Wade Tyler Millward
‘These things are going to happen in the market whether you want them to or not. Technology is constantly changing,” Leostream CEO Karen Gondoly says.
Uncertainty in the remote and virtual desktop market with changes at vendors Citrix and VMware has presented an opportunity for remote desktop access vendor Leostream, which recently launched a formal partner program, Leostream CEO Karen Gondoly told CRN in an interview.
Gondoly said that, in particular, the Broadcom acquisition of VMware and what happens afterward has helped fuel interest in Boston-based Leostream’s use case as a way to save money on VMware’s Horizon commercial desktop.
But overall, she’s looking to position Leostream as a way for solution providers and users to find consistency when navigating multiple operating systems, clouds and hybrid environments, some of which can be affected by market conditions, Gondoly said.
“Our tool … alleviates some of the stress of the other market challenges,” she said. “These things are going to happen in the market whether you want them to or not. Technology is constantly changing. There’s the acquisitions going on with VMware and Citrix. And, again, because of the flexibility of our tool, it allows people to be more nimble and to make solutions that are more efficient even as the market around them is changing.”
Leostream Takes On Remote Desktop Access
CRN has reached out to VMware, Broadcom, Citrix and its parent organization, Cloud Software Group (CSG).
Citrix closed on its $16.5 billion merger with Tibco by Vista Equity Partners and Evergreen Coast Capital in September 2022, becoming CSG.
Leostream has about 30 active partners, a small number compared to the 30,000-plus partners in VMware’s ecosystem.
But both vendors and their partners stand to benefit from a wave of activity in the remote desktop and virtual desktop infrastructure (VDI) space, even as tech vendors big and small deal with normalized IT spending after a rush at the height of the pandemic and tech budgets tightening amid high inflation in the United States and geopolitical uncertainty.
Even with employers revisiting remote work and return-to-office plans, virtual and remote desktops are still attracting customer spending, said Evan Slack, director of sales for emerging cloud and virtualization technologies at Reston, Va.-based Carahsoft – No. 17 on CRN’s Solution Provider 500.
Carahsoft Sees VDI Demand
Slack told CRN in an interview that customers accepting some amount of remote workers for the long run plus the ability for hyperscalers and public cloud providers to deliver the data center performance needed for remote and virtual desktops are part of the fuel for this recent demand.
Slack – whose company has a long list of vendor partners including Leostream, Microsoft, Google, Oracle, VMware and Red Hat – last saw explosive growth in VDI in the early 2010s, when much the technology was mostly on premises and software quality was ahead of hardware performance, he said.
“Even in the return-to-work mode, being able to access that same environment, same experience from anywhere is the current target for organizations,” he said. “It’s an ongoing thing with the hybrid workforce. … The pandemic led to a moment and (I) was curious to see if that was just a temporary thing. But I think there’s a lot of staying power for” remote and virtual desktops.
Although VDI was previously a larger enterprise technology due to the data center investment needed, the technology is more accessible to small and medium customers today, Slack said. But some customers with very small employee counts will still deploy physical clients and connect them to a central data center infrastructure.
Carahsoft has only worked with Leostream for a couple of years now, Slack said. But the technology is complementary to others offered by the solution provider.
Vendor rivalries are heating within the virtual and remote desktop space. Executives with vendors such as Nerdio, which provides tools for MSPs to work with Microsoft’s Azure Virtual Desktop (AVD) and Windows 365, and remote application server provider Parallels have taken shots at Citrix and changes with its partner program since its acquisition by private equity.
For Leostream, Slack said that he’d like to see the vendor more public about how the technology fits in with large vendors such as Amazon Web Services (AWS), Microsoft Azure and VMware.
Customers have understood the benefits of achieving VDI, but they haven’t always understood all the components needed to execute the technology, he said.
“VMware could tell an awesome story about what VDI could be,” he said. “But then the customers are like, ‘OK, that’s great. We’ll just buy VMware. But it’s like, OK, but you also need to get servers and storage and this other stuff. Someone can act as that evangelist for and that thought leader for the use case in general, and then and then pull in the benefits of the different partners they have. Someone like Leostream is better suited to do that.”
Slack said he also sees a need for vendors to design desktop-as-a-service (DaaS) and related offerings for federal government agencies, a major customer base for Carahsoft. “I look at that as an untapped opportunity market for that in the public sector space,” he said.
Wave For Multiple Vendors, Solution Providers
A September report from investment firm Bernstein said that multiple vendors will benefit from the growing desktop-as-a-service (DaaS) market, although vendors might see an opportunity to take share with Citrix and VMware focused on larger customers.
“This is not going to be a winner take all market,” according to the report.
Microsoft, for example, offers Windows 365 (W365) and Azure Virtual Desktop (AVD) in its DaaS suite, which can provide a “substantial revenue lift” to a Windows business that now has the perception of “a roughly stable to slow growing business with the bears concerned about Window’s long term prospect,” especially compared to faster-growth commercial cloud, according to the report.
The firm estimates that over the next three to five years, “Desktop-as-a-Service could generate an additional $14B to $38B in Azure annual revenue growing over the long term to $75B to $100B in annual revenue. … This is meaningfully incremental to Microsoft Cloud thesis and excluding the upside from AI (which is not yet well modeled)” and “could increase Azure’s long term revenue opportunity by 50%+,” according to the report.
“With ~1.4 billion consumer and commercial Windows PCs (see 1.4B Windows PCs) running throughout the world, the opportunity is huge even if Microsoft captures a relatively small percentage,” according to Bernstein.
The Leostream Technology
Gondoly told CRN that solution providers benefit from her small, nimble team.
The company’s technology aims to “provide remote access work from anywhere” and “support modern workflows in a way that adheres to a zero-trust architecture,” adding a security element to Leostream, she said.
The vendor’s tools can be used to audit security rules for implementation and providing IT workers more visibility into rogue users. And the vendor has attracted attention from customers looking to save money on data centers by moving to the cloud, she said.
“Our goal is to allow organizations to build the solution network that works best for them using the technologies that work best for them in the rest of the stack,” she said.
Leostream provides a connection broker and the gateway to provide a seamless end user experience and remote access into these environments without using a virtual private network (VPN), she said. The technology integrates with AWS, Microsoft Azure and Google Cloud.
Common verticals using Leostream so far include oil and gas, media and entertainment and financial services, she said.
“All they (users) know is they log into their Leostream environment,” she said. “They might go to AWS East to log in the next day, maybe they’re going to Azure West. They have no idea. So organizations appreciate that flexibility. … So the idea is, keep your users productive by providing them at-desk performance no matter where they go.”
Leostream can also be used for cost controls, with users monitoring cloud instances and how many are needed based on need, with automatic right-sizing, she said.
The product is not a service offering, Gondoly said. “We allow you to build a DaaS environment, if you so choose, for MSPs,” she said. “But we hand you the software and you manage it. And that gives our customers a lot of flexibility. And it also gives them control over their entire environment.”
Users “control their data because it’s never calling out to a hosted service to check the license or be able to do whatever else those other brokers do,” she said. “We’re looking at what else can we add into our platform so that it really becomes the master portal for users in an organization.”
Leostream is “sticky” with customers because they can keep the broker even when exploring other clouds to use. And if solution providers sell Leostream into only a segment of a business, if that business expands its cloud implementation, they’ll likely opt to increase their spend with Leostream, she said.
New Partner Program
As for why Leostream is now targeting solution providers, Gondoly said that the company has sold directly to customers and through the channel in the past but never had a formalized partner program.
“What we’re looking for are resellers who are solving these types of problems for their end users or end customers,” she said. “So anyone who’s looking to develop a work from anywhere solution or needs to implement zero trust.”
Leostream customers have also shrank their IT staffs and leaned more on solution providers in recent years, cementing the importance for Leostream to work with partners, she said. Federal systems integrators (SIs) are a major target for Leostream.
For potential Leostream partners, they can establish new lines of business, add new industry specialties and speed up their sales cycles, she said. “We can educate our partners on the types of situations where if they just bring it to Leostream first, they can close those deals faster,” she said.
As part of the change, the company reassigned its business development department to a channel and alliances team.
Uncertainty in the virtual and remote desktop space has proven an opportunity for Leostream, she said. “Technology is constantly changing,” she said. “There’s the acquisitions going on with VMware and Citrix. And, again, because of the flexibility of our tool, it allows people to be more nimble and to make solutions that are more efficient even as the market around them is changing.”
For partners, Leostream has launched a partner portal for deal registration, renewal alerts, training access, certifications, sales enablement, marketing materials and other resources, she said. “We want to teach them to fish, not just hand them a fish,” she said. “We are a partner for partners. So we want them to be successful and we want to ensure that we’re giving them the enablement that they need.”
The company was founded in 2002, raised outside funding in 2008 and is “cash flow positive,” she said.