Gartner predicts $65.7 billion in VDI revenue and 49 million users in 2013

"Wowsers!"That's what Brian said to me when he forwarded me a link to an article about a recent Gartner report.

"Wowsers!"

That's what Brian said to me when he forwarded me a link to an article about a recent Gartner report.  The article reports on what Gartner expects the "Hosted Virtual Desktop" (that's Gartner's term for VDI, but more specifically, server-side hosted desktops - not including client hypervisors) market to do over the next five years.

For starters, in the next year Gartner expects the worldwide HVD market to grow from $1.3 billion to $1.5 billion--about a 15% gain, but that's not very "wowsers"-worthy.

What sticks out is that Gartner predicts the HVD market will grow to be a massive $65.7 billion market by 2013.  There's the "Wowsers!" moment, especially when you consider that the number of units used to calculate this number range from 500,000 units in 2009 to 49 million units.

That means that the cost of a typical VDI implementation at this point is $2600 per unit this year, but by 2013 the cost per unit will drop almost 50% to $1340.

The article goes on to say that right now, VDI makes up "less than 1 percent of the worldwide professional PC market," and that in 2013, that number will grow to "more than 40 percent of the worldwide professional PC market."

So why is this so amazing?  Well, for starters, the VDI market going from $1.3 billion to $65.7 billion is pretty interesting.  Not only does that serve to validate this technology, but it shows that in a down economy VDI is going to grow at a phenomenal rate.  And since Hosted Virtual Desktops doesn't include client hypervisors, that means that 49 million units number leaves out what could be another pretty sizable group of users.

Those figures take into account a drop in hardware prices, but an increase in the need for servers, bandwidth, and supporting software.  Not an increase in price for those, necessarily, but an increase in the actual numbers needed to support the increase in users/servers.

Enough numbers.  What's it going to take to for a vendor to take advantage of that kind of growth?

  • Remote Display Protocol - If a solution doesn't have a good remote display protocol, they're out.  Those companies can only hope to piggyback on RDP7 (or 8 by 2013?) or hope that VESA brings something to the table with Net2Display that everyone can take advantage of.
  • Client Hypervisor - Having a client hypervisor might not make or break a company's chances, but it could provide a leg up.  My guess is that there will be some interoperability, or at least some third party products that work with the big names.  I imagine it as more of a value-add than a make-or-break feature, but who knows--five years is an eternity in this space.
  • An All-Encompassing Solution - Having an end to end solution, however, is important.  This could mean an end to end software solution, but it could also mean an end to end hardware/software solution.  For instance, Cisco continues to invest in software (although not in the VDI space), and has recently made a splash with the announcement that they will be selling blade servers as part of an overall data center solution.  Imagine the overall solution if Cisco were to buy Citrix for their VDI capabilities and, say, DataCore for their storage virtualization technology.  Wowsers.

So now I'll ask you - do you think these numbers are too optimistic or unrealistic?  What do you think the VDI vendors need to do to capitalize on that kind of growth?

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Well, when defining our VDI Service Offering we have a projected 30,000 seats out of 100,000 by 2011


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If only 30% of the Gartner number come to fruition it is still huge. The real question is which VDI/HVD model will win. Who really needs expensive VDI when there are other ways to do it using more traditional methods. So I agree the market opportunity is huge, it's the method that is in question. 100% for sure is that this means great news for the kings of the protocol, AKA Citrix, and why VMWare is clamering to catch up, while others will simply evolve RDP. Net2Display will not matter, hence why VMWare is running like girls from it....


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Flashback:


Gartner Group predicts that 40% of all enterprises will deploy network computers by 1999, and 60% will deploy them by 2001.Jupiter Communications recently predicted that 36 million NCs will be in use by the Year 2000.


www.thefreelibrary.com/IBM+Bullish+On+Network+Computers+for+1998%3B+Customers+Cite+Fast...-a020104888


Hmmm.....


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@Flashback


thanks for the doze of reality .. Gartner KoolAid is tasty and highly addictive - best chased down with a cold glass of reality.  


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I don't buy Gartner's number at all. I've read the same report and nowhere can that number be properly justified.


What would drive VDI to have 50 times growth, in 4 years, from the supposedly $1.3b? From what I have seen, the two big players do not come anywhere close to half a billion combined in 2009.


The Gartner people are smoking something...


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I'm sure that $1.3bn figure includes server hardware and client hardware/software, too, so that should get us quite a bit closer to the 1.3bn number.  Still, I wish I knew what was used to calculate those costs.


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"That means that the cost of a typical VDI implementation at this point is $2600 per unit this year, but by 2013 the cost per unit will drop almost 50% to $1340"


That is actually damn close to our numbers, our cost right now is $2000 per unit and our goal is to have it down to anywhere from $600 to $800 by that time as well. Our VDI is based on a Service so that drop is not that far fetched as you will always pay less for something over time with a service.


My personal opinion is that our (company I work for) goals are very idealistic and probably injected with my own personal opinion (see first post). But, what I am not sure of is where everything ends up, and what I mean by that is, I feel the next few years will be the pivotal years, just like 02-04 was for Server Virtualization. I will admit it, I looked at GSX and early ESX and said, hmm, “That is really cool, but I would never put a production server on it”. What I am trying to say is, I feel some of the things happening in the Client Hypervisor , Provisioning, Remote Display Protocol, Offline VDI, and storage spaces really need to come together to create that paradigm shift in the traditional windows client/server model we are accustomed to. Once that convergence takes place and this stuff really starts to work, save money, and change our entire computing model, those numbers and even greater are a definite reality.


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I have to agree with most of you. I totally love the idea of VDI. I know it works and can really do alot for business, but I really dont think growth will be as fast or rapid as gartner states. VDI has really started getting to the point that its becoming actually functional. I am really interested to see what the VDI landscape is going to look like by the end of the year. I have my personal favorites, but I still see alot of aquisitions going to happen this year and the next. I have a feeling the VDI and Virtual space in generally is going to heat up and boil over by the end of 2010.


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Gabe


I assuming that these revenue figures include h/w s/w AND consulting/implementation costs, it's that last one that makes the difference when it comes to making sense of the initial $1.3b.  But for all that I can't see how Gartner can justify $65 b in just 4 years.


I've been preparing a blog post looking into this claim for a little while - I guess I should really finish it now.


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Thanks, Simon.  This was my gut reaction and a tiny bit of research.  I was a little surprised to hear how accurate the current numbers are compared to ShaneTech's experience, but I'm more curious to see how Gartner expects the industry will grow 5000% in the next 5 years.  If you have come to any conclusions while working on your post, I'd love to hear them!


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The more I think about it the less comfortable I am with the idea that we could see that many VDI users in such a very short period of time.  I covered it in a little more depth on my blog, but it really boils down to four things.


Lack of a comprensive solution for VDI - something that you and Brian have covered in the past.


Lack of maturity of the technology - I cover this in more depth in my vlog


Lack of money - that annoying recession again


Lack of space in in the data center


The four, singly or together will not prevent but will certainly slow adoption.


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Well, based on my work for the past few years, i can tell you, the log-jam of Pilots, and Proofs of concept will not break (and hence no billion dollar market) until customers and PSO partners begin to actively and aggressively and honestly assess their desktop workloads today, consider appropriate architectures, validate before expansion, and convince lines of business that our VDI/HVD/DaaS etc are financially justifiable as well.  Assess.Design.Deploy.Manage [ repeat as necessary ]


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Here is another point..open for debate. When i travelled for VMware every customer wanted to talk about overseas developers and often disconnected laptop users.


My advice....if we begin with lan attached task workers...the true low hanging fruit of today, given the current state of the art, we all do a wonderful service to customers to begin to be successful with our solutions.


Assess.Design.Deploy.Manage [repeat as necessary]


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More input, this time from Burton Group


"Burton Group recommends that, due to lack of desktop virtualization platform maturity and lack of cohesive support ecosystem, wholesale virtual desktop adoption be delayed until mid-2010."


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