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DaaS earns its stripes with VMware Desktone acquisition

VMware officially joins the DaaS market with its acquisition of Desktone, signaling that Desktop as a Service is here to stay.

VMware's acquisition of Desktop as a Service provider Desktone could mean an uptick in DaaS adoption among ent...


While the acquisition eliminates some competition for VMware Inc., it provides existing Desktone partners with a greater customer base and brings Desktop as a Service (DaaS) into the spotlight.

Combining the Desktone platform with VMware Horizon View will provide a new option for "organizations looking for predictable economics, flexibility of cloud deployment or a way to deploy [virtual desktop infrastructure] with limited resources or in-house expertise," Sanjay Poonen, executive vice president and general manager of end-user computing for VMware, wrote in a blog post.

The big winner here winds up being DaaS in general.

Zeus Kerravala, principal analyst, ZK Research

Desktone was one of the first providers of Desktop as a Service, which hosts virtual desktops in the cloud and eliminates the complexity and costs of in-house virtual desktop infrastructure (VDI). 

Large vendors such as Citrix jumped on the DaaS train last year with plans to offer Windows as a Service options, but VMware didn't have a DaaS offering until it disclosed its own DaaS strategy in August.

Observers wondered if that would bring VMware into competition with its partner, Desktone, but the acquisition wheels had already begun to turn by that point.

"We were never going to go into the market and compete against them," said Erik Frieberg, a VMware spokesperson.

VMware will proceed with its plans to offer DaaS through its vCloud Hybrid Service, and will continue to work with other service providers as well, he said. As for whether Desktone will become a part of VMware or even be rebranded as a VMware product, VMware said Desktone will remain its own entity for now and will announce further plans for its technology in the future.

VMware: Final piece of the DaaS puzzle?

Small companies have been more likely to deploy cloud-hosted desktops because their IT departments feel more comfortable having a provider control their desktops. For enterprises, the benefits of DaaS just haven't outweighed the risks they see, particularly around cloud security.

But with the big VDI guys finally in the DaaS market, those organizations may be convinced to take a more serious look at DaaS.  

"Any time a vendor like VMware that is well-respected decides to make a play in a different market, it validates that market," said Dan Beauregard, senior director of strategic alliances for GreenBytes, Inc. a desktop virtualization software company based in Providence, R.I. "It shows that DaaS is now extremely relevant."

Getting existing VMware customers interested in DaaS will also be a boon for the market, said Zeus Kerravala, principal analyst at ZK Research, an IT advisory firm based in Westminster, Mass.

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"If you're a big VMware customer and they bring this offering to you, you're more likely to look at it instead of a totally different DaaS company," Kerravala said. "The big winner here winds up being DaaS in general."

The acquisition also gives VMware more options on how to approach DaaS, said Gunnar Berger, an analyst at Gartner, Inc., an IT research firm based in Stamford, Conn. DaaS represents a bigger potential market than traditional VDI, because the ability to offload management and pay on a subscription basis appeals to more organizations, he said.

"VDI is going to become a dated term," he added. "The future term is going to be Desktop as a Service or Windows as a Service, and it's going to be, 'Do you want it on-premises or off-premises or a hybrid model?' And honestly, VDI could use a rebranding."

What this means for Desktone partners

Vendors including Dell and IBM offer DaaS products built on Desktone software, but the acquisition will not affect Desktone's relationships with its service providers, Freiberg said. In fact, those partnerships appealed to VMware.

"[Desktone] comes, in essence, with a channel and a proven customer base," Frieberg said.

GreenBytes recently partnered with Desktone to offer an on-premises appliance that delivers desktops through the cloud. The acquisition means more customers and the ability for GreenBytes to transition from a hardware vendor to a software vendor, according to Beauregard, who manages the Desktone relationship.

"The reach that Desktone now has, being part of VMware, is much larger," he said. "It's a larger market that we can now play in."

Desktone partners should be happy about their widened customer base, but things could get complicated in the long run because VMware tends to like a lot of customer control, Kerravala said. Plus, VMware has a larger partner ecosystem than Desktone, so the acquisition could mean increased competition with its partners -- even those that have built products on Desktone, he said.

"VMware has been known to get very competitive with some of its partners," Kerravala said.

VMware's acquisition of Desktone closed earlier in Oct. 2013, but the vendor did not release financial details of the transaction.

Executive Editor Colin Steele contributed to this report.

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