The "virtualisation" of the PC desktop will totally change the face of the PC and software industries within the next five years, according to analyst Gartner, writes Karlin Lillington

Calling the process "the most disruptive technology to face the PC in a decade", Gartner analyst and vice-president Mr Brian Gammage in London says PC and software companies will eventually no longer be able to compete on differentiation, and will instead be forced to offer their wares on the basis of price and service.

This is because virtualisation "decouples" hardware and software, enabling any operating system - and multiple operating systems simultaneously - to run on the same PC.

"This will have significant ramifications for the PC hardware, software and wider ICT services industries," he says.

PC virtualisation works by taking any PC running any operating system (called the host OS) and loading in a programme called a virtual machine manager (VMM), which emulates the basic functions of the PC.

Any operating system (the guest OS) can then be loaded onto the VMM, which manages it entirely separately from the host OS or any other guest OSes.

Software designed to run on any of the operating systems running on the VMM can be loaded onto the PC and will operate with the appropriate OS.

The virtual machine appears as a separate device - a virtual PC - to the overall computer network, if the machine is connected to a home or organisation network.

Virtualisation may sound futuristic, but the concept is not new and implementations of the idea actually have been around for some time. Both mainframes and more sophisticated servers can run a number of operating systems in different hardware partitions, each given its own virtual processor and storage space, appearing to the computer's system as independent OSes.

Home PC owners can also use a couple of virtualisation programmes, VMWare and Virtual PC. Virtual PC is perhaps the best known, having been used by Macintosh users for many years. It creates a virtual Windows environment on a Mac, enabling a Mac user to run PC programs within a separate PC window that opens on the desktop.

But Virtual PC can also be loaded onto a Windows PC to create a separate virtual Windows machine on the device. Both programmes operate by running a virtual desktop on top of the existing OS, rather than on a separate virtual machine that talks directly to the hardware, however.

The fact that Microsoft recently bought the company that owns Virtual PC - which in general has been viewed by PC users as "just" a Mac users' product - is a sign that the software giant is probably already preparing for a future when users will routinely run virtual desktops, including different desktops running the same OS, on the same device, says Mr Gammage.

Confusing? Then consider that security issues, and migrating to new versions of operating systems, are two major headaches and cost-drivers for organisations, says Mr Gammage.

A virtual environment enables total control by the organisation over the main corporate desktop environment on an employee PC, while leaving another open for the employee to install personal software or a favourite screensaver.

In addition, unlike multiple-operating systems installed into separate hard drive partitions, the virtual desktops will all run at the same time, in separate windows.

"The employee gets to use a virtual platform that always looks the same," he says.

In addition, "there are now two environments - so the employer can lock one down, and leave the other open." This eases IT management, since the locked down environment - which would run key business applications, have access to databases and host the corporate intranet - can be completely controlled in isolation from the user's personal, open desktop.

The open desktop would allow the employee to add software and devices and personalise the desktop's appearance.

Already, ultra security-conscious organisations like the US National Security Agency run a virtual corporate network that is locked down and separate from the employee desktop environment, he says.

Virtualising the desktop fits the growing trend towards outsourcing the management of corporate IT, he notes, as the entire network could be securely managed from a distance.

Microsoft's introduction of its new version of Windows, code-named Longhorn and due out in three years, will really push virtualisation, Mr Gammage says.

"Longhorn will be the hardest migration we've seen since Windows 95," he says. "Microsoft really needs to do whatever it can do to ease the pain, and it makes sense that they're beginning to prepare the market." Extra security elements in Longhorn mean many existing applications will not run on Longhorn, making the transition to the new OS especially challenging for businesses.

Interestingly, copies of Virtual PC are already included in enterprise agreements for Windows, Mr Gammage says, meaning corporate desktops will be able to run two Windows OSes - presumably the existing version of Windows and the new Longhorn - when it arrives.

Also, Microsoft has quietly begun to change the terms of its licensing agreements with businesses. To date, a licence has been required to run a single copy of an operating system on a PC. "But Microsoft has changed the licensing for certain kinds of organisations. If you're running XP Professional for 2,000 seats (computers) or more, you can install two copies for the same PC," Mr Gammage says.

But the virtualisation model means any OS could run on the PC, leaving opportunities for Linux and other OSes. Apple is probably not going to be a contender for the business market through the virtualisation move, however, he says, having chosen a "lucrative niche" targeting home-users rather than organisations.

Chip manufacturers are gearing up for the shift to virtualisation too. Today, running virtual desktops is demanding on the system software, requiring a sacrifice of about a 10 to 15 per cent in operating efficiency.

But companies like AMD and Intel are working on chips that will shoulder some of this work, which will improve the performance of virtualisation software.

What does all this mean for the existing software and hardware industries? "The long term view is that what you're really interested in is not the PC, but the virtual machine," says Mr Gammage.

The VM doesn't even need to be on a PC. "Maybe this is a way of making a much smaller device, or a much different device," he says.

Virtualisation will also bring hardware and software standardisation: "Product differentiation has just been removed." On the hardware side, that means companies like Dell should benefit, because organisations will look for low prices and service from large manufacturers.

"This has to be a trigger for another round of consolidation in the PC industry," he says.

On the software side, small software producers could find large markets by producing feature-rich software built on open standards. But all software companies will have to rethink such givens today as licensing arrangements where organisations pay for the numbers of users running the software.

"This absolutely challenges the licensing paradigm," Mr Gammage says.