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Al Key - Denton Record Chronicle

Closure threatens city’s new computer system

Profile image for By Peggy Heinkel-Wolfe / Staff Writer
By Peggy Heinkel-Wolfe / Staff Writer

Plans to move Denton city employees from traditional computers to virtual desktops may take a sharp turn after a California supplier went out of business and its competitors divided its assets.

Denton’s investment in about $500,000 worth of new equipment could be at risk after that supplier, PanoLogic, closed abruptly in October, an investigation into local spending on Pano found. The University of North Texas at Dallas has also invested $93,000 in a Pano system for its student computer labs.

File-saving “in the cloud” and cloud computing — sharing computing resources in a network like any other utility — has become popular with some users. Since the computing power can be the most expensive part of a computer, some technology professionals are also experimenting with a return to mainframe computing. Workers get devices that look and work like traditional desktops, but all the data and software stays on computer servers in a central location.

Virtual desktops offer better security, compliance and manageability, and can help a business or governmental entity recover from a disaster quickly, analysts say.

But professionals with hefty computing power at their fingertips — cartographers working in geographical information systems, clerks and analysts working in multiple databases, executives streaming meeting video — sometimes find it more difficult to work through a virtual desktop. Technology experts, including the city’s technology staff, say virtual desktops aren’t practical for all users.


In Denton’s 2011 budget, Technology Services recommended that, as leases expired for personal computers, most of those machines should be replaced with a Pano. Pano “cubes” are wired and powered to hook a monitor, mouse and keyboard to a central computer, replacing the computer tower at an employee’s desk. Pano USB drives can serve as a secure, mobile version of the system for laptops. PanoLogic also has “app” software that allows users of tablets and other mobile devices to access their desktops.

To prove the concept, tech services acquired a starter kit from PanoLogic, according to Kevin Gunn, the city’s director of technology services. From 2009 to 2011, they used it to pilot about 20 virtual desktops through the city’s own servers. By the end of the pilot, the city had acquired 86 cubes and 180 USB drives for about $44,000.

After the pilot, tech services issued a request-for-proposals to reconfigure city servers and ultimately replace another 700 of the traditional computers used by the city’s 1,472 employees with Panos.

In February 2012, the city contracted with INX, a nationwide firm with a branch in Lewisville, for a four-phase installation of the virtual desktops. The contract provided $762,779 in equipment and services, and financed the contract for three years at 2.83 percent with Cisco Capital, according to documents obtained in an open records request.

Despite larger players in the field of virtual desktops, such as Microsoft and VMWare VDI, city officials specified PanoLogic, a small upstart, in their request for proposals. Panos were “very competitive” in price compared to devices offered by other companies, Gunn said. Plus, the other companies didn’t offer secure USB drives for remote access — a key feature needed for police officers and other city employees who don’t sit at a desk all day.

About $219,000 of the $762,799 contract provided for the central servers from Cisco. The remainder went to purchase Panos, the software bundle and the three-year contract for support.

Tech services set up the mobile version of the system with the police department first. Users access the servers with the same encryption that banks use, Gunn said.

PanoLogic published a case study of Denton’s deployment on its company website, one of many customer case studies that remained on the website after the company closed down. Denton’s case study described how instead of replacing existing laptops in police vehicles, tech services stripped the machines down to run Pano remotely. Moreover, both Paul Desjardins of Denton and Brian Walker of UNT Dallas gave video testimonials for Panos. Both videos also were still running on the website after the company closed down.


On Oct. 23, tech websites and San Francisco-area news outlets reported that PanoLogic abruptly shut its doors and laid off 50 employees. In the months that followed, the company didn’t file for bankruptcy, but reorganized through other legal channels.

The closure came less than a year into Denton’s three-year contract for support.

Former PanoLogic employee Brian Hutzler was hired by Propalms, another virtual desktop company based in the United Kingdom, after it acquired the inventory and agreed to continue support PanoLogic’s existing customers this month. Hutzler mans the phone for current customers needing tech support.

He said he believed the company would continue to provide support for Pano system users in the future. But Propalms didn’t acquire PanoLogic’s intellectual property. That went to Samsung.

“Propalms may or may not get the licensing from Samsung to continue,” Hutzler said.

Propalms has yet to make an official announcement of the acquisition. A request to the corporate headquarters in York, England, for comment was acknowledged but not fulfilled.

Messages left for Samsung’s U.S. public relations firm for comment were not returned.

Denton still plans to use the Panos and specialized software, but what the future holds is unclear, Gunn said.

“We are working on deploying them, and we intend to get a return on that investment,” Gunn said.

There haven’t been any updates or new features to the system’s software since October. The city never received notification of either the closure or the acquisitions. News about the company spread among other PanoLogic customers, who seem to be the most concerned about the intellectual property split, Gunn said.

If Propalms doesn’t continue with software updates and features upgrades, Pano users could have problems with system and application upgrades in the future, Gunn said.

For example, Denton isn’t considering switching to Microsoft Windows 8 operating system anytime soon. The Windows 8 operating system looks very different and has more of a consumer focus, Gunn said, referring to the debut of the Windows phone and laptops that can convert to tablet computers.

Delaying such upgrades for several years isn’t unrealistic, according to Desjardins.

Gunn isn’t sure what the city could have done to foresee the trouble. The Panos were acquired through a request-for-proposals process, which includes evaluating the financial health of the companies involved, he said.

Information technology managers also depend on reports from technology research analysts, such as those at Gartner Inc., Desjardins said.


Mark A. Margevicius, an analyst with Gartner, a nationwide information technology research and advisory company based in Connecticut, says virtual desktops offer better security, compliance and manageability than traditional computers. Some businesses, such as hospitals and banks, also value the continuity in virtual desktops, particularly how fast they can recover after a disaster.

So why aren’t more businesses switching?

Cost, for one, Margevicius said.

“Our clients are telling us that once you build in all the costs of virtual desktops, it costs 1.4 to 1.6 times more than PCs,” Margevicius said.

The cost of the devices — the cubes, USB drives and apps — may be less compared to a traditional computer, but they are the tip of the iceberg, Margevicius said.

“There’s security, storage, networking — and software licensing is more expensive in virtual desktops,” Margevicius said.

For now, Gartner is recommending to its clients not to throw good money after bad in relation to Panos. It may be a few years before the legal, finance and operations ramblings get sorted out, he said.

It’s also unclear whether Pano devices will survive in the marketplace, but those tech departments that can get two or three years out of them can recover some of their investment, he said.

“But you’ve got to be somewhat self-sufficient,” Margevicius said.

Clues to how long Denton can go may be found among those employees who request help with their Pano.

From January 2010 to November 2012, city employees made 461 requests for support on Pano devices, which represented about 3 percent of all calls on the department’s log.

In those calls, city employees often complained of slow performance and that when the Pano lost power, they were not able to log back in. Panos have a small power supply that can be overwhelmed when a user plugs in other devices, Gunn said.

Members of the city police department made more than one-third of those calls (137), most from police operations. Another third came from fire administration (84) and solid waste (72) employees, with 55 from fire operations.

During the trial period, one police department employee saw power drop to a trickle in trying to type and send e-mail.

“If I type a sentence, it may take 30-plus seconds to a minute for the characters to show up,” Susan Themar complained to tech services in March 2010.

Some problems persisted beyond the pilot and into the first phase of the contract, which included powering up the new servers.

An employee in Fleet Services asked in May 2012, after another employee retired, whether they could just switch and use that former employee’s old computer because the Pano froze up several times a day. That same month, an employee in Facilities Management reported being unable to use the device for four days. An employee in Solid Waste called one morning to see whether she should even try to log in, after all the trouble she had the day before. A solid waste department employee saw her Pano crash after she opened a database in June 2012. In October, the department asked to reassign a Pano that was installed in the training room, but it could never get it working.

Gunn said the department was still learning how to best deploy the Panos. For example, a municipal clerk needs to be able to run cameras and special printers with the computer, so they add a USB hub with extra power to make it all work.

Currently, Gunn estimated about 275 desktops in the city are virtual, with some using only a cube, others only a USB drive and others using both.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is