Get Ready for Virtualization-as-a-Service

As part of the franchisor's ConnectedOffice remote management service, the first iteration of the virtualized desktop environment will place VMware virtual desktop infrastructure (VDI) inside the firewall at a client site, according to The Utility Company president Mark Scott. Around mid-2008, the company will release a version of ConnectedOffice that hosts the VDI at The Utility Company's own service center.

Scott, who was a founder of MSP platform vendor N-able, broke from the licensing model favored by many MSP vendors with the franchise-based company he started just a few years ago. He believes there's a compelling virtualization pitch to be made to managed services customers, one that runs counter to what he perceives as the misplaced priorities of some of The Utility Company's competitors.

"The MSP vendors' business is built on the complexity of the infrastructure. The whole MSP vendor ecosystem is built on that end-client infrastructure being complex. You require all this remote backup and storage, end-user hardware, etc. When you go virtual, that goes away," Scott said.

"For most MSPs, their motivation is to load people up on hardware, systems, VoIP, etc., so they can load the management service on top of that. The SMBs aren't benefiting. They're still spending unprecedented amounts of money on IT, to the point where most SMBs are over-spending on under-utilized technology."

Scott Jackson, the director of services at The Utility Company, says that virtualization is the key to getting more life out of existing hardware at customer sites.

"On the desktop side, a lot of what we're talking about is life-cycle management. We can still leverage [a customer's] current PCs, but provide them with a virtual interface instead of upgrading their hardware. As you add new users and need to add new equipment, we can offset a lot of that cost with thin client tech," Jackson said.

Scott claims The Utility Company will be able to "extend the life cycle of the average PC from three years to seven years" with its virtualization service.

Virtualization is as hot a technology as there is, but sources in the greater MSP community have their doubts about how quickly businesses will adopt virtualized desktop environments.

Mike Backers, CEO of Cincinnati, Ohio-based MSP Altoria Solutions, questions whether savings will be all that great for companies buying into the virtualization craze.

"With the constant drop in prices for PCs and laptops, it's not clear if the savings will be that great. And people still like the Microsoft model where you buy the CD and load software. People also like to be unconnected sometimes," he said.

Still, virtualization at the cubicle level is coming, Backers said. It's just difficult to determine how many SMB crumbs the giants of the webapp world like Google and SalesForce.com will leave for the rest of us.

"I could easily see it coming to fruition, particularly with Google Apps. I think there's going to be a very big push there, and it will probably be led by Google. And the main issue will be privacy concerns. But just from a conceptual perspective, if Google succeeds at making hosted business applications mainstream, where everybody's comfortable with that, it could open up some possibilities for MSPs," Backers said.

MSP Alliance president Charles Weaver reports that members of his association who have recently built virtualized desktop services didn't necessarily do so to beat the competition on hardware costs. Rather, the two small MSP shops he cited who built locked-down dummy machines running on hosted applications for client sites, did it to minimize trouble tickets and help desk calls.

If virtualization turns out to be a decent aspirin for those twin headaches of the managed services world, maybe The Utility Company's model will catch on faster with MSPs than some might think.