The End of Virtual Desktops for RIAs.  RIA Tech Talk Episode #3

Todd W. Darroca (00:08):

Hello and welcome to the RIA Tech Talk podcast, brought to you by RIA Workspace. I’m Todd Darroca, and alongside me is Mr. David Kish. And together we’re on a mission to simplify the complex world of technologies for RIAs just like yours. Now in this podcast, we’ll be your tech guides breaking down those often confusing tech topics into plain and practical terms. So we hope you join us and in each episode as we dive into the late trends, we’re going to share some expert insights and also help you navigate the ever-changing world of RIA technology. So let’s get started. And we’ve got David Kish here, obviously. And so today we’re talking all about the end of virtual desktops. Dun, dun, dun. And what’s next for RIAs? So David, let’s bring you in here. So what’s the big problem and why is it important for the RIA that’s listening to take heat of this and take some notes down?

David Kakish (01:02):

Hey Todd, I really like that drum roll. That’s pretty

Todd W. Darroca (01:05):

Good. I know, right? Let’s see if we can add some audio in there. Audio’s sound effects.

David Kakish (01:09):

We’ll bring into problems next time with us. So, alright, well listen, this is definitely focused on the RIA, whether you’re an office manager, whether you’re the partner managing partner, chief compliance officer, chief COO, chief Operations officer. This is not geared towards an IT professional, right? We’re not going to get into the technical weeds if you’re an RIA with, let’s just say roughly between five and 25 employees, this is for you. This is important for you if you’re an RIA that’s already using virtual desktop technology or if you’re exploring what are some of the other technologies out there provided by other IT providers. And I’ll dive into some of the details, but it’s really an outdated technology and we’re seeing RIA a sort of flock away from that technology. But then we’re also seeing some people that are exploring what are some of the other options and there’s some really great salespeople out there selling it, and then I feel like people are falling for it. So I just want to talk about that and what are the options. So again, whether you’re using the virtual desktop technology or whether you’re exploring to use that, this is going to be really beneficial for you.

Todd W. Darroca (02:21):

Okay, so just to recap here, so hopefully by the end of this session, what you guys are going to learn from David is why so many RIAs are flocking away from this type of technology. And if you are exploring other options, why VDI and the cloud computer should be at the bottom of your list. And actually I wouldn’t even have it on my list if I were in your shoes. So let’s get started. So David, first question off the bat, obviously, what is a virtual desktops and what’s the big problem with virtual desktops for an RIA?

David Kakish (02:53):

Sure, sure. Yeah, the whole idea of a virtual desktop, and I want to say some people will use different like VDI or virtual desktop infrastructure or HVDI hosted virtual desktop infrastructure or a cloud computer. Some people might call it like Citrix workspace. And so a virtual computer, a cloud computer or virtual desktop, a hosted desktop depending on who you talk to, the whole idea is you’re not using your local computer’s operating system. It feels like the operating system for your local computer is actually hosted at a data center someplace. And so everything is happening someplace else and nothing is really happening local on your computer. Your computer is essentially a dump terminal. So when I talk about virtual desktop or virtual desktop infrastructure, that’s what I mean on that. So you log into your computer, your computer is a dump terminal, you’re accessing another computer that’s hosted at a data center someplace and your local computer becomes irrelevant.

(03:54):

So from a security perspective, it was kind of nice, it didn’t matter about the endpoint, but what’s happened, and for a while we were using this technology, but we really have not been using it for five plus years and we’ve moved people away from that. And I’m still shocked to see that people are still using that. And again, we’re seeing RIAs coming to us not wanting to use this technology. And this technology, to be fair still makes a lot of sense in the healthcare industry. It makes sense in some other verticals where you have a lot of what I would call like legacy software or server-based applications. And what I mean by that is a lot of the software applications for financial advisors and registered investment advisors today is web-based. And so you really don’t have a need for a local server or the virtual desktop infrastructure, but that made a lot of sense when you were replacing a local server to go to a cloud computer.

(04:54):

But that just does not make sense for so many people. And we’ve migrated away from that. And again, the two things that I see consistently is people coming to us that want to get away from it. That’s number one. And then number two, I see people that are exploring some options and there’s some IT providers out there that are really great salespeople, I got to give them credit, they’re very personable, they’re very nice, they’re doing all the right things. And I go, oh my goodness. When somebody goes with that technology, I’m like, even if you don’t go with us, it’s okay. Just don’t go with that technology, right? Yeah. So I see that quite a bit and I want to help and educate advisors and RIAs.

Todd W. Darroca (05:38):

So what is the big problem with VDI?

David Kakish (05:42):

Yeah, so for the people that are using it, they know that. So if you’re using the virtual desktop VDI technology, be patient a little bit. Let’s assume somebody doesn’t know what that is. So a couple of things that happens, one of the really big things that happens for an employee that’s using this technology, they’re like, hang on, am I using the local web browser or am I using a hosted web browser, right? Am I using the local browser or am I using the browser that’s sort of hosted in the cloud? And it’s hard for ’em to tell the difference between the two. A lot of the keyboard shortcuts that you and I use all the time are not available. They don’t work when it’s in a hosted environment. The other thing that happens is video and audio, there’s a lot of latency. So the whole economy has shifted to Zoom meetings and video meetings and things like that.

(06:39):

No exaggeration. And I don’t want to say the name of this firm, but a couple of weeks ago I was talking to them over a Zoom meeting like this and his audio just went out because he was using the virtual desktop VDI technology. And so what happens is, in theory, it was really good for security because separated and this and that, but because there’s all these problems, employees find workarounds. So they’re presenting, but they can’t present Zoom in a cloud computer environment or in a virtual desktop environment. So they’re using the local environment, zoom to present locally, but then they email themselves the files and the documents so they can access that. And they’re like, well, that defeats the whole purpose. The other thing that people don’t realize is you’re actually doubling up on paying for cloud resources and for Microsoft licenses. So when you think about something like Microsoft Outlook or Word or Excel, the way that Microsoft licenses, that is for your local computer, but then you can also have it hosted on a virtual desktop, but Microsoft makes you pay that again.

(07:50):

And so anyways, looking at that, you’re paying extra money, you’re not getting the benefits of the security that supposedly you were sold on. And the third thing is there’s a lot of problems with latency when it comes to video, when it comes to audio. And then people are constantly finding work around and people are confused like, am I local? Am I not? And here’s my recommendation. If you decide that you want to move forward with that, talk to two clients that are using that technology and say, how’s the video and how’s the audio? And that’s going to answer the question.

Todd W. Darroca (08:25):

So obviously a lot of people went to VDI, they adopted that it worked for them. So we’re talking about all the challenges right now. So why did they even go to VDI in the first place? What were the big advantages of going with VDI?

David Kakish (08:40):

Yeah, and the key word was what was the big advantage, right? Not what is the advantage. Now, again, I think if you go back in time, four or five plus years, there were big advantages. Number one is, so let’s go back in time. 10 years ago, a lot of financial advisors and RIAs had a server in their office, and that server was running server-based applications, think QuickBooks, think juncture, think Black Diamond, take the name of whatever software, and it was running locally on that server that they had in their office. And it made a lot of sense to say, you know what? Let’s decommission this server that’s sitting in our office and let’s have that server hosted in the cloud, but then to add security, let’s use that virtual desktop technology. So when you had server based applications and when you had servers in your office, it made a lot of sense, especially if you had multiple offices and especially if you had people that needed to connect in and access that. If you look at today, the vast majority of RIAs and financial advisors are using web-based applications. Some are still using server-based applications, but that’s less than 20%. I’d even say it’s even less than that. But if you don’t have a server-based application, there’s absolutely no reason for you to be using this technology anymore. And even if you are, there’s a better way to do that. And you don’t need to use Virtual desktop infrastructure or VDI or HVDI or cloud computer.

Todd W. Darroca (10:18):

So what do you, yeah, no, that definitely answers the questions of why people were using VDI or what was the big advantage of what kind of got there, that sparkly, shiny moment of, Ooh, I need that. So now my question is, so what do you recommend here?

David Kakish (10:37):

Yeah, so I want to put a quick disqualifier. We could set up people on VDI if we wanted to on a virtual desktop. We just don’t because it’s not that we don’t know how to do it or we can’t do it, we can. We just made a decision that does not make sense and we’re not doing it for our clients or prospects or anything like that. So if somebody comes to us and said, I want to move forward with this technology, we’re like, Hey, thanks, but no thanks, go find a different partner. That’s the decision that we’ve made. So here’s again, I want to keep it high level. I don’t want to dive too much into the weeds because I’m not talking to IT professionals. I could, but I don’t want to do it. I know that I’m talking to, if you’re listening to us, you’re a managing partner, you’re ACCO, you’re ACOO and so on.

(11:22):

You’re not unquote an IT professional. You’re dangerous enough to know what you’re doing, but not. So what’s interesting is you could run your entire business on the Microsoft 365 platform. And what I tell people all the time, and there’s a lot of people that are using the Microsoft 365 platform, I use this analogy all the time where it’s kind of like you have an airplane, but you’re driving that airplane, you’re not flying it. And in order to fly that airplane, you want somebody who can sit in the cockpit that knows what to do with all those gadgets. So if you think about most advisors today, they’re using the Office Suite Outlook, word, Excel, PowerPoint, maybe they’re using SharePoint. There’s so many other things that you can do that. So again, at a really high level, you can run your entire RIA securely and productively. You can run it securely and productively.

Todd W. Darroca (12:21):

It’s morning, David, are you sure you’re good here? I mean, man,

David Kakish (12:27):

I’m serious. It’s only water.

Todd W. Darroca (12:29):

I’ve got water in here. Water is Canada. Alright, so productively. There you go. Yes, yes.

David Kakish (12:36):

So you can run your entire RIA on Microsoft 365 in a productive and a secure way. Number one, you can use the office suite word, Excel, outlook, PowerPoint, right? No brainer. Number two, you can use email. You don’t need to have your email hosted with a third party like Redtail or Rackspace or something like that. The other thing that you can do is you can actually use email encryption and email archiving. Again, your RIA. You don’t need to pay for a third party tool like Smarsh, global Relay or somebody else to archive your emails and be compliant. You can if you want to, you don’t have to Microsoft Teams and the archiving that goes along with that. You can also use SharePoint for files and folders. We recommend SharePoint over OneDrive because there’s a lot more security that you can do. So you don’t need to have a third party tool like NetDocs or Citrix ShareFile or Dropbox or box.com.

(13:34):

And then you can use single sign-on for web-based applications. So you don’t have to have a third party tool like Okta. And then if you want to get some of the advanced tools, you could use features like data loss prevention and e-discovery for your email. So for example, data loss prevention. That’s where if I send out an email with a social security number or a bank account number, it’ll automatically detect it, encrypt it, and send it out. It can also notify your chief compliance officer endpoint protection for your computers and your iPads and your iPhones and your Androids.

(14:13):

Basically, you can put a security wrap around those endpoints because we know that you’re probably connecting when you’re at the office, maybe at home, maybe at a hotel when you’re traveling. So these are all things that I just mentioned that are part of your Microsoft 365 subscription. You might have to up your subscription from Business Premium to the enterprise or this or that, but you could run your entire business on that and you can be secure. So I know I’ve kind of, I guess Todd, I went through a list of things. Maybe I’ll come back to you. You might have some questions and

Todd W. Darroca (14:48):

The list you might have. So let’s stay at the level here. I’m in the plane. I’m not in the cockpit looking down, so keep it pretty high level. So how does it all work?

David Kakish (14:58):

Yeah, that’s a great question. So it’s a beautiful thing because the way that I do that, and I tell people I personally work very similar to an RIA and I’ll talk on a Windows computer, but it works on a MacBook exactly the same way. When I power up my Windows computer, I need to put the password for the encryption, my computer needs to meet my company’s IT compliance requirements. Do I have patch updates? Do I have an antivirus and so on. And so if it does, fantastic, it’ll let me connect. But again, to simplify it, I put in my, going back to your question, I’m getting ahead of myself. So number one, I power up my computer. Number two, I type in the password for the encryption. Number three, I put in my PIN to log into the computer. Once I’m in my computer, I open up Outlook, I open up Word, I open up PowerPoint and so on, and then I can access that.

(15:57):

All the software applications from Microsoft are installed locally on my computer. But then when I save a file or I save a document, it’s saved at my Microsoft data center in my own private cloud. So the files are indexed locally, but none of that is saved locally and it’s saved at the Microsoft data center. And what this allows me to do is I could be working on my computer in the office and then I can collaborate real time with you where both of us can be in the same Excel spreadsheet. And then if I go home and I want to work on my work MacBook, I can jump on and not miss a beat at all. So nothing is saved locally on my computer. It’s all saved at my own private cloud at the Microsoft data center. And I’m fully productive and it’s fully integrated. And I think that’s the beauty of it is it’s not like all these third party, it’s not a Frankenstein with all these third party tools, it’s all integrated, it’s all in one place, and I’m able to be fully productive and use all these tools. And again, it’s simple, right? There’s simplicity, but there’s a lot of advanced security that’s in the background too.

Todd W. Darroca (17:03):

So I use a Mac. So is it the same for the Mac user or is there different?

David Kakish (17:08):

Yeah, so for Mac users, you know how you have Office for mac, you would just go ahead and you would open Outlook for Mac, Excel for Mac, you would work, you would open up Finder, and that’s integrated with SharePoint. So you’d open up Finder and then you’d open up the file. But again, it’s saving it at the Microsoft data center, but it’s indexed locally on your Mac. So to answer your question, the experience is exactly the same. You’re not turning. So with virtual desktop technology, the one that people are moving away from your Mac becomes a dumb terminal because you’re remoting into a Windows virtual desktop. With this solution that I’m talking about, you’re using Mac and the full functionality of it, of your Mac. Again, you open up Outlook for Mac and your work email is there, you save a file, it saves it within Finder slash SharePoint and it’s saved at the Microsoft data center. It’s really a beautiful, simple integrated solution.

Todd W. Darroca (18:05):

Got it. So as we’re coming up to the end of the podcast here, can you real succinctly tell us what the key points again are when we talk about the end of the virtual desktops and what RIAs should do?

David Kakish (18:20):

Yeah, so again, I think what’s happened is the technology and some of the stuff that I’m talking about might seem a little bit sort of confusing, but I think a simple demo can, and maybe we should do that maybe next time we should just have a demo and say, Hey, here’s how it works. And rather than talk about it, maybe we show that, right? So maybe that’s a good idea. Maybe we’ll have that as a follow-up Todd, but put simply with the old virtual desktop infrastructure, VDIH, VDI, whatever you want to call that, that era is gone. I’m done. People are moving away from that. There’s a lot of challenges with it. It was good while it lasted. It’s been really, in my opinion, that era should have been gone like five plus years ago. The way that you can work today is you can fully leverage the Microsoft 365 platform to run your entire business, and you don’t need to have all these third party tools to do other things for your files, for your archiving, for any of that right there.

(19:19):

The big challenge that I see out there is not a lot of advisors and RIAs know about that, and not a lot of IT consultants and IT professionals know about that. The IT consultants and the IT professionals that know about this, they usually work with really big businesses or the enterprise. So think about companies with 500 plus employees, the IT consultants and the IT providers that work with what I would call small and mid-sized businesses, say zero to 30 employees. They don’t understand. They don’t know how to run some of these enterprise technology because if you’re not an RIA and you’re 10 employees, you don’t need to have all this. You’re okay with not having all this, what I would call big business security or big business IT compliance. But if you’re an RIA with even just four employees, you still need to have these things in place. Yeah, I know I could talk about this stuff forever, so it’s good that I pause and come back to you.

Todd W. Darroca (20:18):

Yeah, no, it’s always helpful. Again, what am I learning today? What am I taking away? Okay, great. Any last things that you want to make sure that somebody walks away with? Again, virtual desktops, they can always come to you to talk about it, but again, you’re moving them over to an alternative to keep them, I guess, in the game or ahead of the game and modernizing their tech. Anything else? Any final words from you?

David Kakish (20:43):

And I’ve seen this, we are really good at what we do, but we’re not like that classic great salesman where we’re like, ah, let’s send you some donuts. And you know what I’m talking about Todd, right? Like, ah,

Todd W. Darroca (20:56):

Yeah, I haven’t been sending donuts in a while though, David, but I got you. I gotcha.

David Kakish (21:03):

No, no. And I say this because I remember we lost a deal because they’re like, David, you’re great. We like your technology and all that, but Todd is local to my city, and he came in with some donuts

Todd W. Darroca (21:17):

Gotcha form

David Kakish (21:18):

With that, right? I’m like, oh my goodness. So whatever. From a salesmanship perspective, the other company, the other local company, did really well, which is great. And so what I would say is, number one, do they have other RIAs or financial advisors using that technology, right? Ask about that. And that’s key number two, if they do talk to them about their experience using that virtual desktop infrastructure specifically, what’s it like to make video calls and audio calls and how does that work? Those are the two things if you ask. I think setting all salesmanship aside, I think you’re going to get a lot of clarity around what that is, because what happens is they move forward with it and then they’re stuck because they signed a three year contract and they can’t get out of it. So they make the best of it and things like that. So anyways, so that’s my story with the donuts and that’s why I brought that up, Todd.

Todd W. Darroca (22:19):

Well, thank you so much, David. Hopefully next time we do our demo, we’ll have demo and donuts. That sounds like a pretty good next show. But hey, we want to thank all of you for listening to the RIA A Tech Talk podcast, brought to you by of course, RIA Workspace. For more podcasts and resources, go to www.riworkspace.com and check out that learning center. And feel free to reach out to us with any questions or topics you’d like to cover. We always want you to be engaged in the conversation, so if there’s a topic you want us to talk about, please just send it on over. And of course, stay tuned for more RIA Tech Insights in our next episode. So for David Kish, I’m Todd Darroca, and thanks so much for listening. We hope you have a wonderful day.

David Kakish (23:01):

Thank you.