Should we give DaaS another thought?

Desktop as a Service (DaaS) has seen significant advancements and enhancements recently, positioning it as a more attractive option compared to Virtual Desktop Infrastructure (VDI) and conventional PC deployment and management.

DaaS functions as a cloud-based service where a provider hosts virtual desktops, streaming them via the internet to user devices. This delivers a full desktop experience—comprising the operating system, applications, files, and user configurations—from remote cloud servers, rather than relying on local PCs.

While this description closely resembles VDI, notable distinctions exist. VDI operates within an organization’s private data center, whereas DaaS is managed within the cloud service provider’s data center. For VDI, customers bear the responsibility for purchasing, deploying, and maintaining the infrastructure and operating environment. In contrast, DaaS solutions see the cloud service provider (CSP) manage all hosting, hardware, and software aspects, significantly reducing the customer’s operational burden.

Gartner projects a promising outlook for DaaS. According to their recently published 2025 Magic Quadrant for Desktop as a Service report, the analytics company forecasts that by 2027, virtual desktops will be economically viable for 95% of employees, a substantial increase from 40% in 2019. Furthermore, they anticipate that virtual desktops will serve as the primary work environment for 20% of the workforce by then, up from 10% in 2019.

Sunil Jason Kumar, a senior director and analyst at Gartner and co-author of the report, credits this transition to enhanced cloud service provider (CSP) offerings. He commented, “Many vendors are now handling the management aspects, which significantly reduces the burden on organizations. The advanced skill set previously required to implement and operate a virtual desktop environment is no longer necessary, which is a major benefit.”

VDI’s Decline

Gartner predicts that DaaS expenditure will increase from $4.3 billion in 2025 to $6.0 billion by 2029, representing a compound annual growth rate of 7.9%. Kumar noted that the VDI market is contracting as clients shift their on-premises workloads to DaaS.

The report highlights, “Gartner seldom encounters organizations planning new on-premises VDI deployments. Nearly all new implementations now leverage DaaS, with existing on-premises deployments either transitioning to DaaS or adopting a cloud control plane, aside from a handful of very specific, confined scenarios.”

DaaS’s attractiveness is largely due to its simplified deployment, streamlined management, and reduced costs:

• When using vendor-assembled and vendor-managed DaaS, the DaaS provider assumes responsibility for virtual desktop delivery. In contrast, VDI solutions require the customer to ensure user connectivity to virtual desktops.
• Organizations often incur a fixed monthly cost per user for vendor-assembled and vendor-managed DaaS, instead of consumption-based charges, which simplifies management and lowers expenses.
• VDI necessitates a virtualized server infrastructure, often managed by a separate team from end-user services or the digital workplace. DaaS solutions eliminate this requirement as workloads reside in the public cloud.
• Historically, many outsourced virtual desktop solutions were custom-built for individual clients. However, vendor-managed DaaS now offers scalable, multi-tenant solutions, enabling customers to delegate most virtual desktop management to the vendor, thereby avoiding high upfront costs and commitments associated with bespoke setups.

Despite these trends, Gartner does not foresee the complete disappearance of VDI. A significant number of organizations continue to operate on-premises environments, and some show hesitation in transitioning from VDI to DaaS.

Kumar commented, “Security-focused organizations are likely to be the primary holdouts. However, I observe a growing number of organizations embracing the cloud, and its adoption has become increasingly standard, contrasting with past resistance.”

Evaluating Total Cost of Ownership

Businesses weighing traditional PC acquisitions against DaaS must prioritize total cost of ownership. A key element swaying some IT decision-makers toward DaaS today is the integration of analytics and automation capabilities. End-user services such as DaaS frequently incorporate Digital Employee Experience (DEX) tools to provide analytics, automation, and self-remediation for employee devices.

Gartner calculates that the annual TCO for a laptop without analytics or self-healing features (in a standard deployment) is approximately $2,440 per device per year. Conversely, a laptop incorporating analytics and self-healing tools (provided by the DaaS vendor) has an estimated annual TCO of $1,936.

Automated support and self-healing features reduce the need for human intervention. As DaaS is delivered and hosted by a third party, customers avoid associated expenditures. Providers like Microsoft, or other DaaS vendors, handle the management, maintenance, and upgrades of your desktops, relieving your organization of these tasks.

Microsoft provides two primary DaaS solutions. The first is Azure Virtual Desktop (AVD), a more economical, self-configured DaaS option launched in 2019. It operates on a consumption-based model, excluding virtual desktop software licenses, meaning costs are tied to infrastructure elements like compute, storage, and networking. 

The second offering is Windows 365, a vendor-managed DaaS solution that streamlines certain virtual desktop management tasks, including the actual delivery of the desktop. Windows 365 operates within Microsoft’s tenant, not the customer’s, which simplifies setup for organizations without an existing Azure footprint.

Prominent DaaS providers also include AWS, featuring Amazon WorkSpaces; Omnissa (previously VMware EUC) with Omnissa Horizon; and Citrix, which offers both VDI and DaaS solutions. Kumar mentioned that Google Cloud primarily concentrates on virtual applications, not virtual desktops.

Prime Opportunity

Heading into 2026, DaaS is poised for substantial growth, presenting an unprecedented opportunity. Several factors point to an impending major PC refresh cycle: numerous laptops deployed during the COVID-19 lockdowns are now five years old and nearing the end of their warranties, and Microsoft’s discontinuation of Windows 10 support will further prompt upgrades of older hardware.

DaaS is also gaining traction due to the rise in global hiring, according to Dvir Shapira, Chief Product Officer at Venn, a provider of secure workspace software for remote workers. Venn itself exemplifies this trend. Shapira stated, “We’re recruiting individuals in Eastern Europe and South America. The talent pool there is excellent, and utilizing DaaS makes it significantly more cost-effective.”

Naturally, for the majority of organizations, DaaS is not an exclusive strategy. The challenge lies in determining which users should transition to DaaS and which should continue using conventional desktops and laptops.

Kevin Greenway, CTO of 10ZiG Technology, a specialist in thin-client and no-client endpoints, notes that DaaS adoption varies by company and industry sector. He explains that typical practice involves piloting DaaS with a mix of highly engaged or “noisy” users (those willing to offer feedback/complaints) and individuals from specific locations or departments.

These pilot groups usually consist of knowledge workers who depend on office and productivity software, such as communication and collaboration tools like Microsoft Teams, Zoom, or Cisco Webex.

Shapira from Venn indicated that DaaS deployment is typically selective across most organizations, with initial recipients often being users in influential or highly visible positions. He elaborated, “Executives and other high-priority roles frequently receive access to various endpoint options, including company-issued devices or personal devices with DaaS, as their productivity requirements are often prioritized.”

Deployment subsequently broadens to teams managing sensitive data, like developers handling Personally Identifiable Information (PII), and then to geographically dispersed or offshore teams who benefit from consistent access. Employment status is another consideration; for instance, full-time staff usually receive coverage before contractors, according to Shapira.

According to Gartner’s Kumar, DaaS setups are generally not ideal for users needing offline functionality, those in remote areas with unstable internet, roles demanding low latency, or users with highly intricate display needs.

The Influence of AI

AI is impacting every technological domain, and user devices are no different. Greenway expressed optimism about AI’s role within a DaaS ecosystem. He noted, “AI is designed for data center models, which fundamentally aligns with DaaS — workloads already operate on cloud-based data centers equipped with Nvidia GPUs.”

Kumar indicated that Gartner has not yet observed a significant impact of AI on virtual desktops. He stated, “Essentially, no, it is not currently having an impact,” adding, “It may well do so in the future.”

Shapira highlighted that the emergence of AI is necessitating increased desktop control. He explained, “The workforce is undergoing transformation due to AI. I believe virtually all developers are now incorporating AI into their development workflows, meaning AI is interacting with their codebase. This presents an additional layer of risk, which I think will certainly steer organizations towards environments such as DaaS or VDI, as IT progressively loses oversight of data movement.”

Kumar suggested that if DaaS faces a challenger, it would be cloud-native applications, such as those included with Microsoft 365. IT departments might opt to simplify Windows laptop management by delivering a browser, Teams, and the Microsoft 365 suite virtually.

He added, “Organizations capable of advancing to virtual applications instead of virtual desktops can achieve greater cost efficiencies due to lower cloud resource consumption and improved redundancy.”

Additional content by Andy Patrizio:

• Demystifying AGI: Artificial intelligence with human-like cognitive abilities
• Will Agentic AI Lead to the Demise of SaaS?
• Is Investing in AI PCs for Your Workforce a Wise Decision?