Is Pano Logic’s Demise the Death Knell for Server-Based VDI?

by Purnima Padmanabhan on November 2, 2012

On October 29, 2012, Pano Logic—a manufacturer of zero-client software devices tailored to VDI—declared bankruptcy and closed its doors, shortly after it had announced a mammoth deal with Redstone Federal Credit Union in Alabama, who planned to replace hundreds of its desktop PCs with the company’s technology.

What could possibly bankrupt this up-and-coming startup after scoring such a big client? From what I knew of Pano Logic, it was innovative, apparently well managed, and successfully gaining market traction. The Twittersphere is abuzz with rumors, including about a possible cease-and-desist order. I’m sure the truth will come out eventually.

However, I’ve been wondering if the issue was something more fundamental.

Perhaps Pano Logic had gone “all in” on an architecture that has begun to reveal chinks in its armor over the last couple of years—server-side VDI (versus a client-side model that leverages the power of the endpoint computer). Maybe the company's fate is the harbinger of a much greater failure: that of server-based VDI as a viable model for desktop architecture.

Although the idea of a zero client sounds like a tidy way to replace PCs in a VDI environment, it has some serious drawbacks. A zero-client model requires streaming audio and video (now core staples of all enterprise-class applications) from the data center, instead of leveraging the endpoints’ native hardware capabilities. This model adds latency and detracts from user experience.

Once touted as a cost- and energy-efficient architecture, server-based VDI is proving to be the opposite. While it may reduce desktop-management costs when compared to traditional approaches, VDI’s backend complexity and high server/data center costs yield high TCO and a slow path to ROI. Its user experience is dismal compared to distributed computing. And its flexibility (user choice, hybrid app delivery, and so on) leaves much to be desired.

Contrary to the server-side VDI approach, MokaFive’s philosophy has always been to support a simple distributed architecture that harnesses the native power and capabilities of the endpoint. This model is rooted in efficiency, as well as in the belief that consumerization of IT has bred users with high expectations of device flexibility. These sophisticates expect outstanding video and audio. They require offline use, as they travel across continents and time zones to attend global meetings or work remotely. Above all, they have come to believe that they are entitled to use the devices they prefer—the ones they feel make them the most effective and productive.

As time goes on, I’m confident that the industry will continue to prove the client-based approach correct. By harnessing the power of the endpoint, client-side solutions provide flexibility for all types of app delivery. They leverage endpoint hardware CPU and memory, ensuring a rich user experience. They work online or offline. And they allow users to choose the devices and platforms that make them feel the most efficient and productive. I have been seeing a shift towards this model. Huge traction in the channel and telesales. Increased investment in the client-side model by industry heavyweights, such as VMware and Citrix. And a notable shift in focus to client-side VDI from OEM vendors, such as Lenovo and Dell.

Technology discussions aside, my heart goes out to those who invested their time, money, and passion into conceiving and creating Pano Logic’s product portfolio. From one startup to another in the same market space (and the same city!), I imagine that this failure was a crushing blow. Hopefully, we will soon see some of the company's innovative players surfacing again with new ideas, new products, and great new contributions to this technology ecosystem.

–Purnima

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