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Shifting The Economics – The Cost Of Desktop Virtualization Just Went Down

Yes, I am saying it…the cost of desktop virtualization is finally going in the right direction! For those of you who know me from my Forrester Research days, you will know that I was a huge proponent of desktop virtualization for reasons of security, manageability, compliance, flexibility, business continuity…the list goes on. However, I was quite vocal that desktop virtualization should NOT be considered for cost reduction, as the infrastructure costs were just too high.

By way of introduction, my name is Natalie Lambert and I am a new director of product marketing for Citrix XenDesktop. I came to Citrix in November of last year from Forrester where I covered desktop virtualization, among other things. While I loved being an analyst, I really wanted to jump over to the “other side” to start truly getting involved in the technologies that I have been consulting on for the past 7 years.

Given that I have only been at Citrix for 2 months, I still consider myself unbiased. So, when I say that the cost of desktop virtualization is going down, I really mean it. Yesterday, Citrix announced dramatic improvements in the scalability of XenDesktop. So, what does this mean? Let me compare this with what I found when I was at Forrester and wrote the report Inquiry Insights: Client Virtualization, Q3 2008. At a high level, I estimated that it costs organizations approximately $1,760 per user for hosted VM-based desktop virtualization (VDI). I got this number by assuming the following: 1) $300 per thin client; 2) $10,000 per server that can accommodate 10 users; 3) $200 storage costs per user (20 GB at $10 per GB); 4) $110 per device for the Windows VECD license (assuming the customer was not a Microsoft Software Assurance customer); and 5) $150 per user for the virtualization license. What I want to highlight here is the server cost: 10 users on a $10,000 server cost organizations approximately $1,000 per user. That was common back in July 2008 – especially for users getting started with desktop virtualization.

However, with the latest Intel® Xeon® processor™ 5500 technology, Citrix can now support 125 users per server when delivering hosted VM-based desktops. If we use the servers that Citrix just verified, the Dell PowerEdge R710, at $8,886 per server, the cost for the server infrastructure drops to $71 per user – instead of $1,000! Just that small change cuts the cost of desktop virtualization in half, if not more!! Now, I am aware that storage costs have changed as well, as cost per GB per user is not an accurate way to measure storage costs, I will leave this for another day and only say that those costs are going down as well.

In the end, desktop virtualization is still expensive (especially VDI), however, the costs are much more in your favor than ever before.

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