Desktop Virtualization — How Will It Impact Desktop Outsourcing Costs?

When it comes to desktop computing, sourcing teams find themselves getting to grips with a whole range of change drivers — from the arrival of Microsoft Windows 7 to the new desktop usage preferences of younger employees, while still striving to keep costs down. In Forrester’s discussions of these trends with vendors, service providers, and buyer companies, desktop virtualization has been one of the most commonly mentioned areas of interest. Software vendors active in this area — like Citrix or VMware — promote the cost benefits of their virtualization technologies for enterprise customers. And outsourcing providers themselves have begun to sing a similar tune.

  • Cost reduction claims seem plausible… Certainly desktop virtualization has genuine potential to support cost reduction. What Forrester calls “hosted desktop virtualization” involves running the entire desktop environment — OS, tools, and apps — on a central set of servers, rather than each desktop. This largely eliminates costs associated with deskside support for apps maintenance, bug fixing and the like. It also offers potential to deploy lower-cost hardware for some categories of users, and extend the life of this hardware in service — as the servers handle the added performance load needed to support software upgrades, end users’ added usage requirements and similar.
  • …but there may be a fly in the ointment. Despite these advantages, desktop virtualization’s potential to reduce desktop outsourcing contract costs still looks cloudy. First off, consider the added spending needed on the server infrastructure when employing this model. The server farm will carry a higher processing load, and will need more highly specified storage systems, by comparison with a more conventional client/server architecture. Some firms may need to fund a network upgrade also, to cope with higher data transport demands. And of course there’s always the temptation for the outsourcing provider to skim off some of the cost benefits of the virtualized architecture, to shore up their own margins.


Forrester is very interested to hear how current users are getting along with hosted desktop virtualization — in particular how the cost equation has panned out. If you have some experiences you’d like to share with Forrester, then please post a comment in our blog forum.

Andrew Parker, Vice President and Principal Analyst


Internal IT organizations

Internal IT organizations choose to outsource for any number of reasons: to cut costs,
improve service, increase efficiency. Increasingly, they're seeking innovation from their
IT outsourcing partners, even though many don't have a clear picture of what innovation
means in the context of outsourcing. Thanks for the post.

re: Desktop Virtualization — How Will It Impact Desktop Outsour

We are currently doing a PoC for a big customer what we refer as a "Private Cloud for Virtual Desktop". We have demonstrated our architect to customer using Parallels PVC4 and it is so far successful. I agree with you that server cost and loading will be high on network but if Admin wants a total control over user's desktop and company want to save ton of money in upgrade costs, virus reduction, misuse of company time and property and better utilization of companies resources, then this is the way to go. Shortly, we will have complete white paper on this 1,000+ user VDI case study.

re: Desktop Virtualization — How Will It Impact Desktop Outsour

I'm glad to see Ravi Pradhan's input in relation to my blog post. It's vital that we see real-life evidence of how these technologies play out in the enterprise environment, and how the balance of costs and savings develops. I'm sure Ravi will forgive me if I comment that, as an analyst, I would expect nothing else from a supplier than reinforcement of the value of desktop virtualization solutions. But I do expect to see really credible examples of cost savings proven over time, and I'm totally open to any source that can begin to demonstrate that.

Andrew, one the biggest

Andrew, one the biggest problem of doing ROI/TCO or any cost benefit, is how to calculate cost of security or breach of security and data theft and downtime due to virus attacks or need to add new software to users desk.

We have now successfully exited VDI PoC and moving to first phase of implementation at very large Telco in India. When we started with VDI PoC, our goal was to improve security, reduce desktop PC upgrade cost (application software and hardware), reduce virus problems and avoid users adding their own applications on the desktops. In short, give total control of users desktop to admin person. We are working in a highly secure 24x7x365 days environment. Cost of implementation was not an issue.

But coming back to your question on VDI benefits to Outsourcing. Now after successfully doing PoC and even adding 2 Factor Authentication, Network Access Control, and other features, I now firmly believe that VDI will be an outstanding solution for Outsourcing industry in India, Philippines , etc. Problem, is lack of technical know-how about advance technologies like VDI. This is not easy. There are no expert available locally.

To me VDI vs regular desktop discussion is similar to Land line phone vs Cell/mobile phone argument, 12-15 years ago, it was difficult to justify buying cell/mobile phone, then. Being 32+ years in this IT industry, I have seen the huge changes. My first job was with IBM USA working on Mainframes. Sometimes we need have a strong belief and sometimes strong conviction in technology. You can never justify costs in newer technologies.

I will certainly share with you and readers of this blog all the cost analysis.