Virtualization Takes Hold, Says Gartner Magic Quadrant on Desktop Outsourcing

Virtualization is becoming more of a factor in the desktop outsourcing services market, according to William Maurer, Gartner research vice president and co-author of the recently published Magic Quadrant for Desktop Outsourcing Services. Twelve vendors made it into the Leaders Quadrant in the report, which overall saw a static roster of vendors from the previous year's edition. Gartner reports that more firms are using virtualized servers -- which, theoretically at least, can provide cost savings of 15 percent to 30 percent over the use of actual servers due to lower hardware costs and energy savings. Unfortunately, Maurer says, there still aren't enough firms using virtualized servers to actually prove the theory. Maurer remains convinced the theory will hold: "If the service is as good, then there should be some cost savings." Another related technology that is starting to gain some traction -- though it, too, is in its very early stages -- is the virtualization of desktops, Maurer says. Additionally, the implementation of remote infrastructure management tools and knowledge database tools are leading to fewer site visits, and therefore increase the potential for cost reduction or cost containment, though it will take time to measure any actual savings. Beyond the virtualization technologies, the desktop outsourcing services market is very mature and continues to expand, Maurer says, adding that diagnostic problem-solving capabilities began in 2007 to become a necessity in order to win contracts. The compound annual growth rate for the market was 4.7 percent in North America and 8.7 percent worldwide in 2007. One sign of a mature market is the fact that Gartner had no vendors listed in the Visionaries Quadrant -- a sign that innovation may be lacking. Another indication of maturity is the large number of vendors -- 12 -- that Gartner feels is leading the market:

• EDS;
• IBM;
• Perot Systems;
• CSC;
• CompuCom;
• Unisys;
• Siemens IT Solutions & Services;
• Hewlett-Packard;
• ACS;
• Northrop Grumman;
• Dell; and
• Getronics (which was recently purchased by Royal KPN).

Gartner defines the Leaders as companies that perform services skillfully, have a clear vision of the market's direction, and are actively building and improving competencies to sustain leadership positions. Evaluation criteria included several factors, but weighted the most important were customer experience, sales execution/pricing acceptance, marketing execution, and operations. Gartner based its ranking largely on references from enterprise customers. Participating vendors also had to have at least $45 million in desktop service revenue and had to provide at least six North American-based references. In the Challengers Quadrant, Gartner lists the following six vendors:

• Tech Team;
• Ciber;
• Pomeroy IT Solutions;
• CGI;
• SAIC; and
• Lockheed Martin.

According to the report, the challengers have less defined view of the market's direction. The report cites GlobalServe as a Niche Player, which Gartner defines as a firm that is too narrowly focused. Still, the report notes that GlobalServe is in the process of expanding its market.

Related articles: Have Laptop, Won't Travel Gartner Wireless '08: As the mobile workforce continues to evolve, "portable personality solutions" will be all the rage, says one Gartner analyst. Siemens Communications' Virtual Reality The Siemens AG subsidiary releases a solution to capitalize on the agents-anywhere concept, and delivers additional presence and collaboration capabilities. Aspect Offers More Localization and Capabilities for '08 The latest version of Aspect Unified IP 6.5.1 expands language capabilities, and adds unified command and real-time reporting. In Magic Quadrant for Application Delivery, F5 Really Delivers Looking at the network-technology vendors specializing in serving up the technology of others, Gartner gives glowing marks to just two out of 13. Salesforce.com Nabs CompuCom CompuCom, which garnered $1.8 billion in sales last year, needed a centralized CRM solution to provide a real-time repository for information from each region when tracking and managing customers and prospects.

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