.png)
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
In today's rapidly evolving IT landscape, enterprises are increasingly moving toward virtual desktop infrastructure (VDI) and Desktop-as-a-Service (DaaS) solutions to enhance flexibility, security, and cost efficiency. However, understanding the pricing models for these solutions can be challenging, especially when trying to forecast budgets and calculate total cost of ownership (TCO). This guide breaks down the various pricing structures, hidden costs, and key considerations for procurement leaders evaluating VDI and DaaS investments.
Understanding VDI vs. DaaS: The Fundamental Difference
Before diving into pricing models, it's essential to understand the key differences between VDI and DaaS:
VDI (Virtual Desktop Infrastructure) is typically deployed on-premises or in a private cloud environment where your organization owns and manages the infrastructure. This solution requires significant upfront capital expenditure and ongoing operational resources.
DaaS (Desktop-as-a-Service) is a cloud-hosted solution where the provider manages the back-end infrastructure. DaaS operates on an operational expenditure model with subscription-based pricing.
According to Gartner, "By 2024, approximately 60% of enterprise VDI deployments will be replaced by DaaS offerings from managed service providers, up from less than 15% in 2020."
Common VDI Pricing Models
On-Premises VDI Cost Components
- Infrastructure Costs
- Hardware (servers, storage, networking)
- Virtualization software licenses
- Management software
- Data center space, power, and cooling
- Software Licensing
- Hypervisor licenses (VMware, Hyper-V)
- VDI platform licenses (Citrix Virtual Apps and Desktops, VMware Horizon)
- Microsoft Windows Virtual Desktop Access (VDA) licenses
- Implementation and Support
- Professional services for deployment
- Internal IT staff costs
- Ongoing maintenance and support contracts
A mid-sized enterprise deployment of 1,000 virtual desktops can require an initial investment of $500,000 to $1,500,000, according to Enterprise Strategy Group research. Annual operational costs typically range from $200 to $400 per user.
DaaS Pricing Structures
DaaS providers offer several pricing models, each with distinct advantages:
Per-User Pricing
This model charges a fixed rate per user regardless of usage patterns. It's ideal for organizations with predictable user counts.
Example: Microsoft Windows 365 Business offers plans ranging from $31 to $66 per user per month depending on configuration.
Per-Resource Consumption
This model bases charges on actual resource usage (CPU, RAM, storage). It provides cost efficiency for organizations with variable workloads.
Example: Amazon WorkSpaces charges based on the bundle selected (ranging from $21 to $100+ per month) plus additional charges for persistent storage.
Tiered Subscription Models
Providers often offer different tiers based on performance requirements and included features:
- Basic tier: Suitable for task workers with light computing needs
- Standard tier: Designed for knowledge workers requiring moderate resources
- Premium tier: Configured for power users and specialized workloads like design or engineering
According to Forrester's analysis, DaaS solutions typically cost between $30 and $100 per user per month depending on the selected tier and additional services.
Hidden Cost Factors to Consider
When evaluating VDI and DaaS solutions, procurement leaders should account for several factors that can significantly impact the TCO:
For VDI Deployments
- Refresh Cycles: Hardware typically requires replacement every 3-5 years.
- Scaling Costs: Adding capacity often requires significant incremental investment.
- Disaster Recovery: Redundant infrastructure for business continuity adds substantial costs.
- Training and Expertise: Specialized IT skills required for management and troubleshooting.
For DaaS Deployments
- Network Bandwidth: Increased internet bandwidth requirements can necessitate upgrades.
- Data Transfer Costs: Moving data between on-premises systems and cloud environments.
- Integration Expenses: Connecting DaaS with existing security tools and authentication systems.
- Exit Costs: Potential expenses when migrating away from a provider.
A Wikibon study found that organizations frequently underestimate the total cost of VDI implementations by 20-40% by failing to account for these hidden factors.
Calculating TCO: VDI vs. DaaS
When comparing VDI and DaaS solutions, consider a comprehensive TCO analysis that includes:
VDI TCO Components
- Initial capital expenditure
- Ongoing operational costs
- Refresh cycles
- IT staffing requirements
- Downtime costs
- Scaling expenses
DaaS TCO Components
- Monthly subscription fees
- Network upgrade costs
- Integration expenses
- Professional services
- Customization requirements
- Compliance and security add-ons
According to IDC research, organizations that migrate from traditional on-premises VDI to DaaS typically see a 30-50% reduction in TCO over a five-year period, primarily due to reduced infrastructure and staffing costs.
Negotiation Strategies for Procurement Leaders
To optimize your VDI or DaaS investment, consider these negotiation strategies:
Multi-year commitments: Most providers offer significant discounts (10-30%) for longer-term contracts.
Volume discounting: Negotiate tiered pricing based on user count thresholds.
Hybrid deployments: Some workloads may be more cost-effective on-premises while others belong in the cloud.
Pilot programs: Start with a small proof of concept to validate performance and costs before full deployment.
Competitive bidding: Leverage multiple vendor proposals to negotiate better terms.
Performance SLAs: Ensure service level agreements include penalties for downtime or performance degradation.
Emerging Trends Affecting VDI and DaaS Pricing
Several trends are reshaping the virtual desktop landscape and its associated costs:
GPU Acceleration
The increasing demand for graphics-intensive applications has led to GPU-accelerated virtual desktop options, which typically command premium pricing. NVIDIA GPU-enabled instances can add $10-50 per user per month to base pricing.
Zero Trust Security Integration
As security concerns intensify, providers are embedding advanced security features into their offerings, often at premium tiers. According to Omdia research, security-enhanced virtual desktop solutions can command a 15-25% premium.
Containerized Approaches
Emerging container-based virtual application delivery models may offer cost advantages compared to traditional VDI. Gartner predicts these solutions could reduce infrastructure costs by 30% for certain use cases.
Conclusion: Making the Right Investment Decision
When evaluating VDI and DaaS solutions, procurement leaders should focus on aligning the selected pricing model with their organization's specific needs:
- Organizations prioritizing predictable budgeting may prefer per-user pricing models.
- Enterprises with variable workloads might benefit from consumption-based models.
- Companies with strict data sovereignty requirements may need hybrid approaches.
The most effective procurement strategy involves a careful analysis of current and future needs, a thorough understanding of pricing structures, and a comprehensive TCO calculation that accounts for both direct and indirect costs.
By approaching VDI and DaaS procurement with this framework, enterprise leaders can make informed decisions that balance performance requirements with budgetary constraints while positioning their organizations for future workplace evolution.