtual, but the ROI is real

Fielding questions while on the VDI panel at last month's Vail Pacific Crest Forum, it became apparent that investment analysts consider a lack of VDI ROI to be common knowledge. But while the savings resulting from desktop virtualization may be less obvious than with server consolidation, they nonetheless are often substantial.

Gartner's March 2009 press release predicts exploding VDI sales of $65B by 2013 – equating to 40% of the professional PC market, and up from only $1.4B and less than 1% today. This represents "…part of bigger shift in client computing from traditional thick-client distributed PCs toward more manageable, secure and centralized client computing environments." A VMware-sponsored IDC analysis of View customers indicates that a centralized VDI approach produces measurable efficiencies.

The IDC white paper shows that compared with using unmanaged PCs, organizations deploying VMware View saved an average of $287 per user annually from lower device costs and $601 from lower IT support costs. Another $130 was saved from improved user productivity resulting from faster start-up time, less security issues, etc. The overall 5 year ROI was 367% with a 5.61 month payback.

While the white paper lacks supporting data, the numbers nonetheless look reasonable. For comparison, I recently calculated annual savings of $455 for an organization virtualizing 1,000 PCs and laptops as part of a phase one View 3 deployment. The payback period of 11.7 months against an investment of $500,000 is in the general vicinity of the IDC averages. Applying the IDC white paper estimate of $130 in user productivity savings further reduces the payback period to 9.3 months.

The only support savings calculated are those specifically related to hardware issues. The organization's extraordinarily well-managed physical desktop environment includes extensive tracking and categorization of support request – conferring unusual confidence in the numbers.  

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The analysis assumes that as PCs and laptops reach their refresh periods of 48 months and 36 months respectively, they are replaced with Pano Logic zero clients. The already mostly virtualized data center reduces the incremental storage, server and services costs from those required for a green field VDI deployment.

Annual HW/SW savings of $131 per user result primarily from no longer needing to refresh the $800 PCs and $1,200 laptops (including tax, shipping, set-up, etc.). The $324 in annual hardware-related support costs per PC/laptop does not include typical costs of less well-managed environments such as OS and application patching/upgrades, desktop imaging, etc.

This organization lacks small remote offices that could significantly contribute to VDI savings by eliminating local network infrastructures. And the ROI doesn't quantify tangential VDI enhancements such as much faster boot times, greater stability, reduced security risk and ubiquitous desktop access from anywhere users can get to a browser. It also disregards significant disaster recovery advantages.

Embracing VDI

Tyler Rohrer makes a case on www.vdi.com that VDI is not about reduced Capex or Opex, but about increased potential user productivity. It certainly is useful to compute not only productivity benefits, but also to evaluate the positive impact of virtual desktops on organizational objectives such as "green IT", employee empowerment and business process efficiency. But at the end of the day, CFOs expect to see hard metrics for VDI savings. Fortunately, it frequently is possible to show a compelling ROI.

Note: This article is also posted on http://www.dabcc.com/article.aspx?id=12094

 

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12 Responses to The desktops may be virtual, but the ROI is real

  1. Great Article!
    Regarding your cost saving analysis … What variable is it most sensitive to?
    Thanks
    Rosen

  2. The largest variable tends to be desktop support – but that figure varies wildly whether being compared with a managed or unmanaged desktop. To give a few examples, IDC says that VDI reduces deskside service for end users by 94%, patching, upgrading and supporting applications by 58% and application testing and provisioning by 39%.

  3. A very good article…
    Now that VDI’s benefits get clearer, I wonder what about VDI for home users?
    When will this trend move toward home usage? Are there any real benefits for them (/us)?
    Any thoughts?

  4. We already have VDI for home users via the cloud – it’s called Facebook, Google, Yahoo Mail, MS On-Line, etc. But I don’t foresee Windows-based hosted desktops for consumers unless Microsoft itself starts offering something.

  5. Microsoft? How will they offer such solutions? As a built-in feature? An add-on? per use?
    I hear they might release their own VDI solution later this year. Do you know anything about it?

  6. Hi Steve,
    I didn’t see an allowance for VECD licenses. The big killer is non-SA customers and customers that deploy Thin Clients.
    Also, storage can be a large cost if using Windows XP. Not in space, but IOPS. There may be cases where you need to add a lot of spindles, which could equate to a shelf or two.
    And of course if deploying over a WAN, you need to factor in WANOptimisation at minimum.
    There are lots of hidden costs. It’s not as simple as people often think.
    Cheers,
    Jeremy.

  7. Jeremy,
    Thanks for your comments. Regarding VECD, the licensing can range from no (or potentially even positive) impact to somewhat painful, but should be relatively inconsequential compared with overall savings. Not that it shouldn’t be calculated – it certainly should along with numerous other components as part of a granular ROI/envisioning phase, but is likely not material enough to affect an order-of-magnitude ROI decision such as outlined in the post. I did include an increased amount for storage requirements in the model which should be minimized through technologies such as View 3 linked clones or NetApp FlexClone. Spindle count should be a non-issue because, as the post references, VDI should be an overlay on top of the virtual server environment which will already be utilizing spindle-enabling technologies such as MetaLUNs or Aggregates. If running VDI over a WAN, optimization may or may not be necessary depending upon the protocol utilized and the bandwidth available. Regardless, if centralizing VDI in this manner as mentioned in the article, there will be offsetting costs of eliminating the network infrastructure (including servers, backup, administration, etc.) at the remote facilities. In summary, the post is hardly meant to be an all encompassing treatise on VDI ROI, but rather a brief explanation of how VDI can enable significant economic benefits.

  8. You seem to have got the niche from the root, Awesome work

  9. There has been a lot of speculation about Microsoft offering its own VDI solutions, and a recent article (sorry I don’t have the link) discussed how customers can create one today with existing Microsoft products. That being said, Microsoft typically goes to market with Citrix XenDesktop which is an excellent VDI solution. It runs fine on UCS, but isn’t supported on Matrix.

  10. While not relevant to the article, since you asked, I don’t see VDI as moving toward home usage. Home users are more likely to utilize Web-based applications such as Facebook, gmail, etc. VDI is a good solution for corporate users that must all standardize on a limited number of Windows-based productivity packages. Providing a virtual desktop often enables organizations to significantly reduce the cost while improving both the management and security of their desktop infrastructure.

  11. This is wonderful information right here! Wonderful job… Please continue the good work!

  12. Thanks for this article..
    Well I think that ROI doesn’t quantify tangential VDI enhancements such as much faster boot times, greater stability, reduced security risk and ubiquitous desktop access from anywhere users can get to a browser. It also disregards significant disaster recovery advantages.

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