Virtual Desktops and DaaS are growing at a rapid pace with a projected 253% increase in the next two years. Are you positioned to take advantage of it?
The last few years have been a constant mix of changes and adaptations to our lives. It has affected our personal lives, the economy, and the way we work. As we have seen across various industries, businesses that are positioned well are finding more success than ever before. So what does that mean for service providers like MSPs? If there is one thing to learn, it's be ready to adapt. Let's jump right into it.
Market opportunity
The Desktop as a Service, or DaaS, market revenue grew by 98% in 2020 compared to 2019. By 2024, 80% of virtual desktops served to remote users will be DaaS, up from fewer than 30% today. (cite source, Gartner guide) There are still fewer DaaS users than those of on premise VDI, though Gartner forecasts that this scale will tip the opposite way in 2024. By that point, DaaS will account for 10% of total PC users. With these projections in the market, we can anticipate that a significant amount of VDI environments will be replaced with DaaS when it is time for a technical refresh.
With this level of market growth opportunity the question is; who will be strategically positioned to provide and support these customers and the demand for DaaS? Statistics from BusinessWire tell us that, for MSPs in this market, the two most consistent drivers of MSP growth include generating a higher portion of total revenue from managed services, and setting specific revenue and growth goals. Combined, these two activities enable MSPs to roughly double their rate of growth. In fact, for every 10% of total revenue derived from managed services, MSPs grow their businesses by between 0.25% to 0.75% on an annual basis. Further, the information suggests that larger MSPs and also upstart MSPs located in North America are growing at the fastest rate.
Here's where we are at so far.
- Post pandemic hybrid work has changed the world that we knew.
- Virtual Desktops users account for more than DaaS users
- DaaS users will take over VDI users by 2024 in a substantial market shift
- Combining a higher portion of total revenue and setting specific revenue/growth goals can double growth rates.
MSP challenges in DaaS
For businesses that rely on MSPs, differentiating one MSP from another is a key factor in the success of their business. That said, the stakes are high when selecting the right MSP, with the wrong choice potentially having dire consequences. This is critically accurate with Desktop as a Service deployments. MSPs need to have substantial and adequate resources to successfully position, deploy, and most importantly, manage a DaaS environment. Unfortunately, with the rapid increase in demand, many MSPs don’t have the skills, competencies, or knowledge to take advantage of this new revenue stream.
At minimum, an MSP would need to employ multiple headcount including Solutions Architects, Azure, AWS, or other VDI platform specialists, and support personnel to manage other elements of the DaaS lifecycle.
There's no denying that it is HARD TO DO! And expensive! Only a small percentage of MSPs have what is required. As was mentioned above, the stakes are high for businesses when selecting the right MSP. The same holds true for MSPs when selecting what ISVs they choose to deliver solutions to their customers. The wrong choice can have dire consequences for the trust that their customers have in them.
Partnering
Here's the good news. If you are an MSP that is looking to provide DaaS to your customers, you have options, however, there are multiple elements to consider when vetting out providers.
Platform
This is a no brainer. Making sure that the platform is easy to use, easy to navigate, and has the features you are looking for. Here's the not so obvious thing to consider. How much experience does the platform have and what's behind the scenes supporting it? Things like, automated monitoring of virtual machine performance, preconfigured images and models, auto scale optimization, etc. are all important to consider.
DaaS management
This is the area that will set apart some providers. Do you have internal resources to manage this segment? If not, does your DaaS provider? Important things that need to happen here are customer onboarding, migration, optimization, image patching, usage and incident metrics, and level 1 support.
Azure Management
Azure and other supporting frameworks have their own management needs and someone to take care of it. This is another crucial need to successfully have your DaaS offering run optimally. Major considerations are disaster recovery planning, billing reconciliation, and incident management.
Sales and Marketing
Since the opportunity for MSPs to sell DaaS to their SMB customers is new, understanding how to market and sell a DaaS solution is lacking. Does your provider that you are partnering with provide you with the resources need to do this? Sales and demo training, marketing collateral, sales resources, etc. The best solution on earth can't earn you revenue if it's not sold. Don't overlook this.
As you can see by now, offering a DaaS solution that you can rely on to deliver a best in class result for your customers is resource intensive and complicated. Choosing the best strategy for how you go to market is critical to creating this new line of revenue and differentiation. Do you build, manage, and support it yourself or work with a partner who has the resources that you can leverage to manage and support it?
About Us
At DesktopReady, we have pioneered the VDI space for 10+ years and managed 500,000+ desktops. Our Turnkey Partner Program for MSPs makes it simple for you to deliver a DaaS solution with no upfront costs and no prior VDI or DaaS experience. Together, with our MSPs partners leveraging our 500+ experts, you can accelerate your time to market with a fully managed solution, potentially saving you hundreds of thousands of dollars on internal labor costs.
