1. Develop a special purpose PMO as a strategic driver for the cloud
2. Build a cloud team from IT operations, application teams, and engineering–make someone responsible as the leader of the team.
3. Determine who owns the budget for the cloud.

It’s also always important to keep in mind that “The Cloud” is not a destination.

• Partnering is key to success
• Desktop virtualization is business driven, not technology driven like server virtualization
• VDI (virtual desktop infrastructure) is not the only solution and, in fact, may likely end up only being deployed for corner use cases. Notice that VDI was not even mentioned in the press release.
• Desktop virtualization is lead by executive IT advocates

Also notice the technology partners in this deal: EMC, Citrix, Microsoft, and Appsense.

• Interesting dynamic with EMC considering all the work with VMware and Cisco building Vblocks for VDI
• Citrix is a rare example of a company that has been able to successfully dance with Microsoft for years.
• Appsense delivers solutions for personality management. Nice work, Appsense.
• And, of course, Fujitsu delivering the services and hardware at the endpoint rounds out the solution.

The fact that Fujitsu won over  HP/EDS in this deal produces some more questions:

• HP has thin clients and partners with Citrix/ Microsoft. I wonder if they tried to pitch VMware View and lost the deal?
• Is HP/ EDS in position to capture deals that bring together a variety of technology partners?

F5 recently announced the availability of a free trial version of its new virtual appliance, the BIG-IP Local Traffic Manager (LTM) Virtual Edition (VE). Now the value that F5 is providing in the physical world can translate into the virtual world. IT operations can work with application owners and build confidence in migrating mission critical and business critical applications to the virtual platform.

Looking Ahead: Virtualization (at all tiers) is a key component of data center design, thus the driving force to deliver software-only versions (virtual appliance) of what is available in the physical environment. Virtual appliances streamline test and POC, are a valuable delivery vehicle for an ISV, and quickly enable IT operations to build further value.

Also consider what happens when IT starts to leverage third party capacity (compute, storage, and network). The applications still require the same levels of availability, guaranteed service, and performance. As technology improvements federate across data centers (owned or leased), the virtual appliance is an ideal way to maintain the same architecture that was originally designed in deployed. Wow! I said all that and didn’t even use the word “cloud”

In comes Virsto. Virsto One is initially compatible with Microsoft Hyper-V environments to solve the exact dilemma VMware solved with VMFS. Mixed I/O workloads are becoming more and more common as administrators look to drive up relatively low consolidation ratios–5:1 on average, according to recent ESG research. As companies target the virtualization platform for business- and mission-critical workloads, performance, maximum utilization, and ease of management quickly become top priorities. Virsto extends the value of server virtualization by virtualizing the storage as well–the value of virtualization is extended into the underlying storage infrastructure and IT can plan to scale with confidence.

Virsto has some company: companies like Sanbolic and Microsoft Cluster Shared Volumes are looking to improve the reliability, agility, and manageability of virtualized environments. As storage management, capacity utilization, and efficiency remain top priorities, it will be interesting to watch each of these solutions mature in a market that offers ample opportunity for growth.

VDI may be the right fit for certain scenarios, but successful desktop virtualization implementations view VDI as one of many deployment models.

There are three main drivers of desktop virtualization:

• Security
• Cost optimization - Support/management reduction
• Improved user experience

A few things to remember: you can’t just buy desktop virtualization. It requires multiple components that are oftentimes assembled from multiple vendors and they must all work together. Concerns about desktop virtualization mostly center on not disrupting users’ routines, application latency, printing, and stability. The challenge is bolting all the pieces together while meeting the needs of the end-user.

Most importantly, business objectives outweigh any concerns over increased data center infrastructure costs.  Sophisticated ROI analysis is rare. Desktop virtualization is being deployed because “I didn’t have to build a new data center” or “Billable hours increased.” These are real business drivers driven by CIO and senior IT management as shown in the below figure.

OS upgrades are cumbersome and costly. In most cases, Windows 7 upgrades from XP require a clean install. So what drives companies to perform operating system upgrades on the endpoint?

• Hardware refresh cycles
• Improved Security
• Performance enhancements/improved stability
• Discontinued OS support
• Simplified management

What if I told you that you could extend hardware refresh cycles, tighten security, improve performance, and simplify management WITHOUT having to upgrade the OS. You CAN! These are the exact reasons we see organizations deploy desktop virtualization. So what’s the rush to move to Windows 7? Microsoft will discontinue Windows XP sales after June 30, 2010 and will offer technical support for Windows XP with updates and security patches for an extended period until April 2014.

So, stick with the OS you have today, dig into desktop virtualization to see how it can align with your long term goals, make sure application virtualization is included in your plan, consider BYOPC (Bring Your Own PC), and start targeting your initial end-users.

Why is desktop virtualization penetrating the health care industry?

• Mobility of workforce
• Security requirements driven by regulations
• Simplified access to multiple systems without being tethered to a device
• Improved patient care

Thus far, VMware is picking up its market share in health care desktop virtualization, but ESG knows that Citrix and Microsoft are ramping up efforts to jump into the medical field as well.

You’d think VMware would be all over the health care vertical but ESG does not believe that this is the case.  Rather, VMware sells horizontally where reps own territories and not industries.  Rumor has it that VMware has a handful of health care-focused people in marketing but no formal vertical market strategy or programs here.

Note to VMware, time is ticking away and certainly Microsoft and Citrix have lots of resources and established programs for vertical marketing.  In my opinion, VMware should be hiring health care specialists, establishing health care technology partners, and building a health care-focused sales force as soon as possible.

If VMware takes these steps, it could lock up the health care market as the battle brews.  If it relies on its technology alone, it will likely get rolled over by health care-experts, Microsoft and Citrix within the next few years.

How and why could you use the solution?

Live data center migration. Virtualize first then live migrate the VM to a new data center. This is a new trend we see with migrating X86 workloads to a new data center as part of a larger IT consolidation initiative. For applications that require maximum uptime and are part of the migration long distance, live migration is valuable. Note: Web applications are a primary target for today’s solution.

Follow the sun/ moon. With the globalization of the workforce, long distance VMotion could help move applications closer to the user 24 hours a day. This scenario will come into play with desktop virtualization.

Disaster recovery. Typical DR solutions in a virtualized environment today will experience application outage. Campus type environments, such as a medical centers, could leverage long distance VMotion to enable any of a number of data centers on a campus to assume a primary role at any point.

Also think about how this could be leveraged with a third party capacity provider: IaaS (Infrastructure as a Service). Cloud service providers should start to look at this type of technology to help overcome the availability contention as IT organizations weigh their options to adopt cloud computing services.

Also look for Windows 7 to act as a catalyst for the desktop virtualization market. ESG premium content subscribers can access ESG Research Brief: Windows 7 Takes Off directly–or I bet I can get you a PDF copy if you ask nicely.