Desktop Virtualization on a Slow Ramp, VMware Chief Says

Organizations are finding it hard to calculate the cost benefits of desktop virtualization and broad adoption is unlikely to happen for another year or two, VMware's CEO said on Wednesday.

Interest in the technology is high, and companies with a strong focus on security and regulatory compliance, such as financial services companies, are adopting it quickly, VMware CEO Paul Maritz said during the company's quarterly conference call Wednesday.

But for other organizations the benefits aren't so clear. Many companies don't know how much they spend to manage their standard, physical desktops, making it hard to calculate the return on investment for a virtual system, he said.

"A lot of companies frankly don't have a good handle on what the baseline is -- they can't tell you what it costs to provision a desktop today. So we need to work with them and develop the ROI models and we need a bit more history to make those models have credibility," he said.

"We view this as incredibly important, with a tremendous amount of potential, but it's really going to be into 2010 and 2011 before we start to see a significant impact in terms of large amounts of revenue," Maritz said.

He was answering questions from financial analysts, who wanted to know when the company's VMware View software would contribute significantly to its finances.

Microsoft and Citrix Systems also sell desktop virtualization software. The technology allows administrators to provision desktops from a central location, reducing the time and cost of managing individual PCs. And because the software runs in a virtual container, separate from the end user's PC, proponents say it is also be more secure.

"Every meeting I have with a CIO now, desktop virtualization is on the agenda," Maritz said. VMware's sales engineers are spending "fully 20 to 30 percent of their time" talking to customers about the technology, he said.

"So on the one hand there's tremendous interest. On the other hand ... people who want to do this for economic reasons, as a lower-cost way of provisioning end-user computing, it's going to take a while for them to get comfortable and really understand all the issues involved and get it into production."

"It's going to take a little time because we have to prove out the economic value proposition," he said.

VMware is working on a big update to its View software, although Maritz didn't say Wednesday when it will be released. The company's next VMworld conference is at the end of August in San Francisco.

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