"Fastest remote desktop I have ever used.” – G2.com 
By 2026, 80% of DaaS sales will be vendor-assembled or vendor-managed solutions compared with less than 20% in 2023.
Market Definition
Market Description
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Self-assembled DaaS is where the client assembles a DaaS solution from components made available by the vendor. Clients would select and configure the cloud infrastructure, profile management technology and associated storage. Clients would be responsible for configuration and management of the user virtual machines. The vendor operates the client-selected components and provides management and updates of the infrastructure through the life of the service. This segment includes Microsoft Azure Virtual Desktop, Amazon WorkSpaces, Citrix Systems (DaaS) or VMware Horizon Cloud.
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Vendor-assembled DaaS is where the vendor defines most of the solution. The client has less configuration work to perform and focuses on management of the user virtual machines. This segment includes Amazon WorkSpaces, ATSG(dinCloud), Windows 365, Workspot and others.
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Vendor-managed DaaS is where the full service is managed and supported by the vendor. Managed DaaS vendors generally manage the virtual machine operating systems (i.e., patch and update the user’s Windows image) and in some cases provide user support. Vendors in this segment include systems integrators, managed service providers Dizzion, ATSG(dinCloud), Workspot and others (see Table 1 and Figure 1).
Table 1: DaaS Market Segment Organization Profiles
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DaaS Market Segment
|
Organization Profile
|
|
Self-assembled DaaS |
|
|
Vendor-assembled DaaS |
|
|
Vendor-managed DaaS |
|
Figure 1: Typical Responsibilities for Service Components in the 3 DaaS Segments
Market Direction
Investment in DaaS is rising as clients seek to provide secure solutions that are less prone to cyberthreats. Fifty-five percent of clients told Gartner that they plan to increase spending in DaaS through 20241 (see Figure 2). The DaaS market is forecast to grow through 2026, but at significantly lower rates. The compound annual growth rate (CAGR) from 2022 to 2026 is forecast to be approximately 14%, compared with a CAGR of 59% between 2019 and 2022. Although DaaS is a significant market, by Gartner estimates of user volumes, it is less than 10% of the physical enterprise PC market.
Adoption of self-assembled DaaS services dominated the market in 2021 and 2022. We expect a shift toward adoption of vendor-assembled and vendor-managed DaaS in 2023 and beyond, driven by clients not wishing to have responsibility for operating DaaS infrastructures as well as net new clients that require vendor-managed solutions that reduce complexity and skills required. The shift toward vendor-assembled and vendor-managed DaaS is today inhibited by actual or perceived cost increases.
While the DaaS market continues to grow, we have observed some DaaS clients reducing their spend on DaaS and moving back to physical PCs. Five percent of clients said they planned to reduce spending in DaaS, so it remains a small proportion of DaaS deployments.1 Gartner clients cite moving from DaaS to physical PCs due to:
- Cost
- Difficulty optimizing real-time audio and video (RTAV), resulting in poor employee sentiment toward DaaS
- Complexity of operations, especially with self-assembled DaaS solutions
The selection of DaaS vendors through 2026 will increasingly be based on employee experience, alongside security and cost. Increased focus on data residency and security from DaaS vendors has and will continue to provide regulated clients with compliant DaaS solutions in more countries and regions. To date, we have seen financial services and public sector DaaS adoption focused in regions where sovereign clouds are available.
Figure 2: Gartner Client DaaS Investment Plans
The market remains primarily focused on use cases that involve securing access to desktops for a highly distributed or hybrid workforce. Third-party employees are a common use case, which is common for segments such as business process outsourcing or software development.
Market Analysis
Gartner clients are selecting self-assembled, vendor-assembled and vendor-managed DaaS based on the level of operational complexity balanced with cost. More organizations that have the skills to operate complex DaaS solutions are selecting vendor-assembled or vendor-managed solutions because this frees up those skilled resources to focus on delivering employee experience, automation and broader digital initiatives. Cost remains a key selection criteria for DaaS. Many clients have adopted multisession-based virtual machines to reduce costs. Clients must carefully assess the cost versus performance of all elements of DaaS operations before selecting a solution. Table 2 shows how prices vary based on the style of virtual desktop and whether the solution is self-assembled, vendor-assembled or vendor-managed.
Table 2: Negotiated Price Ranges per User per Month for DaaS
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Specification
|
Self-Assembled
|
Vendor-Assembled
|
Vendor-Managed
|
|
Basic Multisession pooled Typical VM specification 8vCPU 32 GB RAM 64 GB Storage providing 2vCPU and 8GB Ram per user |
$15-25 |
$23-40 |
$38-50 |
|
Medium Single-session pooled Typically 4vCPU 16GB RAM 128GB Storage |
$30-50 |
$45-70 |
$50-90 |
|
High Performance Single-session persistent Typically 8vCPU 32GB RAM 256GB Storage |
$100-130 |
$100-175 |
$120-200 |
Source: Gartner (March 2023)
Market penetration of vendor-assembled DaaS solutions has increased in the previous 12 months and will continue to increase. This is driven by clients with limited skills to operate virtual desktop solutions, either on-premises or in the cloud, or it is driven by net new users for virtual desktops. Gartner clients often cite a desire to “get out of managing virtual desktops”; vendor-assembled and vendor-managed DaaS solutions are a good fit to help clients hit this priority.
This Market Guide lists 24 vendors; however, Microsoft is the dominant vendor (see Note 2). Gartner estimates that the Azure platform accounts for 90% of DaaS workloads, with Microsoft’s own offerings estimated to make up 60% of Azure’s DaaS workloads. Microsoft dominated DaaS adoption over the last three years because:
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Many clients have a Microsoft-first approach for digital workplace software and services.
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Microsoft benefited from adoption of Windows 10 and Windows 11 multisession, which is only available on Azure Virtual Desktop, either directly or via Microsoft partnerships with other vendors (including Citrix Systems, Parallels International, VMware and Workspot).
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Third-party tools, which optimize operations and costs of a native Microsoft Azure Virtual Desktop deployment (e.g., Nerdio, HashiCorp [Terraform]), are available.
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Managed service providers deliver DaaS using Azure as a platform.
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The installation of Microsoft 365 Applications is possible on Azure but not on Alibaba, AWS or Google (see 3 Compliance Questions to Ask When Licensing Microsoft Windows and Office for VDI and DaaS).
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Microsoft develops the Windows OS, the Azure platform, Microsoft 365 and Microsoft Intune, meaning their offerings can be integrated into a single vendor solution.
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