Desktop virtualization (VDI) is one of the hottest pockets of IT innovation today and one where customers are spending without an obvious economic return – something that consulting firms haven’t seen since the Y2K days, according to Richard Scannell, Senior Vice-President and co-Founder at GlassHouse Technologies. “This is one of the first infrastructure projects that the CIO actually cares about,” Scannell said at Citrix Synergy 2011 in San Francisco this week. “Normally they only care about applications. [With VDI] the conversation is, how do I get to market faster, how do I mobilize my workforce, how do I create new lines of revenue? For example, I want to put a device in every saleperson’s hands walking the department store floor, so they can conduct transactions.”

“I think some of it also has to do frankly with the sexiness of the device,” he noted. “The CEO now has an iPad at home, and the IT department instantly starts supporting tablets.”

GlassHouse, which partners with Citrix around services, has expanded beyond its original storage focus and now provides a broad portfolio of IT services.  The Framingham, Mass.-based firm, founded in 2001, also has just under two-thirds of its ~600 people stationed outside of the U.S., Scannell told Wikibon co-founder Dave Vellante and SiliconAngle.com editor and founder John Furrier in the Cube at Citrix Synergy.

VDI is popular in several vertical markets, including healthcare (doctors with tablets at the bedside); higher education; and financial services, among others. In each case there are different drivers, Scannell said. “My personal philosophy on VDI is that it’s not about doing more for less, it’s about doing more for about the same,” he commented. “With the [recovering] economy, it’s an opportunity that just kicked in about 12 months ago.”

For Citrix, Scannell noted, the key is figuring out the parts of the stack that they can own, and they obviously have leadership in the desktop. “Cloud is the next part – what part will they play in public vs. private stacks?” he said.

VDI is really a data center project, not just a desktop project, he commented.  “You have to think all the way back from the experience the user is going to have, through all the layers of technology that are going to deliver that experience, and the resiliency of each layer,” Scannell said. “If your laptop fails, one person can’t work, but if a rack goes down [with VDI], 500 users can’t work.”

The Services market overall is changing, in that the old consulting model of “backing up a schoolbus” and dropping off dozens of consultants at the customer site is going away quickly, as is the “outsource everything” approach, Scannell commented.  Instead, customers want to see real expertise in particular domains. “The other thing is, clients don’t want to operate these environments,” he said. “We operate the backup environment for dozens of companies. You manufacture candy, you don’t have to be an expert at backups – just like everyone outsourced payroll years ago.”

It comes down to operational expertise that customers either don’t have, or if they do have it, “they probably shouldn’t,” Scannell said.