VMware Acquires DaaS Provider Desktone, Bulks Up End-User Computing Portfolio

VMware jumped into the desktop-as-a-service market Tuesday by acquiring Desktone, a hosted virtual desktop vendor that is also one of its longtime partners.

Desktone, Lexington, Mass., is focused mainly on service providers and touts its DaaS architecture as multitenant and fully compliant with Microsoft's licensing rules for virtual desktops.

As it happens, having both of these is not easy to pull off. Microsoft only allows hosting partners to sell virtual Windows 7 desktops if the end customer already owns the licenses. Microsoft also prohibits hosters from delivering DaaS to customers on shared hardware, which cancels out the cost efficiencies of cloud infrastructure.

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Desktone has been navigating Microsoft's licensing rules since its founding in 2007, and now it belongs to one of Microsoft's biggest enterprise rivals.

Desktone "is the epitome of cutting edge innovation and can rightly boast of having an advanced multi-tenant desktop virtualization platform for delivering Windows desktops and applications as a cloud service," Sanjay Poonen, executive vice president and general manager of VMware's End-User Computing unit, said in a blog post Tuesday.

The combination of Desktone's DaaS assets and VMware's Horizon View desktop virtualization software "will significantly accelerate VMware's DaaS strategy," Poonen said in the blog post, without elaborating the role that View will play.

Desktone's base of around 40 service provider partners, combined with VMware's 11,000-plus service providers, will help VMware build its DaaS business "much faster than many of our competitors," Poonen said in the blog post.

End-user computing is one of the three growth areas VMware has identified, along with software-defined data center and hybrid cloud, as future pillars of its business. Desktone's "entire team is moving over to VMware's End User Computing (EUC) group," CEO Peter McKay said in a blog post.

Desktone runs its platform on grid architecture and delivers desktops and apps from its own data centers. Last December, it added an application delivery service that provides access to Windows enterprise apps on mobile devices.

VMware announced plans to enter the DaaS space at VMworld in September, generating a fair bit of buzz in the process. But, it soon emerged that VMware wouldn't be using its own desktop virtualization software (Horizon View) to deliver DaaS, but the existing Desktone DaaS offering. Virtualization guru Brian Madden wasn't impressed, calling the service more "marketing partnership" than product.

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Microsoft hosting partners can sell Windows and Office-as-a-service through Microsoft's Service Provider License Agreement (SPLA) using Windows Server and Remote Desktop Services (RDS). But, Microsoft doesn't have a SPLA for Windows 7, and some feel that has put a crimp in the lower end of the DaaS market.

"Without new terms, Microsoft requires dedicated hardware per customer, so it's hard to envision how Desktone will mesh nicely with vCloud Hybrid Service," Blaine Kahle, director of engineering at Five Nines Technology Group, a Lincoln, Neb.-based VMware partner, told CRN.

VMware actually closed its Desktone acquisition earlier this month but isn't saying how much it paid. In a Tuesday press release, VMware said it expects the deal "to be immaterial" to its fiscal third quarter results, which it will announce Oct. 21.

At VMworld in Barcelona on Tuesday, VMware is showing off updates to its End-User Computing portfolio, including Horizon View 5.3, which features improved multimedia rendering and video playback, as well as support for iOS 7 and Windows 8.1 devices.

vCenter Operations Manager for View is now being bundled into Horizon View, Courtney Burry, director of product marketing in VMware's End-User Computing unit, said in an interview.

"Any customer that wants to leverage VCOM to troubleshoot and monitor View environments can do so now for no extra cost," Burry said.

VMware is also showing off its vSAN public beta for desktop workloads. vSAN is a new storage feature that pools together storage capacity from Flash and solid state drives and lets it function as a virtual storage area network.

The idea behind vSAN is to make setting policies for how storage is allocated as easily as setting up a virtual machine, and it's a key part of VMware's "software-defined data center" vision.

"Now you can assign a single cluster across your workloads. This will allow us to drive down the costs and automate provisioning for users through View," said Burry.