Cisco s Virtual Experience Infrastructure to Diversify UC Deployment Options
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1 Intelligence Report: Report Date: November 15, 2010 Cisco s Virtual Experience Infrastructure to Diversify UC Deployment Options Analyst: Service: Market: Riggs, Brian Hot Topics, Business Technology and Software Unified Communications & Collaboration, Unified Communications and Contact Center Quick Take Competitive Positives Complementary to Cisco s server virtualization offering More comprehensive VDI offering than competitors Cisco develops own zero-client hardware Cisco is ahead of most rivals with VDI offering Same VDI and server virtualization partner Competitive Concerns Mitel beat Cisco with VDI option for UC offering VDI not widely deployed among enterprises Cisco lacks traditional thin client hardware Cisco only now entering a market where HP has a major presence Cisco VDI solution unlikely to support market-leading HP thin clients General availability in H Event Summary November 15, 2010 Cisco announced Virtualization Experience Infrastructure (VXI), a comprehensive desktop virtualization system for its UC and collaboration solutions. The system includes two zero client devices that can serve alternatives to traditional desktop PCs, and can work with third-party thin client hardware as well. The
2 Cisco zero client devices are expected to cost less than $500, with availability set for H Analytical Summary Perspective Positive on Cisco s Virtual Experience Infrastructure, because desktop virtualization solutions, though not widely deployed at present, promises to grow in importance as an alternative means of delivering client and application software to end users. With developers of virtual desktop infrastructure (VDI) beginning to introduce software capable of supporting real-time communications traffic, VDI is likely to take an increasingly important role in UC solution deployments. Vendor Importance Moderate to Cisco, because the company has a large and growing set of communications and collaboration software that can directly support and therefore benefit from a VDI deployment option. The company will be able to highlight new and upcoming products, such as the 8900 and 9900 Series IP phones and the Cius communications tablet, as components of its larger VDI solution. Market Impact Moderate on the market for unified communications solutions, because Cisco customers and channel partners will be able to extend current VDI initiatives to their deployment of communications, collaboration and contact center software. Competitive Strengths Competitive Positives Cisco Virtual Experience Infrastructure (VXI) complements work the company has done in the area of server virtualization. Expanding UC software virtualization options to desktop client software will allow Cisco to provide its customers with access to realize much the same kinds of simplified management and lower TCO benefits that are currently available to them when purchasing and deploying server software from Cisco. (For more on Cisco s server virtualization strategy please see UC System 8.0 Makes Strides into Virtualization and Session Management, November 12, 2009, and Customer Demand Drives Innovation in Communications Software Virtualization, April 5, 2010.) Cisco s desktop virtualization for UC offering is more comprehensive than rival offerings. It not only supports VMware View, but also Citrix XenDesktop. It not only supports UC clients accessible via desktop systems, but mobile clients as well. And it supports multiple thin client hardware platforms, including Wyse (which together with HP controls about 70% of the thin client market), Devon IT and IGEL Technology. This should provide customers with a considerable amount of choice when it comes to how they plan to implement desktop virtualization in conjunction with their UC solutions. By introducing its own zero-client devices (i.e., thin client hardware not running a full operating system) Cisco will be able to distinguish itself from UC rivals that will almost certainly introduce desktop virtualization solutions of their own. Cisco zero-client devices include an add-on unit that snaps to the back of 8900 and 9900 Series IP phones (VXC 2100) and a standalone unit (VXC 2200), both of which have ports for monitor, keyboard, and in the case of the VCX 2200, network connectivity. Alternatively, Cisco customers can use a Cius docking station as a zero-client terminal, or devices from third-parties like Wyse, Devon IT and IGEL Technology. This gives Cisco customers the option of sourcing their thin-client devices directly from Cisco rather than a third party. And it lets Cisco compete directly with HP in yet another market segment, namely the market for thin-client hardware devices. VXI has been tested to work with most Cisco client applications supporting the phone control mode feature. This includes Cisco Unified Personal Communicator, WebEx Connect, Quad Web Phone, Cisco UC Integration for Microsoft Office Communicator, Cisco UC Integration Connect, and the upcoming Finesse interface for contact center agents. (Please see Cisco s Contact Center Announcements Thrust Company into New High-Growth Markets, November 5, 2010.) This will make Cisco s desktop virtualization technology relevant to a broad set of its communications, collaboration and contact center products.
3 Cisco is ahead of most rivals in the area of desktop virtualization for UC. While Avaya, Siemens Enterprise Communications, Microsoft, ShoreTel and others are delivering server virtualization solutions for their communications software, none have annunciated product strategies that extend to desktop virtualization as well. Until its rivals catch up, Cisco will have a competitive differentiator in its desktop virtualization offering. Cisco has partnered with VMware as its virtual desktop infrastructure partner of choice. VMware also provides the hypervisor technology for Cisco s server virtualization solution mentioned above. With VMware dominating the server virtualization market, Cisco customers will be able to adopt an end-to-end server and desktop virtualization technology from a clear market leader. Competitive Weaknesses Competitive Concerns Cisco is by no means alone in delivering a desktop virtualization solution for its communications software. For the past few years Mitel has been shipping one based on Oracle s (previously Sun s) desktop virtualization technology, and this week announced plans to support VMware View as well. (Please see Mitel Launches Strategy to Target Cloud, Virtual Desktop, and Mobility Solutions, November 15, Also see Mitel Forum 2007: Sun Shines on the 3300 ICP, July 2, 2007.) So while Cisco is ahead of most of its competitors, it is Mitel that has distinguished itself as thought leader in this particular area. In delivering its own zero-client devices Cisco is entering into direct competition with some of its ecosystem partners. The VXC 2100 and VXC 2200 devices will be sold alternatives to thin-client hardware sold by Wyse, Devon IT and IGEL Technology Cisco s new partners in the desktop virtualization market. And while HP lacks the zero-client devices Cisco is about to add to its portfolio, Cisco likewise lacks traditional thin client hardware within the HP product lineup and is only now entering a market where HP is a major player. VXI will not at this time support the various soft client interfaces for its communication, collaboration and contact center products, at least not as they are deployed without a physical IP desk phone. This is in part because VXI works by separating signaling from media, the former being handled by software in the data center and the latter by handled locally by the IP phone connected to the VXC device. Requiring an IP phone will result in a higher TCO, which could be an issue among businesses adopting VDI to cut IT costs. Despite years of product availability, desktop virtualization software has been remarkably slow to ignite. Thin client devices, for example, are only gradually displacing traditional client-server solutions and there is a negligible installed base of businesses making communications applications via VDI on traditional PCs and mobile devices. Though Cisco is at the forefront of developers marrying desktop virtualization and UC technology, this leadership position may not result in a significant increase in sales. HP became a market share leader in the virtual client space with its acquisition of Neoware. But because of the fierce rivalry between the two companies it is unlikely Cisco will add HP to its ecosystem of desktop virtualization partners. If the market for desktop virtualization grows, Cisco could find itself in the position of not providing support for a platform deployed by its customers. All components of Cisco s desktop virtualization solution are not expected to be made generally available until H This does not place Cisco behind competitors, since Mitel s VMware-driven desktop virtualization solution is not expected to ship until some undisclosed date next year and adoption of Mitel s SunRay-based solution remains limited. However, the late ship date will give competitors plenty of time to announce and deliver VDI solutions of their own. Response & Recommendations Cisco should clearly articulate a vision for how VXI will impact its service provider customers. Carriers are actively examining hosted virtual desktops as a way to bolster their hosted services portfolios. Cisco should make sure that VXI is made available to carriers deploying its Hosted Collaboration Solution and other UC products sold to its service provider customers.
4 Cisco competitors in the unified communications market should begin formulating desktop virtualization product strategies of their own. Desktop virtualization, like server virtualization before it, is likely to become a checklist feature for unified communications solutions. While a number of developers can offer desktop virtualization as part of a customized or professional services offering, few have productized it in the way Mitel and Cisco are doing. As with their server virtualization offerings, UC solution developers will want to partner with industry leaders such as VMware and Citrix for their VDI offerings. Microsoft is in the unique position of developing both UC and desktop virtualization technology. However clients associated with Office Communications Server 2007 R2 are not supported as desktop virtualization clients. Microsoft will want to begin exploring how in the near future it can deliver a VDI deployment option for Lync clients. Mitel should detail which thin client vendors it will support with its newly announced desktop virtualization solution. The company has announced that it will use the VMware View software, but has yet to detail which vendors thin client devices it will support. Buyer Actions Cisco customers executing on a desktop virtualization strategy should closely examine VXI to see if the backend server and client components associated with the solution match the VDI products they are deploying. If there is a match, it should be fairly straightforward to include Cisco UC and collaboration software into the larger VDI initiative. Businesses with VDI initiatives underway and with investments in Aastra, Alcatel-Lucent, Avaya, Siemens Enterprise and other developers UC solutions should inquire into the status of their plans to deliver and support desktop virtualization as a deployment option. Businesses with VDI initiatives underway need to do their homework when it comes to deploying real-time voice and video applications to virtualized desktops. Modifications to network, client or other elements of the solution may be necessary in order to deliver adequate call quality to end users. Alternately, real-time communications application may need to remain in place on desktop PCs while collaboration, messaging and other applications reside on centralized servers. Analytical Perspective We are positive on Cisco Virtual Experience Infrastructure (VXI), the company s upcoming desktop virtualization deployment option for its unified communications and collaboration software. The new offering places Cisco in the forefront of UC developers that have for the most part have delivered server, but not desktop, virtualization solutions of their own. This should allow Cisco to be among first to market with a productized and fully supported virtual desktop infrastructure (VDI) solution that centralizes UC and collaboration client software. Additionally, VXI fits squarely into Cisco product initiatives aimed at combining its data center infrastructure and collaboration software products. The company has already ported its UC and collaboration server software to its Unified Computing System (UCS) data center server. Combined with the VMware vsphere hypervisor the UC and collaboration server software can run as virtual machines on a common virtualized server environment. Now Cisco client software can also be virtualized, residing on UCS rather than PCs and mobile devices. The result is more of a one-stop shop for data center and virtualization solutions that Cisco competitors can presently offer. Desktop virtualization is an alternative way of extending applications to end users. Rather than application software residing on a dedicated PC, applications on a centralized server, typically in a data center, and accessed via any PC, laptop, thin client device or smartphone. Desktop virtualization allows businesses to centralize desktop management, simplify management and software updates, better secure corporate data and applications, and in general lower the TCO of business applications made widely available to end users. Despite these advantages, the desktop virtualization market has been slow to grow. Though the technology has been available for years, industry reports indicate that less than three percent of desktop PCs have been replaced by solutions based on VDI. Desktop virtualization has been even slower to impact the UC market. This is because delivery of voice and video of adequate quality has been difficult via UC clients delivered via VDI. When Cisco
5 makes VXI generally available late this year, it will be among a very small handful of UC developers with a productized and fully supported VDI solution for its UC software. Though Cisco is clearly ahead of its traditional UC solution competitors when it comes to VDI, this is not likely to remain the case for long. Mitel, for example, is in the process of expanding its presently Sun-centric desktop virtualization offering to also include VMware View. Though other UC solution developers have not announced VDI initiatives of their own, support for VMware View and/or Citrix XenDesktop are likely to become checklist options for UC client deployment, much like support for VMware and/or Citrix server virtualization technology became checklist options over the past two years. Also, Cisco s VDI solutions remain focused squarely on the enterprise. Given the close ties the company has forged with service providers for managed and (to a lesser extent) hosted UC services, the lack of a hosted virtual desktop solution for carriers could count against the company in the near term. All materials Copyright Current Analysis, Inc. Reproduction prohibited without express written consent. Current Analysis logos are trademarks of Current Analysis, Inc. The information and opinions contained herein have been based on information obtained from sources believed to be reliable, but such accuracy cannot be guaranteed. All views and analysis expressed are the opinions of Current Analysis and all opinions expressed are subject to change without notice. Current Analysis does not make any financial or legal recommendations associated with any of its services, information, or analysis and reserves the right to change its opinions, analysis, and recommendations at any time based on new information or revised analysis. Current Analysis, Inc Signal Hill Plaza, Second Floor, Sterling, VA Tel: Fax: +1 (703) Current Analysis, Inc. 2 rue Troyon, Sevres Cedex, Paris, France Tel: +33 (1)
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