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Early in 2006, Forrester Research Inc. analysts said that the desktop virtualization technology of the day was “the future of the corporate PC.” In August of the following year, Gartner Inc. predicted that by the end of 2010, “all new PC deployments will be virtualized.”
In 2009, those predictions seem far from coming true.
Even established providers of virtualization software say desktop adoption is only at 5 percent and not likely to grow quickly. But in San Francisco, before participants gather for VMWorld on Monday, the biggest virtualization conference of the year, two Boston-area software companies will be talking up products launched this year. Waltham-based Viewfinity Inc. and Westford-based Virtual Computer Inc. are both making the case that desktop virtualization can turn around a fast return on investment.
Forrester analyst Natalie Lambert expressed skepticism. “The reason why it hasn’t taken off is its cost,” she said. “Hosted desktop virtualization is more expensive than anybody has accounted for.”
Early adopters have been in highly regulated industries like health care and finance, where desktop virtualization has provided data security that mitigates the risks of mobile computing, she said. It has the potential to change the way companies think about personal computing on a broad scale, but that won’t likely happen until 2012, she said.
Viewfinity, in stealth mode until now, quietly launched its first product last month. It formed in 2007 as a new project by XOsoft Inc. co-founders Dmitry Barboi and Leonid Shtilman. The technology is a management tool that works with virtualization software layers, called hypervisors, provisioning persistent desktops and providing single-image management of applications through an agent that enables system administrators to do rules-based provisioning without letting desktop images proliferate, said president and co-founder Gil Rapaport, also a former XOsoft executive.
Last January, the company took in $5 million in a Series A investment from Chicago-based JK&B Capital and Israel-based Giza Venture Capital.
Just a step ahead of Viewfinity on the startup timeline, Virtual Computer in March launched its own hypervisor layer, which leaves virtualized application images on a user’s desktop, rather than storing them on a server. That saves customers on administration and data storage, and enables mobile users to work offline — a feature other virtualization providers are still developing, according to director of product management Doug Lane, a founding employee who came over with McCall from managed security services provider Guardent in Waltham.
And a third company, New Jersey-based Neocleus Ltd., said this week it was moving its headquarters to Cambridge and hired a new CEO: Les Yetton, a former executive at Chelmsford-based Desktone Inc. and then Boston-based desktop virtualization software maker Softricity Inc. Neocleus makes a bare-metal desktop hypervisor designed to provide improved security and efficiency for desktop virtualization.
At VMWorld, Virtual Computer will announce integration with Microsoft Corp.’s (Nasdaq: MSFT) server virtualization hypervisor, Hyper-V, which ships standard with Windows Server 2008, further lowering adoption cost, Lane said.
Fresh out of stealth mode, Viewfinity is taking a lower profile at the conference. Executives will meet with system integrators, other technology vendors, and analysts, a spokeswoman said. The companies will be there with established competitors such as Citrix Systems Inc. (Nasdaq: CTXS) and VMWare Inc. (NYSE: VMW), which runs VMWorld. Those two companies have made their own moves toward realizing desktop virtualization’s potential.
In 2007, Citrix acquired XenSource Inc. for $500 million, entering the desktop virtualization market with a product the company now says can match many of Virtual Computer’s purported advantages. The XenDesktop product allows administrators to manage thousands of desktops from a single image, and doesn’t limit end users to non-persistent desktops, or thin clients that can’t handle USB devices or application plug-ins.
Virtual Computer’s delegates to VMWorld will likely be paying special attention to Citrix’s moves. Earlier this year, Citrix joined existing investors Highland Capital Partners and Flybridge Capital Partners in a $15 million Series B investment for the company, which brought Virtual Computer’s total funding to $21 million.
New England has developed a healthy cluster around destkop virtualization technology – a cluster that’s grown by two companies in the past week, as Neocleus relocated here, and Viewfinity came out of stealth mode. Here’s our stab at a comprehensive list. Did we miss one? Let us know: newsroom@masshightech.com.
Ardence Inc.
Waltham
Formerly VenturCom; switched to virtualization software in 2005; acquisition by Citrix Systems Inc. announced in 2006.
Desktone Inc.
Chelmsford
Founded 2006; backed by Highland Capital Partners, SoftBank Capital, Citrix Systems Inc. and Tangee International
InstallFree Inc.
Stamford, CT
Founded 2006; backed by Ignition Partners, Trilogy Equity Partners
Neocleus
Cambridge
Founded 2006 in New Jersey; relocated headquarters to Cambridge this August; backed by Battery Ventures and Gemini Israel Funds
Softricity Inc.
Boston
Acquired 2006 by Microsoft Corp. for undisclosed terms
Unidesk Corp.
Marlborough
Founded 2007; backed by Matrix Partners and North Bridge Venture Partners
Viewfinity Inc.
Waltham
Founded 2007; backed by JK&B Capital and Giza Venture Capital
Virtual Computer Inc.
Westford
Founded 2007; backed by Citrix Systems Inc., Flybridge Capital Partners and Highland Capital Partners
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