Yesterday VMware announced that they have acquired desktop-as-a-service (DaaS) provider Desktone, and just like that, VMware is officially in the desktop hosting business. VMware now owns Desktone's intellectual property—their software stack which runs their DaaS platform—as well as their customers.
The acquisition is not entirely a surprise to most people, as last month VMware announced they were planning to enter the DaaS market using Desktone's platform. And Desktone had recently begun ratcheting up the anti-Citrix rhetoric with videos such as this trashing Citrix's efforts to move XenDesktop and XenApp to the cloud:
I guess this means whatever money Citrix invested in Desktone in 2007 is long gone?
Who is Desktone?
Desktone has been around for awhile and tried a few different business models over the years. They initially set up shop with intentions to be a sort of "service provider for service providers." Desktone would host white label desktops that companies like HP or Verizon could resell as their own offerings.
While a slew of early partnership announcements made it look like Desktone would be successful, but 2010 things weren't looking good. Desktone had underestimated how slow the whole process of selling through telcos was. As I wrote in 2011:
It would take 6-9 months right off the bat for the telco to really understand Desktone and to figure out how they'd do it. Then it would take another 6-9 months for the telco to build out their solution, followed by another 6-9 months for the telco's sales force to learn how to sell it. Add that together and you've got an 18-24 month cycle from Day One until the telco is really selling. And in this world, that's an eternity.
Of course there are other downsides to only selling through an intermediary. In the telco model, Desktone is removed from the actual end-customer feedback loop. Do customers like it? Are they using it? What features are important? What needs to be improved? Any answers to these questions come from the telco themselves, so it's hard to differentiate between what the telco wants and what the paying customers want.
These challenges meant that by 2011, Desktone had a new CEO, a new management team, and a new strategy. They bought racks and racks of servers, storage, and networking gear, installed all of it into a Rackspace colocation facility, and entered the DaaS business themselves by offering Windows 7 VDI for $1 per day.
I was actually pretty excited about that back then, though it didn't last long, as last year Desktone announced that they were exiting the hosting business and getting back into the business of selling software to service providers who want to host desktops for their customers.
Desktone != VDI (i.e. Desktone != Horizon View)
From the end-user perspective, it looks like a Desktone desktop is no different than any regular Citrix XenDesktop or VMware Horizon View desktop. In fact you can even connect to your Desktone desktop via HDX or PC-over-IP. But the connection protocols (and the fact that Desktone's back end runs on vSphere) are where the similarities end.
Desktone has built their product from the ground-up for hosting providers. Their platform is focuses on all the back-end stuff the providers need like multi-tenancy, hardware and network isolation, admin consoles for on-boarding customers, billing, and invoicing. In other words, there's no actual XenDesktop or View running back there. (They're just using something like Citrix HDX Connect or VMware View Agent Direct Connection to get the protocol without the broker so they can run it through their own system.)
So what exactly does Desktone have? If they're using VMware vSphere as their platform, HDX or PCoIP for the protocol, and NetApp and/or GreenBytes for their storage, what exactly does Desktone have that VMware wants to buy?
The answer is simple: Desktone has a connection broker that can scale much larger than VMware Horizon View. Sure, VMware talks about customers with 40k View users, but when you talk to the technical folks and ask about scalability, they'll laugh and say, "Oh that? Yeah, we had to build ten separate environments that are 4k users each."
To be clear, I'm not saying this means that Horizon View sucks. I'm just pointing out that Horizon View is built for small-to-medium environments that are run in-house, and Desktone is built for large environments run for other people. So when VMware wants to get into the business of hosting desktop environments for other people in the cloud, they ain't doing it with View.
So I wrote about last month, when VMware executives get up on stage and say that they're going to offer a DaaS version of Horizon View (or Horizon View as a Service), that's not exactly accurate. What they're offering is Windows 7 or RDSH desktops running on vSphere which users connect to from the View client via PCoIP. So yeah, it looks, feels, and tastes like Horizon View to the user, but the back end is not Horizon View at all.
Some have asked why I make a stink about this distinction, and I answer by cautioning potential customers from getting too excited about this today. VMware calls this "Horizon View desktops on the vCloud Hybrid Service," but when it comes to desktops, it's not what you'd expect. You don't get to use your existing Horizon View management console, users, disk images, or pools in the hybrid cloud. You can't "burst" your on-premesis Horizon View environment to the public cloud. You have two completely separate environments: your on-site Horizon View desktops, and your cloud-based Desktone-powered desktops.
For now VMware will continue to only sell the Horizon View software to customers, as Desktone's platform is not exactly something they can just package up into an .MSI. But it's conceivable in the future that they could fix it up enough to integrate it into one of their cloud platform products. (Or maybe they throw out the broker bits of Horizon View and scale Desktone down so it makes sense on premises too?)
So now VMware is competing with their partners?
The one thing I don't quite understand is why partners seem to be ok with VMware competing against them? To be clear, I confirmed with multiple VMware executives multiple times that, yes, VMware would be selling monthly access to desktops as a service directly to end customers. But VMware is also selling software to partners which the partners can use to build platforms to sell DaaS which means they're using VMware's software to compete against VMware, but it's not really competition since VMware is getting the licenses, so....
It's crazy, right? It kind of reminds me of Microsoft building their own Surface tablets because they wanted cool Windows hardware, while continuing to sell Windows software to their recently-dissed hardware partners and begging them to keep making their shitty hardware.
Though in reality I don't know how many partners are using Horizon View to sell DaaS? Every environment that I've heard about is more like "managed services for View" rather than true DaaS. In other words it's an MSP hosting and supporting a customer's View environment with a multi-year contract, rather than the MSP going out and selling desktop access by the month.
The secret win: VMware has to support Windows Server VMs now :)
One of the cool things to come out of this is that VMware Horizon View 5.3 (also announced yesterday) has a new feature (PDF) where they support using Windows Server 2008 as the desktop OS for hosted desktop users. It's funny how VMware amassed years of propaganda against using a server OS as a desktop platform (mainly because they had to market against RDSH-based XenApp environments), but now that they need Windows Server for DaaS license compliance, they've suddenly seen the light! :)
No word on whether this means they'll support multiple users per server (i.e. RDSH sessions) with PC-over-IP for Horizon View. I hope 'yes' but I fear 'no.'
Actually that's probably an announcement for VMworld 2014. "VMware will help you lower costs and complexity with a new type of virtualization called 'session virtualization' where we can run multiple users on the same VM, each with their own user environment!"
The bottom line
This was a good move for VMware. I'm sure Desktone was cheap, it gives the market the impression that VMware is serious about desktops in the cloud, it keeps them one step ahead of Citrix in this area, and it gives them a bit of technology they might be able to trickle down to Horizon View (or something they can use to replace View). Good move.