In less than a month, on Jan. 14, approximately one in four PC’s operating systems will become obsolete and, without an expensive extended support contract (opens in new tab), ticking security time bombs. Some CIOs will use the end of included support for Windows 7 (opens in new tab) to propose a new way to equip employees with the compute resources they need: Cloud-hosted virtual desktops as a service, potentially running on devices where the costs of asset procurement and comprehensive day-to-day support are bundled into a monthly subscription.
Should CFOs support this concept?
It depends on factors including your preference for a capex versus opex approach to managing IT assets, how often your company upgrades employees’ computers, the complexity of your software stack and whether workers are always connected to the internet. Increasingly, it also matters if you’re in a business with remote offices and/or a variable, distributed workforce subject to seasonal spikes.
We’ll look at cloud desktop as a service and device as a service options separately. But first, what’s driving the current focus on bringing software and hardware up-to-date?
In a word, security.
While 65% of PCs now start up with Windows 10, 27% were still running Windows 7 as of Nov. 30, according to Statcounter (opens in new tab), which uses website telemetry to track operating system and browser usage worldwide. Security firm Kaspersky reported that (opens in new tab) 38% of small businesses have Win7 PCs in service. In some cases, IT needs to support applications that are incompatible with Windows 10. Many teams want to continue to use hardware that won’t run the more-demanding Win10, while others are simply unaware that they have soon-to-be outdated devices lurking in the network. And of course, operating system updates are expensive and time-consuming, with requirements to retrain end users.
After Jan. 14, companies with devices running Windows 7 have a major problem. Because Microsoft will no longer issue free, automatic updates or patches, these PCs will become targets for attackers, not to mention a compliance nightmare. Your cyber-security insurance policy may even have an exclusion (opens in new tab) if Windows 7 devices are on your network.
Your choices if IT must run hardware or applications that won’t support Windows 10: Pay Microsoft a significant monthly fee to ensure these systems are patched — or roll the dice while IT figures out a longer-term fix.
Neither is particularly attractive. Fortunately, unlike six years ago when Microsoft ended support for Windows XP (opens in new tab), businesses have new as-as-service options.
The majority will continue the tried-and-true approach of replacing aging PCs while updating systems able to run Windows 10. But our take is that as-a-service options are worth pricing out. When looking at hard costs, be sure to take into consideration potential savings realized by offloading the work of managing and securing the end user computing environment. IT is freed up to work on projects more core to your business, and employees will likely enjoy a more flexible and productive workplace.
Let’s look at desktops, then devices.
Cloud-based desktops make sense if your company encourages a modern, flexible environment. Employees may work on any device, even those that they own, without loss of control over access and data.
Here’s how it works: Instead of licensing software for each worker, and potentially for more than one device per user, the desktop — including operating system, applications and data storage — is hosted in the cloud and paid for as an operational expense.
Employees can log in to their cloud-based desktops from any PC or Mac, or from devices including iPads, Android tablets and a host of other hardware. Instead of paying per-seat license fees for Windows and the applications employees use, you pay for the number of user logins in a given month, with prices starting as low as $10 for a bare-bones Windows virtual desktop (opens in new tab) delivered via a web browser or mobile app.
For IT teams, because everything is in the cloud, the benefits boil down to simpler management, improved security and easier replacement of outdated or lost devices.
“Being able to run a full Windows 10 experience in a multiuser environment is literally the holy grail for admins,” said Scott Manchester, a lead product manager at Microsoft, at a recent gathering of customers and partners. “We’re seeing amazing adoption with all the different operating systems we support.”
Besides Windows, that list currently includes Android, Mac OS, iOS and HTML 5, meaning most applications for the majority of devices used within your company can be paid for in an as-a-service model.
This is not circa-2010 virtual desktop infrastructure, which some companies tried and abandoned as an alternative to PCs for mainstream environments, in the face of end user resistance and much higher than expected costs (opens in new tab). With VDI, PCs were connected to server and storage infrastructure in your own data center or computer closet. In contrast, today’s cloud-hosted desktops are streamed over the internet or a dedicated connection using special encoding and optimization protocols that ensure a good experience.
But don’t buy a pitch that desktops as a service will definitely save money, even with the soft benefits we discussed above. In fact, it could cost more depending on the service provider, number of users and capabilities provided. Variables that may push up the price include how much data each employee needs to store, what performance levels you need and whether you purchase a wide range of add-ons.
In addition, most companies will need to engage a consultant, at least initially. There is still a good bit of complexity inherent in provisioning and managing cloud-based desktops. Indeed, Microsoft’s pricing is confusing — some would argue opaque.
Donna Ryan, a principal Microsoft consulting engineer for IT service provider CDW, debunked in a recent blog post (opens in new tab) the notion that businesses should look to virtual desktops for pure cost savings, pointing out that there are technical hurdles and that IT must still monitor resource consumption and actively scale up and down as needs change.
As with any on-demand cloud resource, costs could rise quickly without controls.
Still, this model is on the rise, according to Gartner (opens in new tab), driven largely by Microsoft’s release earlier this year of its Windows Virtual Desktop (opens in new tab) service. WVD delivers an enhanced remote virtual desktop workspace and is available with multiuser support, which should reduce costs and management complexity for businesses where multiple employees use the same device, perhaps in different shifts.
Manchester says that 90% of WVD customers are choosing Windows 10 multiuser. Coca-Cola Beverages Florida (opens in new tab), a family-owned bottling company, is using WVD to equip frontline manufacturing workers and sales reps with a consistent and secure desktop on a variety of devices.
CFOs accustomed to shelling out chunks of cash for Windows licenses won’t be surprised to learn that Microsoft is embracing cloud desktops in a big way, given the technology’s ability to extend use of its operating system beyond PCs and the fact that it’s hosted in Azure.
There are other options for cloud DaaS. Oracle is working with Citrix (opens in new tab) to host desktops on Oracle Cloud (opens in new tab), while Igel is one of many ecosystem providers whose desktop virtualization software, hardware and services can run on WVD as well as other cloud platforms, including Amazon Workspace (opens in new tab) and VMware Horizon (opens in new tab).
Microsoft, however, is retaining exclusive rights to offer multiuser Windows licenses.
Note that businesses with Microsoft enterprise licensing agreements or Microsoft 365 subscriptions automatically have WVD use rights. In other words, you may already be paying for it.
And, moving to WVD is the only way businesses can continue to receive free support for Windows 7, at least for three years after the Jan. 14 deadline.
“That’s definitely another benefit that people are interested in,” said Ray Jaksic, chief strategy officer at Coretek Services (opens in new tab), a technology professional services firm. Jaksic says that while companies not investigating cloud-based desktops aren’t yet behind the curve competitively, he’s seen an uptick in proof-of-concept evaluations.
Kayla Kirkeby, VP of marketing at Dizzion (opens in new tab), a service provider that runs its own cloud desktop and virtual app service based on VMware’s Horizon platform, says that while organizations have been considering cloud desktops for several years, the Windows 7 deadline has sparked accelerated interest.
“It has been top-of-mind for people over the last six to nine months, and it’s been pretty steady,” said Kirkeby.
The other side of the “DaaS” acronym coin is device as a service, a relatively new way (opens in new tab) to acquire the PCs, tablets and smartphones that your company might typically purchase or lease. In an as-a-service subscription model, you’d acquire devices from manufacturers, like Dell, HP and Lenovo, or through service providers, including CDW and Office Depot subsidiary CompuCom, which launched a DaaS service for PCs, tablets and smartphones nearly two years ago.
Earlier this year CompuCom partnered with Apple to offer extended device-as-a-service capabilities for Macs, iPads and iPhones.
The device as a service model has some of the attributes of a lease, but a few key differences. For one, service provider Solvix points out (opens in new tab) that buyouts are prohibited to keep its program compliant with FASB standards and avoid some of the new accounting rules around leases.
Another difference is that your monthly subscription payment includes services, like initial setup, ongoing technical support, patching and fleet management. Lenovo, for example, will bundle in (opens in new tab) Web and email monitoring, managed anti-virus and Office 365. At the end of the term, the provider takes the device back and erases all data.
Like use of cloud-based desktops, pickup of hardware subscriptions hasn’t happened as quickly as providers and analysts expected.
“DaaS has been slower to take hold in certain segments than originally thought,” said Janet Schijns, CEO of JS Group (opens in new tab) and a Brainyard channel adviser, who was executive vice president and chief services and solution officer at CompuCom parent Office Depot until January of this year.
Changes in carrier policies as well as rapidly evolving use cases, says Schijns. Many of the multiple tablets, phones and PCs your employees use are equipped with wireless LTE connectivity, and those contracts often come with subsidies from carriers, making ownership easier on the wallet. Still, she says that device subscriptions can benefit many companies.
“CFOs should carefully consider if DaaS can improve their ability to support a broader range of devices, extend use and protect data while also holding costs down,” she said. “While ‘everything as a service’ is certainly the trend, it only makes sense if it extends your use.”
And, don’t let providers conflate device as a service and leasing, which is complex and restrictive at a time when organizations are seeking greater flexibility.
“A lease means you’re signing a contract for a time period and then have the liability, where this is just a monthly operating expense,” Jaksic said.
That single, inclusive monthly contract is appealing to CIOs and provides CFOs with cost predictability. If you’re considering this option, ensure you can get detailed reporting from the provider that allows costs to be allocated to specific business units or projects and that the IT team fully understands what is and is not included. Also look at what your options are for lost or stolen devices.
While device as a service and cloud desktops are distinct services and can be sourced together, they are not mutually exclusive.
We recommend CFOs evaluate each service separately, particularly if there’s no immediate need to replace employee hardware. Operationalizing of costs is likely to be a secondary consideration to how your chosen strategy will affect IT resources and user learning curves.
CFOs should discuss a few key topics with their counterparts in IT.
Employees who are not always connected to a network or need specialized or demanding applications, such as CAD, are unlikely to do well with cloud desktops.
For example, Jaksic described a healthcare client with more than 100,000 desktops running roughly 10,000 applications, of which more than 3,000 are unique.
“When you have that many thousands of applications, and you’re embedding those inside of virtual desktops, you lose the benefits of management,” he said.
If you’re unsure, push for a pilot test and phased rollout.
“This is not an all-or-nothing proposition,” says Jo Peterson (opens in new tab), VP of cloud services at boutique technology sourcing provider Clarify360 (opens in new tab) and a Brainyard cloud adviser. “There could be portions of your workforce where it fits.”
Peterson suggests phasing in device subscriptions as part of your refresh cycle, which in most organizations ranges between three and five years. A company with a five-year refresh cycle replaces 20% of its employees’ PCs each year, making for a gradual and controlled rollout.
However, many CFOs still prefer the traditional model, Peterson said, despite the service upside for CIOs.
“If you like to depreciate assets, a desktop-as-a-service model probably isn’t a good fit for your business,” she said.
Jeff Schwartz (opens in new tab) is Brainyard editor-at-large, covering technology and trends across different industry sectors. He has covered all aspects of technology and its impact on business for three decades as an editor and writer for a wide range of publications. Currently he’s a freelance writer. In addition to Brainyard, he contributes to Channel Futures and SD Times, among others.