Desktop Virtualization has been underappreciated. While much of Wall Street has become fixated on the growth potential of server virtualization, it is the investors who have underestimated the size and potential growth of the desktop virtualization market. Desktop Virtualization software is expected to grow from minimal deployments currently to at least a $1.5 billion market by 2011 with approximately 25.6 million end users—representing 5.7% of professional desktop PC installed base.

Desktop computing is a  serial cost offender. In the current spending environment of IT organizations looking to reduce the cost of maintaining existing IT systems, the corporate desktop represents a serial cost offender. Desktop hardware and software acquisition expenditures typically account for only 20-30% of the total cost of that device, while the remaining 70-80% consists of IT maintenance. It is estimated that desktop virtualization could lower the annual total cost of ownership of desktop computing by 40-50% versus high-end workstations and 5-10% versus low-end PCs, while simultaneously improving computing flexibility and reliability for end users.

So, why now? “Thin” computing models have failed to gain significant traction in the past, as the static published desktops of legacy thin, many of whom required more performance, data isolation, desktop personalization, and control. Furthermore, many applications are not designed for use in a multi-user terminal services environment, which limited the addressable user base of traditional server-based computing model. Now, however, it is believed that virtualization technologies have matured to the point where they can now be applied to the corporate desktop environment to improve performance, increase flexibility, provide personalization, remove application compatibility issues, and reduce operating and capital expenses.

So, how do you invest in desktop virtualization? Citrix Systems. While it is expected both Citrix Systems and VMware are attempting to leverage dominant positions in each company’s respective core virtualization market to enter into the desktop virtualization market, Citrix Systems is viewed as the better-positioned vendor to capitalize on this emerging opportunity, based on the breadth and depth of its product portfolio, as well as its large installed base of more than 70 million end users currently utilizing Presentation Server. Furthermore, it is expected IT hardware vendors will experience a shift in spending from traditional desktops to thin-clients and higher-end servers, where it is believed that Hewlett-Packard has developed the strongest roadmap.