Desktop as a Service lowdown: Costs, pros and cons

Companies that want VDI but lack the expertise or the Capex look to Desktop as a Service, but cloud-hosted desktop costs vary.

Companies without the IT expertise to make all the pieces of VDI work can outsource the heavy lifting to a cloud-hosted desktop provider.

Virtual desktops in the cloud are always going to run slower than traditional desktops.

John Madrid,
chief technology officer, National Asset Direct Inc.

Lifting the desktop management burden off IT is, in fact, the biggest advantage of Desktop as a Service (DaaS) -- where virtual desktops are provided by a cloud hosting service.

While cloud circumvents the upfront Capex of a virtual desktop infrastructure (VDI), the long-term costs of paying a provider for DaaS versus maintaining and supporting desktops in-house are probably comparable, said John Madrid, chief technology officer at National Asset Direct Inc. (NAD), a national debt management firm that uses cloud-hosted virtual desktops from provider dinCloud.

But having access to the latest and greatest hardware and software without making the investment or having to maintain the infrastructure is a benefit well worth the price to some IT shops. Some liken it to leasing an automobile versus buying one.

"Part of the cost decision is whether you want to always drive a new car or use your car as long as you can, and pay for the replacement parts," Madrid said. "We would have to get to a critical mass to bring VDI back in-house; and even then, I don't know if I would want to get back in the business of [desktop] management," he said.

Desktop as a Service costs

There are a number of DaaS options available and a wide price range that depends on the types of virtual desktops that companies need.

Companies can buy nonpersistent hosted virtual desktops for less than $20 per user per month, or pay much more for fully customized desktops. For example, some of Citrix Systems Inc.'s service providers offer commodity desktop services, but the majority deliver persistent desktops that bundle XenDesktop with vertical industry apps, unified communications, unified storage and other services for customers at a price upward of $200 per seat, according to Ken Oestreich, a spokesperson for Citrix' Desktops and Apps.

"We aren't trying to offer commodity," Oestreich said. "But whether a business wants the lowest-cost desktop or a highly customized desktop, it is still in their best interest to outsource desktops, because if they were to do it themselves, it would cost far more to maintain and manage themselves."

Other DaaS options, such as Windows as a Service from Desktone Inc., costs $35 to $40 per user per month. Desktone claims its typical customers report saving around 20% to 30% over five years by moving from a physical infrastructure to DaaS.

Another choice is tuCloud, which claims to have the lowest DaaS pricing available because of its nonpersistent desktop model.

One of tuCloud's customers, Livermore National Labs, pays $22 per concurrently running desktop, but each CCU supports three named users. At any given time, to support a population of 5,000 users, the organization needs only about 3,500 running desktops -- which amounts to $77,000 -- or about $15.40 per user per month, according to Guise Bule, CEO of tuCloud and founder of the Desktop Superhero Alliance, a network of desktop delivery professionals.

"That's nonpersistency; we can support a much larger pool of named users than we have [CCUs]," Bule said. "Even if you gave each user their own desktop, they would still only cost $22 per desktop per month, at around 1,000 users."

In any DaaS scenario, customers bring their own Microsoft licenses to the cloud: There is no escaping those fees.

All of tuCloud's customers have Software Assurance (SA) in place and report usage of DaaS to Microsoft, Bule said. Typically, their usage is included in SA, he said.

Some DaaS providers, such as dinCloud, handle the nitty-gritty of Windows licensing -- another task well worth paying for, NAD's Madrid said.

Meanwhile, industry watchers such as Forrester Research analyst David Johnson predict that Microsoft will eventually offer Windows as a Service from Azure, and that's why the company hasn't delivered cloud-friendly Windows licensing just yet.

DaaS could bring hardware, Opex savings

While DaaS might not significantly lower desktop costs, customers can reduce their operating expenses and PC hardware costs. When NAD moved 200 Windows 7 desktops to dinCloud's Hosted Virtual Desktop (HVD) platform two years ago, the company cut its server infrastructure from 50 to 30 boxes, lowering both hardware and operational costs, Madrid said.

In addition, DaaS customers say their help desk becomes more efficient: Desktop replacements are rolled out quickly in the virtual world, compared to the hours or even days it takes to fix a laptop with a problem.

All in all, the resources companies need to run desktop operations are significantly less, according to Madrid. "I am able to run lean. If I have a server on-site, I need a backup, redundancy and an admin, and I don't have those costs now," he said. "All we need is a standard Internet connection -- keeping latency in mind -- and we work with a provider to keep a good connection."

Companies can also lengthen their PC refresh cycles by switching to thin clients. Thin client hardware ranges from $200 to $300 per desktop, and the cost is amortized over six years or more, as thin client hardware lasts longer than laptops or PCs, industry experts said.

Downsides of DaaS

There are tradeoffs with cloud-hosted virtual desktops. The biggest issue is periodic performance issues associated with latency.

More Deskto-as-a-Service considerations

DaaS providers and SPLA licenses for Windows 7

FAQ for Desktop as a Service

Guide to cloud-hosted desktops and apps

"When you are working off a cloud, you will periodically get hit," NAD's Madrid said. "You can minimize it to an extent … but it is a physics thing: Virtual desktops in the cloud are always going to run slower than traditional desktops."

For companies whose users rely on high-performance graphics applications, cloud-based virtual desktops may not be good enough. Dawnrunner, a San Francisco-based film production shop, experimented with cloud-based desktops and in-house remote desktops, and ruled them out.

"We have people remoting in from all over," CEO James Fox said. "Transferring terabytes of files across the cloud was too cumbersome to make happen." Instead, Dawnrunner uses Nvidia's Visual Computing Appliance to host virtual desktops on-site, he said.

But cloud service providers' businesses hinge on end-user performance, so they often work with customers to eliminate any performance issues, if possible, said David Gilon, Desktone's director of product management. "Software providers sell their stuff, and they have that revenue accounted for. Cloud providers can't afford to become shelfware," he said.

Good performance or not, some industries simply can't put their data in the cloud due to data security compliance rules.

"For a lot of businesses, [DaaS] makes a lot of sense, but the [financial industry] regulators haven't got to the point where [cloud] is okay," said Christopher Green, vice president for IT Infrastructure Systems at Washington Trust Bank, a large commercial bank based in the Northwest.

While data security remains a stopping block for many companies, some say there is minimal risk associated with adopting DaaS, and that the benefits far outweigh the risk.

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