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Virtual desktops -- not less to buy but likely less to maintain

When your desktop virtualization vendor says their solution saves you money, you have to figure out whether it's going to save on capital or operational expenses.

Last week's column explored why people are thinking about desktop virtualization in 2009. The reality is that most, if not all, of the reasons are about saving costs. As you're probably aware, business costs are usually divided into two classifications:


  • Capital expenses
  • Operational expenses

Over the past few years, the trend in IT has been to shorten these to "CAPEX" and "OPEX." So if you want to sound cool, this is your first step.

Broadly defined, CAPEX expenses are one-time costs, and OPEX are the ongoing costs. CAPEX includes things like buying the software and hardware that you'll need and paying for the time and money to do the actual implementation and migration. OPEX is usually just support and maintenance costs.

So when you, a vendor, a consultant or your boss says that a particular solution will save money, you need to know whether it's going to save CAPEX or OPEX.

More from Brian Madden:

There have been entire books written and companies dedicated to modeling the expenses of IT systems, and givien the fact that there are so many different types of desktop virtualization, we can't possibly do a proper expense analysis in just 500 words. But we can look at some quick "back of the napkin" style numbers to think about how virtual desktops and physical desktops compare to each other.

Most desktop virtualization solutions save money on OPEX, not CAPEX. The cost of buying, installing and rolling out a desktop virtualization solution for say, 500 users, is probably about the same cost as rolling out 500 physical desktops for those same users. The big cost savings comes with lower management costs, which would be OPEX.

But this can be a problem. Historically speaking, CAPEX is a relatively straightforward expense to quantify. It's easy to know exactly how much money you spend to buy hardware and software. Just ask your accounting department. And it's easy to figure out how many hours you spend implementing a solution. So CAPEX of virtual desktops versus CAPEX of physical desktops is a simple calculation.

OPEX, on the other hand, is much more difficult to quantify, for two reasons:


  1. There's no clear-cut way to figure out what's included in your OPEX calculation
  2. Before a project has been implemented, actual OPEX is just a best-guess estimate anyway

For example, are you including things like "productivity gained by less downtime" or "power savings by going to thin clients" in your OPEX? And if you're not, is your vendor or consultant or whomever is building your ROI cost model?

The bottom line is that yes, most people implement desktop virtualization to save money, and yes, most people do actually realize those savings. But it's important to figure out what you're saving for both CAPEX and OPEX, and to figure out what will and will not be included in your OPEX calculations.

And if you're playing the role of trying to get your boss to buy into desktop virtualization, and he or she says, "show me the savings," remember it's really easy to fudge the OPEX predictions. *Insert wink here*



Brian Madden, Independent Industry Analyst and Blogger
Brian Madden is known throughout the world as an opinionated, super technical, fiercely independent desktop virtualization expert. He's written several books and over 1,000 articles about desktop and application virtualization. Brian's blog,, receives millions of visitors per year and is a leading source for conversation, debate and discourse about the application and desktop virtualization industry. Brian is also the creator of BriForum, the premier independent application delivery technical conference.

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