HVD vendors must adapt to market difference post-economic crisis

Peter Dinham
Wednesday, 11 November 2009 10:23

IT Industry - Strategy

Vendors of hosted virtual desktop (HVD) solutions in the Asia Pacific region, including Australia, need to adapt to regional market differences in their bid for sales as enterprises cut their budgets for HVD deployments in the economic downturn.

According to Gartner, while the economic downturn is curtailing budgets for deployments in mature Asia Pacific markets such as Australia, interest in HVD deployments continues to grow in the emerging markets of China and India.

Lillian Tay, principal research analyst at Gartner, said today that although HVDs have high priority in large and midsize companies in Australia, “few big deployments are expected in the next 12 months,” adding that while large enterprises in China and India give HVD a lower priority, they “currently offer better opportunities for HVD deployments.”

“The market for hosted virtual networks will accelerate rapidly through 2013, reaching 49 million units worldwide,” said Lillian Tay, principal research analyst at Gartner.  “However, HVD vendors, especially in Asia Pacific, need to approach emerging and mature markets with different go-to-market strategies based on a multitude of different local factors.”

According to Tay, among the three markets surveyed, it was “not surprising that the priority for HVDs is currently highest in Australia where, among large enterprises, having an HVD strategy is the second priority after software as a service (SaaS).

“Midsize companies rated an HVD strategy as their first priority, followed by SaaS. In terms of implementation, 28 percent of large enterprises and 33 percent of midsize companies in Australia in the survey say they have already implemented HVDs.”

However, Tay said that while Gartner fully believes that HVDs have an opportunity to move to a larger scale in Australia, “companies are currently hindered by restricted budgets, with many organisations postponing or cancelling deployments planned for 2009 due to the economic situation and she said that the economic impact on midsize businesses has been particularly pronounced although Gartner expects more funds to be made available in 2010 in many sectors.

The Gartner survey revealed that in China, survey respondents from large and midsize companies gave HVD strategies a low priority and also rated HVDs lower in terms of helping to lower costs, with the firm reporting that a small number of companies in China only just beginning to explore HVD technology and deployment, with only six percent of large enterprises surveyed having implemented it and 71 percent of midsize companies having no implementation plans. 

“Nevertheless, interest in HVDs remains, with 41 percent of large enterprises surveyed having budgeted for HVD implementation in 2009.”

And, in India, Gartner says that companies also gave HVDs a low priority in the survey, which it says could be because the “uneven maturity of IT infrastructure makes it difficult for further HVD deployments in India, without more-substantial IT infrastructure, which is currently not a priority.”

Gartner says that  HVD implementation in large enterprises is low in India, with only 16 percent saying they have implemented HVDs, but 25 percent of large enterprises saying they had budgets put aside for HVDs compared with 11 percent of midsize businesses.
 
“Given the relative lack of awareness and priority of HVDs in companies in China and India, we advise HVD vendors to develop pilot-ready packages and target them at large enterprises in these markets for the next two years,” co-author and China analyst, Eileen He, said.

“Also, given the varied IT infrastructure maturity in these countries, it is advisable to target the major cities, where vendors should approach vertical industries that have the most interest in the technology.

“Strategies should differ in the more mature Australian market where vendors should concentrate on moving users beyond the pilot stage and keep IT personnel up to date on product development roadmaps so they can understand and prepare to identify new users who will be best-suited for HVDs as the technology progresses.”