Tuesday, September 04, 2007

The Business Value of Virtual Desktops

Managing desktop PC environments remains costly in most IT environments. First, most PCs are on a schedule to be ripped and replaced every 3 years, requiring a recurring hardware investment and labor to be budgeted to affect the change.

Even more so, PCs continue to place a management burden on the IT organization. According to IDC, in a white paper entitled “The relationship between IT labor costs and best practices for managing the Windows desktop” , IT labor costs were found in a survey of over 1,000 enterprises worldwide to range from $580 for a well managed, but not optimized PC environment, to $1,320 per PC per year for a poorly managed PC environment. The IT staff tasks for managing the PCs included PC support via the service desk, managing user adds, moves and changes, managing hardware install, moves adds and changes (iMACs), break-fix desk side support, managing software patches and installs / upgrades, security, backup and asset / financial and procurement management. As one example of the PC burden, the average PC user in these surveys generated 8.4 calls to the support desk per year.

Similar research from Gartner shows PC costs on average to be slightly less expensive each year, but still a sizable recurring burden:

PC Technical Services / Cost per PC per Year

  • User administration (Adds and Changes) - $11.00
  • Hardware configuration/reconfiguration (MACs) - $26.00
  • Hardware deployment - $7.00
  • Software deployment - $121.00
  • Application Management - $32.00
  • Backup, archiving, recovery - $7.00
  • Service Desk (Tier 0/1) - $239.00
  • Security Management - $30.00
  • IT Administration - $15.00

Total per desktop per year - $488.00

Reference: “TCO Comparison of PCs with Server-Based Computing" , Gartner, 15 June 2006

The Opportunity

One of the ways to reduce the PC management burden is via virtualized desktops. A virtual desktop lets the organization create and host desktops inside virtual machines running on centralized servers in a data center. With this feature, users can access their virtual desktops remotely from a traditional PC, thin client or re-purposed computer using a remote display protocol.


This enables users to be provided with the same look and feel functionality as they have today with their normal desktop, but provides IT with some drastic benefits:

1. Eliminate the need to rip and replace PC hardware every 3 years, extending the lifecycle investment of the core desktop infrastructure to six years or more

2. Simplify the management, support and administration of desktops, managing them centrally, simplifying desktop installations, patches, backups and maintenance.

3. Control access to sensitive data and intellectual property by maintaining information in a secure data center.

4. Provide for less issues and higher availability of the desktop systems – less user downtime.

5. Drive PC power savings replacing standard desktop PCs with more power friendly thin clients

6. Deliver higher business agility to handle user and system moves, adds and changes, particularly for major company events such as reorganizations or M&A support.


The Business Case for Virtual Desktops

In analyzing hardware savings, the 3 year rip and replace costs of the desktop is replaced by the investment in a centralized server infrastructure to support virtualization.

For a typical 500 PC environment, using a per PC cost of $1,399 per desktop, replacement costs are over $699,000. This cost is usually amortized over the lifecycle, three years, for an average annual cost of over $233,000 per year.

For a typical virtual PC environment, the costs are expected to be about 60% of the cost of the traditional desktop strategy, and can be amortized over six years. Overall costs are estimated to be about $437,000, and average $72,900 per year – a savings of almost 70% per year, or $160,000 per year for this typical 500 PC environment.

Examining potential IT management savings, we find that virtual PCs can deliver savings in specific areas including:

  • User administration – 80.5%
  • Hardware deployment – 28%
  • Software deployment – 95%
  • Application Management – 30%
  • Backup, archiving, recovery – 100%
  • Service Desk (Tier 0/1) – 62%
  • Security Management – 50%
  • IT Administration – 50%

One task is estimated to require more workload in the virtualized environment and that is hardware configuration and reconfiguration – managing the central server infrastructure, at a 27% increment over the desktop environment.

Overall, PC technical services labor is reduced by $306 per PC per year, from $488 on average to just $182 per PC per year, a savings of $153,000 per year for a typical 500 PC environment.

The Bottom-Line

For a typical 500 desktop virtualization just the replacement and labor savings add up to NPV Savings of over $80,000 (with a 10% cost of capital), achieving a payback in less than 12 months.

Even with this great of a case, there is still plenty of upside additional savings in this business case for improved availability, improved disaster recovery, higher business agility, and substantial PC power savings – making virtual desktops for certain environments worthy of immediate consideration.

The bigger issue is how to implement as there are many options including server based computing (eg. Wyse), virtual desktop infrastructure (eg. VDI), and streaming desktop (eg. Softricity).

For a personal quantification as to the potential value of virtual desktop, visit:
http://www.vmware.com/go/calculator



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