Virtualisation is fast touching data centres, but it's the desktop where the next round of advances is expected. For now, the offtakes of virtual desktops or online desktops appears slow.

A couple of strong-willed companies like Nivio and Red Hat are busy pumping money into research and development and marketing, so as to get the product right for the masses, but the buying proposition for online desktops is yet to be clarified to the 40 million internet subscribers in India.

Online desktops are best described as operating systems that keep all their information online. Using virtual desktop services, a user can take his PC environment to different machines (including mobile phones) without physically transferring data.

For instance, if he logs into a newly-installed computer, or is travelling, his PC environment will be waiting for him, with no set-up to redo. If you find moving information between machines painful, then consider using an online desktop.

"Thanks to online desktops, software and files no longer run on users' individual computers or local file servers. Instead, all applications, data, email and  are delivered from a managed data centre. IT is thus centralised and simplified, and all you need is an internet connection," explains Sachin Duggal, CEO, Nivio.

The company is offering a virtual Windows XP environment to users at Rs 399 (per month), where one can select software suites like Microsoft Office, Adobe tools, instant messengers, security software and multimedia applications, among others.

A Red Hat spokesperson says that the company is preparing to release in India this month the new Global Desktop that over time will grow into an online desktop, integrating online services into a client desktop platform.

Red Hat has teamed up with Intel for the platform. Local PC manufacturers will build the actual systems, which will target small businesses and governments in emerging economies, while the software will be made available on Intel's Classmate PC, a low cost notebook computer for students.

 "Integrating the online services with local data is what we will provide for our next-generation online desktop," explains the Red Hat spokesperson, adding, "We won't be recreating a Windows paradigm, but delivering a customised Linux desktop instead."

Red Hat has planned online Linux desktops in around seven regional languages in India, so that it can convince users and government institutions to invest money.

Nivio seems to have gathered some steam, having raised over $3.5 million through private equity. Earlier, the company had voiced its intentions of raising $5 million to fuel expansion, a search for investment that ended with AMD investing an "undisclosed sum" in R&D. Red Hat will also be announcing tie-ups in India to promote its global PC.

"We think that migration from local applications to rich, collaborative online services such as Google Apps and Flickr potentially represents a huge opportunity for open source on the desktop. So we're working to define and implement a contemporary desktop experience for this connected world," says the Red Hat spokesperson.

Also striking an optimistic note, Duggal says, "If you like web-based instant messengers, why stop there? Web-based operating isn't a bad idea either." Nivio targets registering 100,000 users by end-December 2007.

Nivio's business model will be structured on selling storage beyond the five gigabytes that comes free and selling subscriptions to a forthcoming enterprise version of the service. Duggal says his company works on the belief that IT should be a commodity accessible to all regardless of socio-economic circumstances.

But first, companies need to ensure that they bundle a broadband connection with the online desktop products. While Nivio is already working on the concept, Red Hat seems to have no plans to tie-up with internet service providers. One close competitor here would be Sify, which recently launched Sify Anywhere, which too works on the virtual PC environment idea.

One wonders: what is the real target market for the online desktop? Emerging markets may seem the likely answer.