Yesterday VMware announced its financial results for the Q2 2010. During the earnings call, the company’s executives briefly commented on the market adoption of VDI and the forecast for the near future.
VMware continues to be surprisingly skeptic about the imminent adoption of VDI as a mainstream technology. And while it’s evident that most companies are not yet sold to the idea of client virtualization, this still is a radical change in the message that the delivered in the last couple of years.
In the Q1 2010 earnings call To Nielsen, COO, said:
Exactly when this market is going to tip though we don’t know. We were saying – engaged and focused on it, but I couldn’t tell you if its going to be at the end of the year or next year or exactly when that’s going to be but our eyes are certainly on the ball and we are going to make sure that when it does tip, we are there to take advantage of it.
In this call, three months later, he reiterated:
We continue to hold high expectations for the desktop virtualization market, yet it remains difficult to predict at what pace customer interest and evaluations will turn into accelerated buying. We are seeing Windows 7 upgrades, and the proliferation of new end-user devices such as the iPad and Smart phones are fueling public discussion and customer interest. However, no single technical or economic tipping point is emerging as the accelerant to VDI adoption.
During the Q&A part of the call, Nielsen added more details:
We’ve in some quarters had as much as 60% of our proof of concept resource focused on desktop and desktop virtualization. With Windows 7 and those sorts of rollouts and upgrades on the horizon there’s definitely a strong interest as many customers are saying if they’re going to make the upgrade to Windows 7 they’re going to make a transformative change like a desktop virtualization effort as well. So I’m a little bit cautious to declare 2011 the Year of the Desktop since for the last few years it’s been declared the Year of the Desktop, but we are optimistic for the opportunity.
That said, as I mentioned in my prepared comments, we are seeing a change or a slight mindset shift where people are starting to look beyond just VDI and consider how they’re going to deal with the proliferation of devices that are out there. And a theme we’re hearing from customers is “Help me manage users and then the devices will take care of themselves.” And so we’re thinking through our strategy and we’ll be rolling out our direction and vision about how we’re going to address this opportunity and the chance to meet these needs.
When pressed about when the VDI will become mature, VMware’s CFO Mark Peak dodged the question:
Question from Wedbush
I mean when do you expect the VDI to be material – do you think Q4 or 2011?
Answer from Mark Peek
That’s hard to say, particularly because the steam and the momentum we have with vSphere. But the desktop wins we’re getting are developing… I know there was a number of customers in Q2 that purchased and are in the early phases of their deployments, and as they roll them out it’s only a matter of time before it kicks in to the additional licenses and we see that impact.
Considering the VMware’s leadership position, the customers are certainly listening. And maybe the company is absolutely right about the VDI adoption rate.
But it’s worth to remember that it has a strong competitor in the desktop virtualization market: Citrix. And Citrix seems able to deliver faster than VMware on the offline VDI front.
By radically changing the message about the VDI market maturity, VMware is buying itself some more time to develop its Client Virtualization Platform (CVP), assuming there’s still a plan for it.
Indeed, CVP may be indefinitely postponed, as the VMware’s CEO Paul Maritz suggests answering a direct question about the announced client hypervisor:
…We are providing client-side, big client-side functionality with our offline View capability which comes as part of 4.5. The feedback that we got from our customers is the market’s not ready yet for a bare metal, naked hypervisor, and instead we are supplying essentially a Windows within Windows hypervisor which gives us much better coverage over the installed base in particular. The challenge with the bare metal hypervisor is how do you address the installed base? So we made that change based on customer feedback…