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Comparing Windows 365 vs. Azure Virtual Desktop

While Azure Virtual Desktop and Windows 365 both offer a virtual desktop service from Microsoft, major differences exist between an AVD machine and a Windows 365 Cloud PC.

Organizations that rely on desktop virtualization or are considering a transition to this technology should learn about Microsoft's virtual desktops options: Windows 365, announced in October 2021, and Azure Virtual Desktop.

Microsoft supports both services with its Azure cloud, but there are still some massive differences between them. For that reason, it's important to compare Microsoft Windows 365 and Azure Virtual Desktop (AVD), formerly Windows Virtual Desktop, based on features, licensing, support and other factors.

Understanding the Windows 365 offering

Windows 365's virtual desktops function as Cloud PCs, a single-user desktop application that uses Azure for virtual desktop deployment and storage. It resides in Microsoft's Azure cloud and is fully managed by Microsoft. Microsoft charges a fixed licensing cost per user per month -- similar to leasing a physical PC -- so customers pay for it whether it is in use for 50 or 500 hours. For this reason and a few others, Azure Virtual Desktop is more flexible and may be more efficient for large organizations.

Windows 365 has two core licensing options: Business and Enterprise. There are also four sub-options that these cores can be broken into -- basic, standard, premium and custom.

A chart comparing the features of different editions within Windows 365 Business and Enterprise.

The Enterprise option does not have the 300-user limit that Business does, and both have the same price per user.

Another critical feature of Windows 365 is that it runs in a Microsoft Managed Azure subscription, which adds the following considerations to the decision:

  • Organizations with an existing subscription cannot add Windows 365 to the current subscription.
  • Microsoft Managed fully manages the Business version, so there is no local admin. The Enterprise version does allow customers -- in this case, the IT department -- to manage networking.
  • Windows 365 offers very little flexibility compared to Azure Virtual Desktop.
  • It does not support Windows 10 or 11 Enterprise multi-session.

Windows 365 has the following cost and licensing requirements as well:  

  • An Intune license, charged per user is required.
  • An active Azure subscription is required.
  • Fees are determined per named user, meaning everyone will need an account, and customers will have to pay the fee whether the Cloud PC is in use or not. For comparison, AVD is a pay-as-you-go service and only charges customers for the time and resources that they use.
  • Azure Active Directory (AD) Domain Services is not supported.
  • Azure AD Connect is required.
  • A Windows 365 Cloud PC license, Business or Enterprise edition, is required.
  • A Windows 10 or 11 license is required.
The pooled desktop, or personal host pool, is a collection of nodes that an app runs on with a one-on-one relationship -- user to desktop.

Components and considerations for Azure Virtual Desktop

Azure Virtual Desktop differs from Windows 365 in many ways. It still provides a virtual desktop benefit to the user but in a more flexible manner. This flexibility comes with a greater need for administration and a larger workload for IT professionals.

Organizations can deliver Azure Virtual Desktop as a personal or pooled desktop.

Personal desktop

Azure's personal desktop functions similarly to Windows 365 Cloud PCs but offers the flexibility of pricing 'as you go.' It also allows for Windows 10 or 11 multiple user sessions. With the personal desktop approach, IT can do the following:

  • run existing Remote Desktop Services and Windows server desktops and apps to any computer;
  • enable virtualization for both desktop and apps; and
  • support Windows 10, 11, Windows 7 and Windows Server desktops in a unified manner.

Published pool desktop

The pooled desktop, or personal host pool, is a collection of nodes that an app runs on with a one-on-one relationship -- user to desktop. This approach is ideal for resource-intensive workloads. For instance, if a particular project has some compute-intensive requirements such as 3D design, IT can create a pool of nodes with those requirements and assign them to users. The settings, profile and data changes are still present after logout. IT can create these nodes manually or in batch and organize them in any way it needs. There is no limit to the number of pools. IT can easily scale published pool desktops, allowing the admin to add or reduce capacity.

IT can create AVD pools with a custom image or an Azure default with Windows 10 multi-session. AVD pools also support Remote App streaming. This turns AVD into a PaaS to deliver apps to users over a secure network, making it a SaaS node.

Perhaps the biggest drawback for AVD is the complexity that comes with this flexibility -- a bit of a double-edged sword. There are, however, plenty of integrators ready to help from third parties, including the following:

  • HubSpot
  • Nerdio
  • Workspot
  • Compete366

The pay-as-you-go pricing model allows customers to pay for compute time rather than pay hourly. If a user runs that virtual desktop for 9 hours a day for 5 days, the customer would pay for 45 hours. If there is a 3-day holiday and the AVD is not in use, there is no charge, unlike the per-user model in Windows 365. 

In addition, Microsoft offers a 'reserved instance' where a virtual desktop is reserved for dedicated use and paid for upfront for one year to three years. This can work well for customers with steady, predictable use patterns and can provide additional cost savings over standard pay as you go.

Another significant feature of AVD is that it allows customer management actions via the Azure portal, Azure Virtual Desktop PowerShell and REST interfaces. This enables IT to manage all OS versions and apps in one pane of glass.

The Azure Virtual Desktop requirements include the following:

  • a Windows OS license;
  • access to Azure Active Directory;
  • an Azure subscription;
  • domain-joined AVD machines; and
  • users sourced from the same AD connected to Azure AD.

Which is right for your organization: Windows 365 or Azure Virtual Desktop?

At this point, organizations should ask which of these technologies is right for their business goals. However, the debate isn't simply Windows 365 vs. Azure Virtual Desktop -- maybe neither of these services would be a good fit. They may not be a good option for organizations that:

  • have no investment or existing infrastructure based in Azure;
  • have fewer than 50 users, though this is not a universal rule;
  • have no administrators with Azure or virtual desktop expertise;
  • do not have a dynamic environment -- changes in apps for projects, deployment -- that is relatively stable; and
  • have relatively simple security and management considerations.

On the other hand, these two Microsoft services may be especially attractive for organizations that have:

  • a significant preexisting Microsoft investment including Microsoft Endpoint Manager, Intune, Azure, Azure Active Directory and other services;
  • no current virtual desktop investment in other products;
  • frequent desktop deployment and features such as remote app streaming and cloud-based management; and
  • a large remote or mobile user base with challenges maintaining patches and security.
A table showing the differences between Azure Virtual Desktop and different Windows 365 editions for factors such as management components and pricing basis.

Comparing different desktop virtualization services from Microsoft is an important topic for third-party virtualization vendors. One such example is Nerdio, an Azure and Windows virtual desktop integrator, which offers a helpful comparison calculator. Potential customers need to compare the cost models between AVD and Windows 365 to determine if a pay-as-you-go model will benefit their organization.

Some of the findings that Nerdio cites from this calculator include the following:

  • A Cloud PC environment versus a comparably-sized AVD environment showed 11% savings for Windows 365 over a 3-year instance.
  • Assuming a 50-hour workweek, the AVD pay-as-you-go and power off model is 9% cheaper than Cloud PCs.
  • AVD pooled desktops with reserved instances (RI) and multi-session hosts running 24/7 on three-year RI is 53% cheaper than Windows 365 running the same workload.
  • A deployment with users working 50 hours per week on pooled AVD with auto-scaling is 58% cheaper than a similar Windows 365 deployment would be.

Nerdio also has a cost estimator to help determine the total cost of ownership of Azure.  

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