Adapt or Die: How Desktop Virtualization Will Reshape the Value-Added Reseller

Posted by

Simon Bramfitt

First published 2/17/11 at Simon Bramfitt Blog.

Brian’s Note: A pal passed this along. It struck me as a little geeky, though a good read, until I realized the author was talking about a revolution in how IT in small and mid-sized physician practices is underway. If you’re a doc or a practice manager, then I’d urge you to take a few minutes, bear with the author, and read this through.

Back in 1987 I spent a while working for a PC dealership, what we now call a Value Added Reseller.  I don’t actually recall that the term VAR had been coined at that point, and besides the people I worked for tended to be referred to as “that bunch of bloody cowboys” more often than not.

Now though, regardless of what we choose to call them, it looks like the days of the small VAR may be numbered. Back then I used to install networks, pulling and terminating cable, and installing NetWare on the oversize PCs that we rather generously referred to as servers.  Not that this kind of work really mattered though, most of the real money came from break fix work. Exploiting the poor reliability of PCs and the users’ infallible ability to break things to charge premium prices for simple work. Suffice to say, this kind of work wasn’t for me and I moved on to other things.

I wasn’t done with VARs though, a decade or so later I found myself working for another VAR. A real one this time offering genuine added value, but it still relied on break fix activities for a significant part of its revenue.  The only real change here was that in the intervening time PC hardware had become significantly more reliable, while at the same time software complexity had increased exponentially and engineers carried software tools rather than screwdrivers and spare parts.  If anything, this was good for the VAR, customers tend to understand things like screwdrivers and the mystique of seeing a PC with the lid off for the first time quickly tarnished to become “I’m paying how much for something a trained monkey could do?”

A good Windows engineer with sharp suit, fast car (the Ford Escort RS Cosworth was a popular choice), and a handful of 3 1/2″ discs, could quickly throw up enough command prompts and brightly colored scrolling displays to convince even the most guarded CFO that value for money was being provided.  Now, after nearly 30 years of being on the receiving end of expensive, and too often unreliable service, it looks like small business owners will finally be getting access to the same type of services that is available in the largest of enterprises, and with luck, may well find themselves at the head of the queue for the delivery of  the next generation of low-cost high-value desktops rather than languishing  once again at the back.

So what could have changed; how can desktop virtualization put the small business desktop at the front of the queue for once?

The first wave of desktop virtualization products to rise to prominence were based on what is now know as server hosted virtual desktops (what some people still persist in calling VDI). Client hosted virtual desktop solutions and hybrid solutions that  provide desktop virtualization management without a hypervisor followed shortly after*.  2010 saw the introduction of desktop as a service (DaaS) offerings with multiple cloud service providers including IBMRackSpaceand Verizon introducing standard off the shelf solutions delivering desktops on demand   At the same time vendors of  client hosted virtual desktop solutions have stepped in to the frame and released in service provider editions of their products offering multi-tenancy support and improved scalability appropriate for service provider needs.

Of all these options, a client hosted desktop virtualization solution (either with or without hypervisor), administered by a managed service provider is the one that creates the best new opportunity for most small businesses.

A client hosted virtual desktop eliminates the need for any dedicated server infrastructure to support implementation. It also avoids the need for the high-bandwidth high-availability WAN connections needed by desktop as a service (DaaS) offerings.  At the same time, service provider maintained solutions have useful advantages for smaller organizations. Many smaller businesses cannot afford full-time IT support staff and instead must work with a VAR.  This is expensive for the customer  and  both limiting and inefficient for the VAR. Dispatching highly skilled resources that are in short supply to a customers site for routine activities lose expensive from customers perspective and does little to develop the VARs business.  Adopting a service provider model means that the VAR can spread its staff across a larger customer pool than was ever possible when providing an exclusively on-site service.  I’m reluctant to to coin a new acronym, however this is not DaaS, but Desktop Management as a Service and DMaaS could be what brings small business IT up to the same level as enterprise IT, without having to slog through the many incremental improvements that enterprise IT has had to fight through in the last 20 years.

Last week I interviewed senior executives at Point of Care SolutionsRSPEED, and Seasquall; three companies who have seen the writing on the wall and are either setting up new businesses or transforming their existing organizations from being VARs and into DMaaS  providers specifically targeting targeting the small to mid-size business. I don’t usually provide much coverage of this market – most innovation is targeted at the the large enterprise – but it’s important not to ignore the midsize and small business market.

Midsize and small businesses make up 90% of all businesses employee 90% of the world’s workforce and deliver 65% of the global GDP. Just as Amazon succeeded in developing a sales platform that could sell to the long tail of the demand curve, so these companies and those that follow them can through the use of DaaS and DMaaS access the long tail of small businesses that’s have not until now been able to obtain high-quality low-cost desktop management services.

Of the three, Point of Care Solutions (PoCS) interests me most. While RSPEED and Seasquall deliver services to a broad mix of small and mid-size businesses. PoCS’ focus is exclusively on primary care providers; working exclusively with physicians practices that understand the value of IT, but who are not large enough to be able to afford  full-time IT support staff to maintain their infrastructure.  Say what you like about President Obama’s plans for the US healthcare system, the fact of the matter is that electronic health records play a major role in delivering high quality health care across the board.  The challenge that the provision of this technology imposes is how to do so affordably, how to increase the quality of the IT infrastructure in physicians practices to the level needed to provide reliable healthcare IT services.

The introduction of electronic medical records creates a significant change in the way that IT needs to be delivered in physicians offices.  In the past continuous availability was given little consideration, and significant variations in device configuration were not given a second thought.  Now the failure of an individual workstation, can significantly disrupt operations, and in some cases even minor configuration discrepancies can result in inconsistent application performance which can directly impact patient care. By delivering a simple fixed price solution without the inherent complexity of  conventional DaaS  services, PoCS  is providing the opportunity for physician practices to obtain the same managed desktop environment as can be achieved in the largest healthcare network. This is important stuff, and provides a wonderful example of how technology can significantly change people’s lives for the better.

All three companies use MokaFive Suite Service Provider Edition as their desktop management platform. PoCs’ approach is to offer a standard managed desktop environment and make it available to all of its customers. RSPEED and Seasquall take a different approach, using MokaFive to enable them to take existing businesses activities  and transform them into flexible services that existing and hopefully new customers can subscribe to. Coincidentally, this approach also provides an attractive solution to the problem I posed in my last post on BYOD.

Organizations looking to provide endpoint management services across devices that they do not own should take the lead from companies like Point of Care Solutions and consider the merits of working with specialist endpoint management service providers to control the configuration settings without having to take on end to end responsibility for all aspects of endpoints configuration.

At the same time as speaking to Point of Care Solutions, RSPEED and Seasquall, I also heard from a number of VARs who viewed the prospect of their customers moving away from their current desktop services model with nothing short of horror.  Not out of any real concern that the technology behind these services was not up for the job, but exclusively because of their fear that it would impact their own livelihoods.

I believe that they are right to be concerned.  Just as SaaS is shrinking the software channel, and e-commerce is shrinking the hardware channel, so DMaaS will further erode the VARs remaining links to its customer base. The days of the old-style VAR are numbered and unless these businesses invest in training necessary to implement their own managed service offerings they will go the way of the dinosaurs.  The only good news I can offer them is that unlike the dinosaurs they can see this change coming and have the ability to adapt to and profit from this new environment.

*  The VMware Workstation virtual machine monitor and VMware ACE virtual machine management platform preceded the availability of  products focusing specifically managing desktop operating systems.

Simon Bramfitt is a technology analyst.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s