Virtualization and software-as-a-service are two of the hottest trends in business technology. Why not marry the two? That's just what Citrix-backed start-up Desktone is doing.

Desktone plans to sell "desktops as a service" through service providers with Desktone's Virtual-D Platform, starting with business customers. Already, Desktone has signed up Verizon Businesss and European and Asian carriers as hosters, and IBM as a partner. Desktone streams just the graphical interface of an entire operating system -- Windows XP only for now -- and all of its applications to a PC or thin client from a service provider's data center, where all the computation takes place.

The service was designed mainly with business customers in mind. The premise is this: Even though virtualizing a company's desktops can save money, it can be still be labor intensive and expensive to implement virtual desktop infrastructures because such a strategy requires investment in storage and new servers as well as on-site management expertise via new staff or training. However, businesses could potentially outsource desktops to service providers on the cheap. Verizon hasn't set prices, but estimates it could cost roughly $75 per month per user, or about half of the cost of on-premise desktop virtualization according to Verizon's calculations.

In the Desktone model, all of a company's server-based apps like Active Directory and line-of-business software remain on-premise and communicate directly with the service providers' infrastructure via a secure Internet connection if needed to be accessed by an employee or referenced by another app. IT managers also get a Web-based console to manage virtual image libraries, monitor performance, and gain remote access into virtual machines for troubleshooting. And the connection broker technology that manages how client devices link up with virtual machines was built with the help of Merrill Lynch, which is using the connection broker for internal use but isn't testing the service.

Desktone and its early partners are still ironing out the wrinkles, and partners like Verizon won't likely be broadly selling desktops as a service until at least the end of this year. In interviews, Desktone and Verizon both promise high service levels, but since downtime means no access to computing resources, applications could be limited to non-mobile PCs.

Also, since the desktops as a service will be streamed over the Internet, some latency sensitive apps, like those heavy on video, may underperform. In order to make the V-Desktop Platform perform well as a service, Desktone CEO Harry Ruda says the company cobbled together some of the best pieces of SaaS architectures that deliver latency-sensitive data like streaming multimedia, and has done some tweaking of the Remote Desktop Protocol that's used to stream Windows, but says some work remains.

Ruda sees the use of re-purposed laptops as a stepping stone to a thin client architecture. Thin clients have been touted as desktop replacements for more than a decade, but have so far generally only caught on in niches. Until recently, they didn't support removable media like USB keys. And if thin clients aren't configured to behave like thick clients, users can become upset.

Verizon hopes that it can eventually sell Desktone's desktop virtualization in enterprise-wide deployments, but is starting small, so the successor to the old thin client model may remain in niche deployments for now. "The most obvious place to start is to focus on the rudimentary worker who's doing primarily Web browsing or who is working in the call center where three people use one computer over a 24-hour shift and there's not the use of extensive computing resources," says Verizon Business strategic director Kenny McBride.

Desktone will only offer Windows XP for now, but Vista is likely to come soon and the platform is architected in such a way that Linux or Mac OS could be offered down the line. However, Desktone is "hypervisor agnostic," so it could potentially use technology from Microsoft, VMWare or Citrix on the server side.

Verizon sees Microsoft is a potential competitor, and VMware has begun to work with Cincinnati Bell on virtual desktops. However, to maintain and guarantee quality of service, McBride says network providers will be the vendors of choice if desktops-as-a-service take off. "I see applications as a car," he says. "Everyone has a car, but who has the road you can drive on?"