Confirmed: VMware buys every part of RTO Software except what they owe Citrix. Our full analysis.

A few weeks ago, I wrote an article about the fact that Symantec had suddenly stopped selling their Workspace Profiles product which they OEM'ed from RTO Software.

A few weeks ago, I wrote an article about the fact that Symantec had suddenly stopped selling their Workspace Profiles product which they OEM'ed from RTO Software. I wondered why this was, and suggested that perhaps it was because Symantec competitor VMware was planning to buy RTO Software.

Yesterday both VMware and RTO Software announced that was true (via Warren Ponder, Scott Davis, and Chris Westphal—Yay bloggers!). Actually, I should say that's "almost" true. Before yesterday, RTO Software had four products:

  • Virtual Profiles
  • PinPoint (performance monitoring)
  • Discover (for discovering what's out there on your network)
  • TScale (memory, CPU, and registry optimization for Terminal Servers)

But VMware just bought the first three products, leaving TScale with RTO. (And if you go to rtosoft.com, you'll see their whole website is just about TScale now.)

Why doesn't VMware want TScale?

Before we dig into the analysis of why VMware bought these products and what they'll do with them, let's address the easy question first: Why didn't VMware just acquire the whole company?

In my mind there are two simple reasons for this: Remember that back in 2004, RTO Software licensed their TScale product to Citrix for inclusion in Presentation Server. (You can read our coverage of that 2004 agreement here, because hey, we were blogging way back then!) In my August 2005 audio interview with RTO Software founder Kevin Goodman, we learned that RTO had an operational agreement with Citrix where RTO would support the TScale product for a number of years. And since Memory Optimization Management is still a feature in XenApp 6, we can assume that RTO is still supporting it. And I can't imagine that VMware wants to have anything to do with supporting Citrix here! Couple that with the fact that VMware doesn't have a real solution for Terminal Servers (which is the whole point of TScale), and you can imagine a VMware exec saying, "Ummmm.. Yeeeeah... TScale? No thanks!"

So instead of buying the whole company, VMware buys the whole company minus TScale, which is why RTO Software is once again "The TScale Company!" RTO's Kevin Goodman will join VMware as a director of product management, which is great for him and VMware. Anyone who's been to BriForum knows that Kevin is one of the smartest and the nicest guys around.

What happens to RTO Software now?

RTO Software began life as a single product company (around TScale). Now that RTO Software is just TScale once again, the remaining employees from the TScale group were actually able to use the proceeds from the sale to buy the company. So now RTO Software truly is "The TScale Company." The remaining folks at RTO are really excited about this, as they feel that they're able to get back to their roots and they're happy to be able to do what they want.

In addition to TScale for Terminal Server, RTO has been talking about TScale for Hyper-V, which we're definitely going to hear more about in the coming months. (I guess that could be Reason #3 why VMware didn't want TScale.) Kevin's going to stay on as interim CEO for a few months until they can find someone to run RTO full time. (This will be in addition to his VMware role, so he's going to be a busy guy for awhile!)

What does this RTO deal mean for VMware?

When I first wrote about a potential VMware / RTO deal earlier this month, I was excited about how the real value of RTO Virtual Profiles was deeper than the Windows profile, writing:

When RTO Software was our Random Vendor of the Week on Brian Madden TV last May, developer Eric Tatum showed us some new functionality where the Virtual Profiles product could be used to manage and sync files outside of a user’s profile folder. That’s what ultimately led me to make the prediction from last week’s Brian Madden TV about 2010 Trends where I said that VMware has to get beyond this whole concept of copying and replicating entire VM disk images.

That’s the problem with VMware View’s experimental offline mode right now. When the user clicks a button to take his or her VM offline, View then copies the entire disk image (or disk image delta file) down to the user's workstation. But since that’s happening at the virtual hardware level--below Windows and below the file system--90%+ of the blocks that make up that disk delta file are completely worthless and do nothing but increase the sync time.

To further understand this, think about what happens if you just boot up Windows, make one little change to a text file, and then shut down Windows again. From a user perspective, you only need to change a few bytes of data in your text file. But how many blocks on the virtual disk actually change? Probably hundreds of megabytes by the time you look at time stamps and temp folders and the page file and all the other stuff that Windows writes to the disk as it’s used.

So VMware’s current Offline VDI concept is this “dumb” mode where it would have to replicate lots of megabytes to the client in order to transfer down the 1k file change. But if VMware owned RTO Software, and if Eric Tatum & Company could rebuild VMware’s offline syncing to happen “in band” (like “inside of Windows”) at the file (or part of file) level, then VMware would end up with a pretty bad-ass solution!

If done right, a user wouldn’t ever have to “check in” or “check out” a VM. The user’s data would just keep syncing in real-time (like with Dropbox or Live Mesh), so prepping the VM for offline use would be a simple as logging out and logging in to another location. (Or maybe VMware could combine live migration & LufLogix to just make this “flow” from device to device?)

I can't put enough emphasis on how important this is, especially since I think 90% of future "VDI" users will run VMs locally on their clients.

In fact I was so excited about this concept (and so sure VMware would buy RTO) that I really pushed this concept when I interviewed VMware desktop CTO Scott Davis a few weeks ago. Unfortunately he didn't seem too interested in this approach, instead insisting multiple times that disk data can be intelligently replicated at the block-level from outside of Windows. (I can't say that I agree, but whatever... There's a reason this guy is CTO and I'm just a blogger.)

Remember, VMware's getting more than just profile virtualization

Of course this VMware / RTO deal is about more than just RTO Virtual Profiles. VMware is also getting RTO's PinPoint and Discover products. If you read the acquisition FAQ (PDF link), VMware plans to discontinue the RTO stuff as standalone products and to instead integrate them into View and ThinApp.

RTO PinPoint

PinPoint is an application performance monitoring tool used to inform admins of potential problems with virtual desktops (slow logons, apps that are taking forever, etc.). One of the cool things about PinPoint is that it's focused on the process of why an app is slow as opposed to the microscopic milliseconds of data. What I mean is that most performance monitoring tools look at things like clock cycles to figure out how long different steps take to complete. But in a VM, the cycles in a guest do not necessarily match up to the physical real-world processor cycles. So since PinPoint is designed to run in a guest, it actually ignores process cycle times and instead looks at the time of day clock. This means that while PinPoint might only have accuracy to the nearest second, it can safely understand physical and virtual machine timings.

What's cool about this is that PinPoint bases its analysis on these real world timings. So for example if PinPoint is showing that a desktop login is taking two minutes, it can show that the AD connection took 10% of that time, and that the logon script processing took another 38%, etc. This means that PinPoint is not the tool to track SLAs for customers or users, but instead that it's meant to help admins figure out where the problem is.

PinPoint is also one of the few products that can look at the performance metrics of the client device (if it's Win32) when the user is connecting via RDP, ICA, or PCoIP. It can actually show an admin that a user is doing crazy stuff locally on their client (as opposed to inside their VM) which might negatively affect performance.

I would imagine that PinPoint will fit nicely into View to be VMware's in-box desktop performance monitoring solution. Maybe they can also use it to monitor the performance of ThinApp virtualized apps? (Which will be getting faster in the next release, by the way!)

RTO Discover

The final RTO product that now belongs to VMware is RTO Discover. Discover is sort of a "down and dirty" asset discovery tool. You install it on a single admin workstation and let it run, and it goes out and finds and inventories workstations, applications, servers, etc. It's not meant to be a full on asset management system, and it doesn't have the intelligence of Liquidware Labs or Lakeside Software's products to make recommendations about how your future VDI environment should look. But if you want a simple tool that can be done in 3 hours instead of 30 days, Discover is what you want.

I would imagine that VMware would maybe provide Discover for free (maybe just to partners?) to help people understand where their desktop starting point is before attempting virtualization? Again, VMware doesn't have anything like this now, and Discover is very easy to use, so it's a good fit.

What about others? Symantec? Citrix? AppSense?

So pretty much everyone thinks that this RTO deal was a good move for VMware. (Well, everyone except for VMware's competitors. How are they handling it?)

Ever since I reported that Symantec has stopped selling their Workspace Profiles product, I have not actually been able to get anyone from Symantec to share their thoughts on this. The same is true today. I still haven't heard a peep from Symantec about this despite asking a few different people.

Symantec isn't the only casualty here though. AppSense's Martin Ingram wrote a passive-aggressive "Congrats VMware and RTO" post, where he basically says that RTO's (and now VMware's) base-level personalization is fine as a starting point, but that it's not a real enterprise-class user environment solution. Martin was also critical of the "fundamental problem in a user virtualization solution that only works across a single vendor’s products." Presumably he's inferring that VMware's profile virtualization will only work in View environments, so what are customers supposed to do for their offline desktops, Terminal Servers, etc.?

It's a fair point. VMware would probably respond by saying that they soon expect every desktop to be in a VM (whether local or remote), so that issue will soon be moot. (I'm sort of half-writing that as a joke, but I know there are high-level people in VMware's desktop group who truly believe this, so we'll see.)

Of course you've got to consider the source of the "single vendor, single environment" critique. Even though AppSense does a lot more than just the user profile on VDI, every time a little "profile only" product is snapped up by a big company (Citrix acquiring Sepago Profiles, VMware acquiring RTO Virtual Profiles, etc.), companies like AppSense and RES Software have a harder time selling their stuff. (Although all's not lost. I hear Symantec might be looking for a new user environment solution.)

(And God-willing, so will Microsoft. :)

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Good news. At last, View will have some hardcore desktop DNA. Let's hope VMware can wrap all this up into a solid product offering by 4.5 (which I doubt)


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I used RTO Virtual Profiles for Citrix XenApp so I just got screwed! Also this means no possibility of 2008 support.


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All your suggesting is good except the assumption is wrong. This deal is a reactive move by VMW. The deal was pushed to them. Otherwise VMW would have bought RTO when they signed the OEM deal.


Kevin is a very valuable asset to VMW. But if you know where he is now reporting to and the quality of that leadership, you would hope his talent is not wasted.


Shanetech has a valid point. How to use the assets is more important than what assets you get. If you look back, not long, but just 9 months, you can find how many missteps that VMW desktop team has done and what kind of decision framework they have, if they do have one.


On paper,it is a good deal, But on reality, you will see a totally different result when the dust is settled.


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I have so many friends at VMware that go back several companies and all the really talented ones who were working on the Desktop have since moved on to other things inside of VMware (Cloud, SpringSource, etc.).


The Desktop BU seems to smell of "rats on a sinking ship." The Desktop BU was suppose to contribute between 7-10% of total revenue in 2009 ($140-$200M USD) and it's pretty safe to say they fell short.  How short? Who really knows since they refuse to disclose in their earnings reports? We've heard that they put up similar revenue numbers as Citrix Xendesktop in Q4 (~$30M) but that's all heresay.


That said, I have to agree with @vminsider


This RTO sounds good on paper for VMware but the lack of vision, the high degree of technology arrogance, and the inability to partner/assembly the various pieces to properly deliver a more complete desktop solution customers want all points to, as @vminsder so aptly states, "a totally different result when the dust is settled."


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Just curious, what happens to RTO"s pre-VMware customers of Virtual Profiles and PinPoint?  Are they now just VMware customers even if they don't use ESX?  That sounds like a support nightmare.


I'm happy for RTO, Virtual Profiles is a nice solution and I always though PinPoint was a very underrated, unheard of solution beyond IT admins, even for products outside of TS like Exchange and SQL.


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First off -  congratulations to RTO - great to know business can still be done in these times.


As for the future of the technology and how it will enhance the VMware View offering - i'd like to think VMware will really embrace these products - but the reality is that I'm not sure that I have any faith in them to fulfil the promise - but I, like many others would like to be proved wrong!.


To date VMware have not shown real interest in the desktop space - everything they have done both with the View product and with their other activities - product lines and acquisitions - points to their big play which is beating Microsoft to the prize of being the de facto platform for cloud based IaaS - ergo selling lots and lots of vSphere.


There has been real no attempt in the VMware offering to actually meet the wide challenges of desktop transformation and management - they are focussed on their model - HVD/VDI and that's it - forget anything else or any other use case - right now they just don't get it.


Desktop is a purely tactical play for VMware - and they are just waiting for the market to come to them - rather than really driving innovation and broadening the possibilities. I guess in a funny way its actually smart - why spend the money chasing something when others are out there seeding the market for you, and you can just take a little of the action that comes your way - a little action of a $65.7Billion HVD/VDI market by 2013 might do just fine as a sideline gig!


View today is half baked and half cocked - possibly suitable enough as a point solution for a specific use case or small group of users - but as a fully fledged delivery platform - there is only one player that has close to a full deck.


It could be that by bringing in the RTO products, VMware might finally be putting some skin into the desktop game, and trying to turn View into a credible solid offering with enough of the core pieces in the box, and maybe they'll even turn on the innovation engines too - I'd really like to see it happen - but ultimately don't think it will.


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I kinda feel bad as Virtual Profiles was IMO a very elegant approach to the fundamental flaws of profile management in the broad generic. I never was a customer, but I did see the value, Now that value is locked in within a single solution. I'd assume others are either to fill the gap, or worse, be serviced by yet more lock-ins in the respective offerings.


In a way I do understand those of that says that the fundamental problems within provision comes more natural to those of us doing this SBC thing, as the forces of computing have always being against us and thus by necessity forced to tackle these. The picture is however larger, the same problems are omnipresent, and so should the solutions be.


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@Tony - VMware will continue to support existing customers until their support agreements expire, at which point you'll be on your own unless you purchase a VMware View solution.  The products will not be sold separately.


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Hi Brian


Always enjoy your articles - this one is no exception and i like to refrain from Vendor flag waving comments - but


One point i would like to share my experience from "the Inside " on is the comment about it becoming harder to sell our solution when a new entry level profile management feature is available.


I've been running the technical side of AppSense in Aust/NZ now for over 6 years, and in that time a number of "out of the box" features have been released and been rasied as a reason not to buy AppSense.


What we need is for clients to test these features.


It was the same when Citrix released the CPU/Memory features - clients said they wouldn't buy AppSense until they tested the new features. About 3 - 6 months after the featrue was released our sales of Performance Manager went through the roof. People tested the feature, said they wanted more, tested PM and just bought it.


We see the same thing with the UPM feature in Citrix now. Clients test it and for some it does what they want. Most sites will then test Environment Manager, see the added value and just buy the product. - again our sales of EM are booming.


Built in features let vendors show their clients they listen and offer an entry level solution. But as is the case in the Backup world - not everyone is happy using NTBackup :-)


Clients are willing to pay money for excellent products that add significant value and reduce overall Cost Of Ownership and that will continue to be the case when Vmware release this feature.


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It seems that the primary gap vmware is trying to fill with the nice virtual profile software (and RTOs  5 acquired engineers, according to their FAQ) is actually to be able to provide single image for non-persistent pools, leveraging their linked-clone technology, an important storage saver, while preserving personalization. Without such software, only persistent pools can preserve persona, resulting in bloated storage costs and need to patch each and every image individually, a nightmare. However, frankly I don't see this move as a big enabler for expanding View to support mobile/offline/ remote users, since there are so many other unaddressed issues. For example, User installed apps (what Brian termed app layering) do not seem to be supported by RTO and are essential for knowledge workers; reliance on type-2 hypervisor mode is another killer for most enterprises due to the overhead in extra licenses, performance, and headache in maintaining two OS at the endpoint (and afaik CVP, even when released with Intel, is not planned to support offline images).. how to transfer efficiently modified disk images is another big issue that Brian rightfully brought up (and yes, it is much more difficult to be efficient when operating at the disk block level...)


In fact, reading through their FAQ doc in  


in www.vmware.com/.../VMware-RTO-acquisition-FAQ.pdf


one can see that support for mobile/remote users is barely mentioned in conjunction with this announcement...


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As I've mentioned on Twitter, this is good for Kevin, but bad for the industry.  Kevin/RTO often had a good way of accomplishing things in their products for TS/VDI.  By those products going over to VMware, I biggest concern is that those products would not be available to others outside of purchasing View (which sounds like exactly how they're going to do things).  Now, Virtual Profiles/PinPoint isn't the only way to get things done and there's tons of other vended solutions out there.  My point is that they've snapped up one other vendor that was fulfilling customer's needs.  While there are other choices out there, this does remove one of the "good guys".


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It is fully to see how VMware is pictured as an evil empire.. put any article talking about VMware, and wait for a flood of bad comments.


Citrix acquired Aurema in 2007, and discontinued their products, and I don't remember to hear complies :-D


When VMware does it, it is bad for the industry, bla bla bla ...


Funny to observe :-D


I personally believe this is a smart move, and looks like Brian's also thinks this, based on his unbiased analysis.


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In the first sentence above I meant "It is *funny*" :-D


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Yeah but the difference is that Aurema didn't have any customers. :)


You're right @VMguy, I do think this is a great move by VMware. I know from your comments from other articles that you're a "VMware guy" (employee / fan / whatever), which is cool.. but please remember that when VMware does great things, I say so! .. because I'm worried that the next time I write something bad about VMware everyone will forget this article and just say I'm biased against them. :)


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Brian,


Yes, I am a big fan of VMware, but with a strong Citrix background dated from MetaFrame 1.8 days :-D


Don't get me wrong, your articles are very impartial IMH. I am talking about the comments.


Nothing wrong with that also, everyone has its opinion, I was just noting that.


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@VMGuy - Dude what are you smoking?  Nothing in my comment directed ANYTHING about VMware being an evil empire or "rah rah Citrix" or anything like that.  I'm a passionate believer in Citrix, and I'm a passionate beliver in VMware.  You can ask any around that I'm one of the first people to tell Citrix that until they release a VMware version of their virtual appliances they are worthless to the Enterprise.  That definitely sounds like a Citrix fanboy to me ;)


What my comment DID highlight is that this removes one more profile vendor that's available in a NON-vendor affiliated form.  IF VMware opted to keep virtual profiles available as a standalone product AND allowed it to be integrated with ANY vendors VDI/TS solution, you'd hear no complaints from me.  Instead they're binding it to VMware View and therefore this is bad for the industry.  I had the exact same thoughts when Citrix acquired Sepago's profile solution and when any other vendor snaps up an independant product and bundles it with their suite.  It's that simple.


Shawn


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We all assume it is the move that VMware initiated, so they must have a plan. But what about if VMware was reactively dragged into this? In fact, I suspect that is the case. If VMware had thought about a great plan, they would have bought it back in last Sept. when they actually just did an OEM. Nothing changed from then.


VMware desktop does have a great pool of engineering talents. But that doesn't warranty a good product. The leadership plays an important role. Brian, try to talk to the one that Kevin is going to report to and get a sense on how much product management experience, skills or vision you can have confidence about. Remember, the team is as good as its weakest link.


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In my opinion RES en Appsense are not so much affected bij VMware buying some RTO stuff.......


PowerFuse 2010 closes the gap Microsoft has about User Workspace management, Also very usefull in Microsoft's 2008R2 SBC VDI sollutions ;-)


Citrix now (finaly) has experience in bringing back many management consoles to only one!, so they can help Appsense in this.


So what wil be left after Microsoft buy's RES (PowerFuse) and Citrix finaly takes over Appsense?.


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Another Briforum vendor bites the dust.


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So Kevin has been lurking and reading all the posts. I talked to him today and they are still busy 'closing' all the details of the transaction. He said he didn't mind some of the comments about RTO and himself but the false information about BriForum has to STOP. We have been to every BriForum, and we're not about to miss this year's. So stay tuned and Kevin will blog about this soon!


Nisee Jeans


RTO Software - The TScale® Company


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This just further underlines that VMWare has been selling shelveware. RTO never made View 4 and that’s amazing right? Let’s wait for View 4.5 to see if they add a very basic profile capability that is not cross platform, drive it around on a truck and have VMGuy hype it to idiots who blindly follow vendors.  No wonder they are giving this POS away for free as sweeteners to renew the ESX EA and sell more Virtual Center to really lock all the dumb Fs in for another 3 years.


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Didn't read through all the comments, but as far as I see, RTO Profiles + ThinApp might provide similar functionality to AppV's streaming mechanism.


Not sure how the performance compares, but I would imagine its at least comparable since AFAIK AppV requires an extraction after the streaming completes, which may not be needed by RTO.


Comments?


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