DaaS Market - Outlook (2014-18) for North America

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Tableof Contents

1. Introduction1.1. Report Description1.2. Objective1.3. Scope of the Research1.4. Regions Covered1.5. Key Takeaways1.6. Key Stakeholders1.7. Key Terminologies1.8. List of Abbreviations

2. Executive Summary2.1. Executive Overview

3. Research and Forecasting3.1. Research Methodology3.2. Forecasting Methodology

4. Industry Landscape4.1. Market Size and Growth4.2. Competitive Landscape4.3. Market Share4.4. Company Classification4.5. Region Outlook4.6. Market Metrics4.7. Porter's Five Forces Model4.8. Key Drivers Analysis4.9. Key Constraints Analysis4.10. Key Opportunities Identified4.11. Key Challenges Identified

5. Market Segmentation5.1. Region    5.1.1. North America

    5.1.1.1.   Market Size and Forecasting    5.1.1.2.  Key Drivers Analysis    5.1.1.3.  Key Constraints Analysis    5.1.1.4.  Key Opportunities Identified    5.1.1.5.  Key Challenges Identified

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Introduction 01 4

1.  Introduction

1.1.  Report Description

Desktop management has always been the talking point for companies as they can save costs by deploying innovative technologies and models. While some firms have resorted to technologies like Virtual Desktop Infrastructure (VDI) and Remote Desktop Services (RDS), one more contemporary desktop delivery model, called Desktop-as-a-Service (DaaS), has gradually evolved. Providing access to desktops anytime anywhere forms the basis of DaaS wherein these desktops are on cloud. However, this report provides information on how particular types of DaaS will fare in the market and which model would be best to invest in as an end-user of the technology.

This report presents interpretative and easy-to-understand facts on how the current DaaS market is segmented based on end-user verticals, product types, delivery models, and geographies. It cuts through several facets of the DaaS market such as market size, market share for each segment, and the drivers and constraints of this marketplace.

1.2.  Objective

1. To understand the DaaS market across the globe by addressing the challenges faced by the industry with regards to the adoption of DaaS.2. To estimate the size of present global DaaS market and its forecast.

1.3.  Scope of the Research

Scope of the research was limited to understanding the market share across segments. Key drivers,constraints and challenges along with their impact on various business functions in both short term and long term were addressed.1. End User Verticals2. Product Delivery types3. OS-based products4. Regions based segmentation and their forecast.

1.4.  Regions Covered

1. North America (USA, Canada and Mexico)2. Europe (UK, Italy, France, Germany, Spain, Netherlands)3. APJ (China, India, Japan, Australia and other Pacific countries)4. Rest of the World (Middle East and Africa, Russia and other countries)

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1.5.  Key Takeaways

The research conducted to understand DaaS markets in different regions of the globe have revealed some valuable insights. Some of the key take away points involve:1. DaaS as a market is yet to be defined by the industry, but the recent developments in mergers and acquisitions by enterprise firms of specialized companies reveal that the industry is ready to embrace this technology and move forward.2. North America is the revenue focal point for DaaS closely followed by Europe and emerging markets in Asia Pacific. 3. Desktop-as-a-Service is heavily dependent on the concept of 'Consumerization of IT'4. The market share of DaaS is set to increase from over USD 230 million in 2013 to over USD 1 billion by 2018 at a CAGR of 34.5%.5. North America and Europe together has been eye of the storm for more than 80% of the DaaS firms6. DaaS is the best facilitator and the answer to many questions arising on security and the related aspects of technological barriers. It is an enabler of BYOD (Bring Your Own Device) revolution7. Telecommuting friendly firms are targeted by DaaS vendors as DaaS is a viable option for firms with employees spending majority of their time on field. 8. 67% of the DaaS vendors are SMBs or Specialized firms followed by 18% mid size firms and 15% Enterprises.9. 2012 was a major year for DaaS with close to 23% of the companies established in the year followed by 2013 witnessing close to 17% of the companies.10. Enterprises are slowly experimenting with the idea of adopting DaaS to achieve successful transition from CAPEX to OPEX.

1.6.  Key Stakeholders

As a business owner or stakeholder, one needs to pay attention to clues on what is going to happen in the market, in order to stay ahead in the league. While it is good to participate with the own clan to understand the current market better and to mature sales performance in existing markets, a smart stakeholder will always seek information on its market and competition.

The major beneficiaries of these reports are DaaS vendors, DaaS end users, VDI service providers and IT hardware companies. This comprehensive report allows companies to alleviate risk, recognize new opportunities and initiate effective strategies for growth.

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1.7.  Key Terminologies

1. Application Virtualization: Refers to running an application on a thin client; a terminal or a network workstation with few resident programs and accessing most programs which reside on a connected server. Application virtualization refers to the separation of an application from the accessing client computer.2. BYOD: Bring Your Own Device is the practice of allowing employees of an organization to use their own computers, smartphones, or other devices for work purposes.3. CAPEX: Capital Expenditure is money invested by a company to acquire or upgrade fixed, physical, non-consumable assets, such as buildings and equipment or a new business.4. Consumerization of IT: Is the blending of personal and business use of technology devices and applications.5. DaaS: The ability to access one's desktop from any device at any time from any location is DaaS (Desktop-as-a-Service).6. Desktop Virtualization: Is the concept of isolating a logical operating system instance from the client that is used to access it.7. Legacy Systems: Refers to outdated computer systems, programming languages or application software used instead of available upgraded versions. 8. Mid-size: A firm having > 501 and 9. Mobility: Enterprise mobility is the trend toward a shift in work habits, with more employees working out of their office and using mobile devices and cloud services to perform business tasks.10. OPEX: An operational expenditure (OPEX) is the money a company spends on an ongoing, day-to-day basis in order to run a business or system.11. Server Virtualization: The physical server is partitioned into smaller virtual servers. The resources of the servers are masked from users by software.12. Session- based Virtualization: Allows multiple users to connect and log into a shared but powerful computer over the network and use it simultaneously.13. SMB: A firm having less than 500 desktop seats.14. Specialized Firm: A firm providing specialized services only pertaining to a particular technology / industry.15. Telecommuting: Telecommute simply means to work from a remote location, usually a home office, by electronically linking to a company. For many, the word telecommute implies employment (though working off-site) because often companies don't allow non-employees to access their computer systems in order to telecommute.16. VDI: Virtual Desktop Infrastructure - A desktop-centric service that hosts user environments on remote servers and blade PCs, which are accessed over a network using a remote display protocol. A connection broker connects users to their assigned desktop sessions providing access from any work location.17. Virtualization: Virtualization is the creation of a virtual (rather than actual) version of something, such as an operating system, a server, a storage device or network resources.

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1.8.  List of Abbreviations

1. APJ: Asia Pacific and Japan2. BYOD: Bring Your Own Device3. CAGR: Compounded Annual Growth Rate4. CAPEX: Capital Expenditure5. CEO: Chief Executive Officer6. CIO: Chief Information Officer7. CITE: Consumerization of IT for Enterprises8. DaaS: Desktop-as-a-Service9. DR: Disaster Recovery10. EMEA: Europe, Middle East & Africa11. IaaS: Infrastructure-as-a-Service12. IDG: International Data Group13. IT & S: Information Technology & Services14. IT: Information Technology15. ITU: International Telecommunications Union16. NIST: National Institute of Standards & Technology17. OPEX: Operational Expenditure18. PaaS: Platform-as-a-Service19. R&D: Research & Development20. SaaS: Software-as-a-Service21. SEA: South East Asia22. SFDC: Salesforce.com23. SMB: Small & Medium Scale Business24. SPLA: Service Provider License Agreement25. TCO: Total Cost of Ownership26. UK: United Kingdom27. US: Unites States28. USD: United States Dollar29. VDI: Virtual Desktop Infrastructure30. SME: Subject Matter Experts

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Executive Summary 02 9

2.  Executive Summary

2.1.  Executive Overview

DaaS Set To Take OffOriginally invented and implemented to divide the huge mainframe computers, virtualization took birth in the 1960s. Soon after IBM implemented the technology on their mainframes, a surge in Windows operating system saw a huge demand for x86 servers which led to "distributed computing". This development in the industry implied that virtualization was put on hold. Increasing costs of end-user computing maintenance and servers meant that there was a need to look at alternatives. This is when VMware produced and marketed its own virtualization products. Although IBM used the technology to implement it on their servers in the mid-1980s, it was VMware that took it to the masses.

VMware re-introduced the technology to address the concern of increasing physical infrastructure costs in the late 1990s. This was a phase when disaster recovery started gaining importance due to insufficient disaster recovery options, which were proving to be a cause for concern across enterprises.

Expensive infrastructure paved the way for server virtualization which was an instant success resulting in adoption from all quarters of the industry. It was a stepping stone for virtualization to evolve, giving birth to desktop virtualization and VDI (Virtual Desktop Infrastructure). Some of the definitions involving virtualization, VDI and DaaS are: 1. Virtualizing desktops is desktop virtualization. Creating a virtual environment within the desktop helps with various PC related activities, which will not affect the performance of physical desktop. Fear of data loss is nullified. 2. Virtual Desktop Infrastructure (VDI) refers to creating virtual desktops in an organization, which are hosted in the data centers. VDI provides numerous advantages like workstation provisioning, centralized patch management and secured data.3. Desktop-as-a-Service (DaaS) is the delivery of desktops over Internet on any device at any time of the day which could be accessed from anywhere in the world.

DaaS has gradually evolved from the shadows of virtualization to provide cost-effective desktop delivery solutions to end users who are otherwise concerned with the upfront infrastructure investments, which is necessary in case of VDI. While desktop virtualization is also referred to as a DaaS offering, the any device factor plays a major role in the evolution of DaaS.

DaaS is important for companies that are looking at saving costs on configuration and maintenance of desktops. With the evolution of 'Consumerization of IT', enterprise users are now looking at different lines of operations within the organization to manage desktops. As telecommuting gains importance, DaaS will provide quite a relief to enterprises concerned with employee productivity. While in-house VDI becomes expensive, DaaS provides cost effective solutions to manage desktops via cloud. DaaS also provides centralized management of desktops thereby simplifying the deployment and onboarding of applications and users. All-in-all, this disruptive technology is set to take off and provide companies the much needed relief in maintaining desktops.

DaaS is the Latest Disruption

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Disruption in technologies is imperative. The level of disruption, however, is decided by the demand-supply canvas.

DaaS is disrupting the IT industry for good. Companies are now more focused on redefining productivity. Applications are already being rethought for suitability and compatibility. Bring-Your-Own-Device (BYOD) has encouraged companies to adopt DaaS thereby allowing the prosumer (employee) to be the owner of his/her desktop. Employee expectations reaching new highs with every passing year, companies are forced to rethink their policies. Unlike VDI which is touted to be expensive, DaaS has disrupted the prices in virtualization by providing cost effective desktop solutions. VDI has often been found wanting when the desktop is far away from the datacenter thereby limiting the boundary of usage. With DaaS, one can access the desktop remotely on any device, anytime from anywhere irrespective of location and its constraints as long as the device is connected to the Internet. However, in emerging nations this factor of Internet connectivity looms large on consumption of DaaS. While the developed nations have overcome this constraint by upgrading the network infrastructure, the emerging nations are gradually reaching that stage. Success of mobile broadband penetration has had a positive effect on DaaS and will certainly play a major role in deciding the way it performs in the market.

Many anti-cloud proponents have often raised the question of security. It is believed that data security is a major concern but DaaS eliminates that fear by storing all of the data in the data center. It is more secure than a traditional PC where possibility of data loss is higher.

DaaS is still an infant technology in comparison to the other cloud offerings like DRaaS (Disaster Recovery-as-a-Service), PaaS (Platform-as-a-Service), IaaS (Infrastructure-as-a-Service) and SaaS (Software-as-a-Service). This disruption is here to stay and perform exceedingly well and throw wind of caution to other virtualization technologies.

Allowing corporate accessibility to personal devices via DaaS will be the norm going forward.

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Research and Forecasting 03 12

3.1.  Research Methodology

Base Year: 2013Forecasting Period: 2014 - 2018

3.1.1.  Sampling

The leading suppliers of each end-user product categories that were chosen to provide a larger representative sample.

Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth aspects of the market.

3.1.2.  Secondary Research

The research methodology that was carried out was desk research through various journals, association reports, and in house database to build a knowledge base on various market service segments, product categories and industry trends.

Various fact based data was analyzed. Some of the sources included:

a. ResearchFox Knowledge Base:

Previous data on the market has been put through a rigorous and comprehensive analysis to analyze the current state.

b. Desk Research:

Industry reports, annual reports, press releases, webinars, journals and publication, independent rating agencies and government statistics.

3.1.3.  Primary Research

Primary interviews were conducted among various stakeholders:

Product and service companiesMembers of associations and alliancesSubject Matter Experts and EvangelistsConsultants and Strategists

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3.1.4.  Industry Information

It was essential to understand the current industry landscape, market dynamics, security ecosystem and competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales Managers and product stakeholders were interviewed.

3.1.5.  Technical Information

In addition to the interviews with leading participants for industry-related information, ResearchFox conducted interviews with Research and Development (R&D) and Design and Development teams to understand the current usage of the products by service type and also to find out the emerging trends. Finally, interviews with suppliers were conducted to cross check the validity of information and also to understand the emerging trends in the end-user segment. The detailed methodology for primary research is outlined below.

3.1.6.  Primary Interview Questionnaire Design

ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their discussions. This process ensured the collection of all necessary data. The questionnaire was designed to elicit unbiased industry level data (market size, production, sales, and others), that had check points (questions such as company level information and their position in the industry acted as check points) to ensure accuracy of the data. The questionnaire included the following sections:

1. Industry level information2. Characteristics and Dynamics3. Company-specific information4. Market segmentation data

3.1.7.  Interview Questionnaire Test and Validation

Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the appropriate market and technology data was generated. After the final design of the questionnaire, ResearchFox began full scale primary research. Specific companies targeted for primary research interviews were selected based upon market participation. Higher was the entity's profile, more attractive was the entity.

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3.1.8.  Interview Process

As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key data, operations, and competitive information. Multiple contacts within a single organization and with an individual are often planned and/or staged in order to optimize and complete the information gathering process.

3.1.9.  Research Validation

At a point, when 20 percent of the research interviews and/or data collection had been completed, ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with project objectives. The analyst team analyzed the information from the interviews and information was validated through a combination of the following validation techniques:

Cross checking with other primary data and previously developed in-house researchReview of secondary information, such as trade journals, annual reports and industry directories

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3.2.  Forecasting Methodology

3.2.1.  Step-by-Step Methodology for Market Estimation and Forecasting

Market Estimation and Forecast Methodology, 2014

Step Method

1Understand the market mechanism for the market through structured, systematic and theoretically established norms of analyzing, designing, introducing and quality assurance of the market estimation

2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time

3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team

4 Market estimation and forecast calculation

5 Delphi method and Causal Analysis used as and when required

6Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final publication

Source: ResearchFox

Significance and Importance of the Market Forecast, 2014

Sr. No. Significance and Importance

1 Helps revisit on the company's R&D investments

2 Keeps the Sales and Marketing team posted on the market prospects

3 Strategize investment and expansion plans

4 Improve business planning

5 Helps create business aims and set sales figures within the company

6 Aware of the current market competition

7 Support plans for Merger and Acquisition (M&A)

Source: ResearchFox

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