Pano Logic collapse raises questions over VDI

Demise of "zero-client" vendor could be a signal that market has moved on, claim onlookers

The collapse of Pano Logic has been hailed by some as a definitive sign that virtual desktop infrastructure (VDI) is failing to resonate with end users.

Three years after first trumpeting its "zero client" technology in the UK, the US-based firm has pulled down the shutters and appointed corporate restructuring company Sherwood LLC to handle its assets.

There were few signs that Pano Logic, which as of last year claimed to have over 100,000 zero clients in production, was heading for the buffers: as recently as 22 October the firm was boasting on its website of a large deal it secured with a US credit union.

UK partners admit they only learned of its demise when the story broke in the US press last week.

Mark Ketteridge, sales director of VAR Abtech - which had only one Pano Logic client in the UK - said: "I think it was poor form that they didn't have the decency to inform partners what was going on. It was a decent enough product and we had no inkling that it was going under."

In 2009, VDI was being hailed as an industry great white hope, with the likes of IDC and Gartner forecasting that the technology will account for 30-50 per cent of the PC install base by next year.

However, Oren Taylor, director of CDG, which had until recently acted as a UK distributor for Pano Logic, said the technology had failed to meet those lofty expectations. He said CDG had only an ad-hoc relationship with the vendor after concluding the market had moved on.

"Here you have a well-funded VDI company that had a unique piece of technology," Taylor said. "But even though everyone thought it was cool, it wasn't selling - and that's the story of VDI."

Taylor said that market heavyweights such as Citrix and VMware are now bundling VDI into other products to get sales moving.

"The whole concept of the desktop is changing," he said. "It's more about data and identity management, and bring your own - of whatever flavour - is now really the future. VDI is a niche requirement and will become even more so."

Paul Hilder, director of Pano Logic partner OSSC, agreed that it had been a hard sell.

"Although we implemented Pano Logic ourselves, we never sold one unit," he said. "I think the big problem in the UK is that virtualisation has not been accepted at a desktop level. It is a big purchasing decision to move away from a PC environment."

Pricing had also been an issue, Hilder added, particularly since Pano Logic - which was run by former Wyse boss John Kish - struck an OEM deal with Fujitsu in 2010 to embed its technology in its monitors.

Ketteridge expressed his admiration for the technology, claiming it could save about £95 per PC, per year, on energy alone, but admitted it was tough to make margin from such a low-value product. He stressed that Abtech has demonstration units for any customers that encounter faults.

However, Guy Watts, sales director of Wyse distributor G-Tech, disagreed that VDI is on its way out.

"My view is the opposite," he said. "A year ago, we would have said 3-5,000 seats was a large deal, now we are talking about 30-50,000 units.

" I think 2013/14 will be a huge year for the desktop component of VDI."