The Coming Desktop Revolution?

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The cost of operating virtual desktops that are hosted on servers in the data center, for example, is about 2% to 10% less than comparable conventional desktops when all costs, including maintenance, are considered, according to an August report from consulting firm Gartner (IT). That approach requires a capital investment in servers and/or storage, a barrier for many companies, according to the report.

Today the market is highly fragmented with very different approaches to desktop virtualization. The technology can be installed individually on a PC or hosted in a data center on servers or storage devices and delivered through conventional PCs or pared-down machines known as thin clients. Road warriors can even download entire desktops to thumb drives for business trips instead of lugging laptops. There are a range of offerings by software vendors such as VMware, Citrix, Microsoft (MSFT), IBM (IBM), Parallels, RingCube Technologies, Moka5, and others. The Secure Managed Client that Nortel is testing is the result of collaboration among Lenovo, Intel (INTC), and Avocent's LANDesk Software subsidiary and others.

Despite the untested nature of the technology, Bandrowczak and others have high hopes for virtual desktops. Many companies saw the enormous cost benefits of a related technology, virtual servers in the past few years. That technology let companies consolidate many servers onto one piece of hardware in the data center. It dramatically lowered hardware capital costs for companies, which added up in some cases to millions of dollars.

"With server virtualization, you're consolidating the data center and there's a clear-cut return on investment," says Chris Wolf, senior analyst at the Burton Group. "With desktop virtualization, I'm not taking resources out of the data center, I'm adding to it." On the high end, Wolf estimates a 40% reduction in desktop support costs, but generally, he says, that number is closer to 20%.

"No matter what you do, you have to spend some capital to get the costs out," says Bandrowczak. "Every CIO is looking at every technology to improve their infrastructure and their operating costs. We are under such tremendous pressure to drive better productivity, to drive better costs, especially in the economic climate we're in." In the face of challenges like that, even modest IT savings will do.

King is a writer for BusinessWeek.com in San Francisco.