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How to Choose Between Windows 365 and Azure Virtual Desktop (AVD): A Business Perspective

“Is Windows 365 an oversized iPhone or a small laptop without a keyboard?” 

This was the question many were asking when the iPad was first introduced by Steve Jobs in 2010.  Today, more than a decade later, we know that it is neither.  iPad created a brand-new tablet computing category.  It didn’t replace the smartphone and didn’t make the laptop obsolete.  It created new use-cases and markets for tablet devices.  

With the introduction of Windows 365 in July 2021, a similar question is being asked.   

“Is Windows 365 a new type of virtual desktop or a replacement for a physical PC?”  

On one hand, Windows 365 Cloud PCs are virtual desktops similar to those delivered by Azure Virtual Desktop and other similar services.  On the other hand, it is a personal Windows device that is managed and behaves the way a physical device does.  Cloud PC is likely to create a new category of computing.  One that will complement both the physical PC and virtual desktop. 

In this article, I will compare Windows 365 to the existing Azure Virtual Desktop service that many are already familiar with and analyze several use-cases where Windows 365 is the right choice and somewhere AVD is the way to go.  In a future article, we’ll compare Windows 365 Cloud PCs to their physical equivalents.   

If you’re interested in a deep dive comparing Windows 365 to Azure Virtual Desktop across several technical dimensions like architecture, IT administration, end-user experience, and licensing and infrastructure costs then take a look at Windows 365 vs. Azure Virtual Desktop (AVD) – Comparing Two DaaS Products

6 use-cases where Windows 365 is a better fit than Azure Virtual Desktop

1. Fewer than 10 desktops 

If there are a small number of desktops in the IT environment, then Windows 365 Business is the perfect choice.  It does not require any pre-requisites like AVD does.  For example, there is no need for an Active Directory configuration or a storage location for FSLogix containers.  Therefore, from an ease of deployment, management, and cost-effectiveness perspective Windows 365 Business is a clear winner. 

2. No current/planned Azure footprint 

Some organizations have simple, cloud-only IT environments with Microsoft 365 and other SaaS products and no infrastructure footprint in Azure with no plans to add any such infrastructure.  In this scenario, Windows 365 Business is an excellent choice because it is easy to assign desktops to users and there is no administrative overhead for IT admins. 

3. No prior desktop virtualization experience 

Only a small fraction of Windows devices are virtualized today with technologies like AVD.  Desktop virtualization is a complex technology requiring a specialized skill set.  Many organizations do not possess such a skill set and are not looking to build it.  In this scenario, Windows 365 Enterprise is a great option.  It does not require knowledge of multi-session administration, profile encapsulation, auto-scaling, and other complex concepts found in AVD.  Instead, it provides a simpler way to deploy and manage Cloud PCs alongside existing physical PCs in much the same way.   

4. Current investment into Microsoft Endpoint Manager 

Organizations that have already made an investment into Microsoft Endpoint Manager to administer physical desktops and laptops will find Windows 365 an easy way to extend their existing environment with Cloud PCs.  Similar policies can be used to manage both physical and Cloud PCs. 

5. Personalized desktops and local admin rights 

Cloud PCs are designed to be dedicated, personalized VMs belonging to each individual user.  These users may need the ability to administer their own PCs by installing software or making other configuration changes that require local administrator rights.  Windows 365 Cloud PCs make it easy for IT to delegate administration of Cloud PCs to their users.   

6. Users need to access desktop 24/7 

Auto-scaling is a common way to save on Azure costs when using Azure Virtual Desktop.  Cloud PCs, on the other hand, run 24/7 and shutting them down does not save any costs.  If users need access to their Cloud PC on a 24/7 basis (or even more than 55 hours per week), then Windows 365 is not just easier to deploy and manage, it is also more cost-effective. 

3 scenarios where Azure Virtual Desktop may be a better fit than Windows 365 

1. RemoteApp application streaming 

Sometimes all that’s needed is a published application rather than a complete Windows desktop session.  In these scenarios using a full Cloud PC (or AVD desktop) would be overkill and a published RemoteApp application is a better way to go.  Since RemoteApps cannot be published from Windows 365 Cloud PCs, Azure Virtual Desktop is the preferred choice. 

2. High fluctuations of number of desktops needed throughout the month 

Windows 365 licenses are monthly subscriptions.  Once purchased, they are available for use and the cost is incurred regardless of users actually making use of their desktops.  In IT environments where numbers of virtual desktop users fluctuate throughout the month, AVD may be a better fit.  Azure Virtual Desktop infrastructure costs are only incurred when users are actually consuming the resources whereas Windows 365 costs are incurred as soon as a per-user license is purchased. 

3. Cost is primary consideration 

When cost is the primary consideration and pooled Azure Virtual Desktops can be used to consolidate several users on a shared VM, then AVD will be the better option since it will be more cost-effective than Windows 365 in this scenario.  On average, pooled AVD desktops are up to 58% less expensive than dedicated Cloud PCs.  Even auto-scaled personal AVD desktops can be up to 9% cheaper than Windows 365 equivalents if users only utilize their desktop 50 hours per week.  Finally, Windows 365 costs are determined by the number of users with assigned Cloud PCs, regardless of actual usage.  Azure Virtual Desktop infrastructure cost is determined by the number of concurrent users, which is often much lower than the total number of users assigned to desktops. 

Comparing Cloud PC license costs vs. AVD Azure consumption 

There are several considerations that come into play when deciding on the right virtual desktop technology for your organization.  Microsoft provides customers with ample choice and meets customers where they are in terms of admin tooling, existing licenses, and Azure expertise.  Here we’ll explore the cost efficiency of different virtual desktop use cases and determine when Windows 365 fixed-price licenses are more cost-efficient than usage-based AVD infrastructure costs.  For this discussion, we’ll assume that Windows OS licensing costs are the same in both AVD and Windows 365 scenarios and focus exclusively on the cost of the infrastructure. 

Windows 365 license costs depend on the hardware specs needed by a user.  Each desktop comes with a certain number of vCPUs, GB of RAM, and SSD storage.  If we align the vCPU and RAM configuration of each Cloud PC license with a comparable Azure VM size and managed disk we can then compare their costs side-by-side. 

Since Cloud PCs are dedicated, persistent desktops they are most similar to AVD personal desktops. If we compare Cloud PCs with equivalently sized personal AVD desktops, using a VM on a 3-year reserved instance, we’ll see that the prices are very similar and Windows 365 is slightly less expensive for some sizes and much more cost-effective for the largest VMs.  On average, Windows 365 is 11% cheaper than a comparably sized Azure VM and managed disk running 24/7 on a 3-year reserved instance. 

If we assume that users are using their personal AVD desktops 50 hours per week (10 hours X 5 weekdays) and the VMs are stopped the rest of the time, then there will be cost savings by using personal AVD desktops with pay-as-you-go VM pricing and powering them off outside of the 50 work hours (70% of the time).  There are a few scenarios when Cloud PC is about the same cost as an AVD personal desktop, but on average, Azure Virtual Desktop personal desktops are 9% cheaper than Cloud PCs in this use-case.  

Let’s take this a step further and assume that not all users need a dedicated personal desktop and groups of users can be pooled together on multi-session AVD session hosts.  We can see that there are significant per-user savings with AVD pooled desktops using Reserved Instances (RI).  On average, the cost of a pooled Azure Virtual Desktop user on VMs that run 24/7 using 3-year reserved instances is 53% lower than Windows 365

Combining pooled AVD desktops with auto-scaling provides the deepest savings when using Azure Virtual Desktop as compared to Windows 365.  Assuming that users are working 10 hours/day, 5 days/week the average savings is 58% when using pay-as-you-go VMs with auto-scaling. 

Another important consideration is that Cloud PCs are priced per-named user.  Meaning that a license is consumed for every user who is assigned to a Cloud PC – regardless of whether this user ever connects to the desktop.  AVD desktops, on the other hand, only consume infrastructure when concurrent users are logged in.  If no users are connected, no session host VMs need to be powered on.  As more users log in, more infrastructure is brought online to accommodate the demand.   

In most environments, user concurrency is a fraction of the total named users at any given time – often 50% or less.  This means that the cost savings in an AVD desktop environment will be even greater than presented in the tables above when concurrency is considered. 

In summary, we see that Windows 365 Cloud PCs are most cost-effective when users need dedicated, persistent desktops and will be using them more than 55 hours per week.  With users who do not need dedicated, persistent desktops, there is significant infrastructure cost savings by using pooled desktops and auto-scaling technology. 


Multi-Cloud and On-Premises Deployment with Azure Stack HCI (Coming Soon)

Deploy Azure Virtual Desktop in Azure and extend the session host VM placement to on-premises and other cloud using Azure Stack HCI. Nerdio Manager automates deployment of session hosts, AVD agent installation, and full integration into the AVD deployment in Azure.

Create a brand new Azure Virtual Desktop environment or allow Nerdio Manager to discover an existing deployment, connecting to existing resources, and manage them.

Deploy Nerdio Manager from Azure Marketplace and configure a new AVD environment with an easy to follow, step-by-step configuration wizard. First group of users can access their AVD desktop in less than 2 hours.

Service providers, system integrators, and consultants can leverage Nerdio Manager’s scripted AVD deployment template. Create complete environments with desktop images, host pools, and auto-scaling in minutes.

Create and manage AVD environments that span Azure regions and subscriptions. Quickly link Vnets and resource groups and manage AVD deployments world-wide from unified portal.

Link multiple Azure tenants under the same Nerdio Manager instance and manage AVD deployments that span Azure AD tenants. User identities and session host VMs can run in separate tenants for maximum flexibilty and security.

Deploy and manage AVD environments that span across sovereign Azure Clouds. Cross-sovereign cloud support allows identity (e.g. users and groups) to be in one Azure Cloud, while session host VMs are in another Azure Cloud.

Management of workspaces, host pools, app groups, RemoteApps & custom RDP settings

Administer every aspect of AVD with Nerdio Manager including workspaces, host pools, application groups, RemoteApp publishing, RDP properties, session time limits, FSLogix, and much, much more. Every Azure service that AVD relies on can be managed with Nerdio Manager.

Deploy and manage AVD session host VMs. Hosts can be created manually or with auto-scaling, deleted on-demand or on a schedule, re-imaged to apply updates, run a scripted action, resized, put into or taken out of drain mode, and more.

Manage user sessions across the entire AVD environment, within a workspace, host pool or on a single host. Monitor session status, disconnect or log off the user, shadow or remote control to provide support, or send user an on-screen message.

End users have the ability to log into Nerdio Manager with their Azure AD credentials and manage their own session, restart their desktop VM, or start a session host if none are started in a host pool. (Ability to resize and re-image own desktop is coming soon.)

Create, link, and manage Azure Files shares including AD domain join. Synchronize Azure Files permissions with host pools, configure quotas, and enable SMB multi-channel. Manage file lock handles and configure Azure Files auto-scaling to increase quota as needed.

Create, link, and manage Azure NetApp Files accounts, capacity pools and volumes. Configure provisioned volume size, monitor usage, and use auto-scaling to automatically adjust volume and capacity pool size to accommodate the needed capacity and latency requirements.

FSLogix configuration can be complex and overwheling, but not with Nerdio Manager. Create one or more FSLogix profiles with all the needed options, point at one or more Azure Files, Azure NetApp Files, or server locations and select from VHDLocations, CloudCache and Azure Blob storage modes.

Multiple identity source profiles can be set up and used automatically on different host pools. Active Directory, Azure AD DS, and Native Azure AD are all supported. Choose the appropriate directory profile when adding a host pool and all VMs will automatically join this directory when being created.

Create a copy of a host pool with all of its settings: auto-scale config, app groups and RemoteApps, MSIX AppAttach, user/group assignments, VM deployment settings, etc. Save time by creating host pool “templates” that can be cloned to any Workspace, Azure region or subscription instead of starting from scratch.

Apply user session time limits at host pool level. Automatically log off disconnected sessions, limit the duration of idle sessions, control empty RemoteApp session behavior and more.

Assign Azure AD users to personal desktops to ensure the user will log into a pre-configured VM. Un-assign personal desktops from users who leave the organization and re-use these VMs for new users.

Pre-configure custom Azure tags for all Azure resources associated with each host pool. Tags can be used for charge-back and cost allocation by host pool.

When creating session hosts using NV-series VMs NVIDIA and AMD GPU drivers are automatically installed.

Move existing host pools from Fall 2019 (Classic) object model to Spring 2020 (ARM) object model. Choose to whether to move or copy user assignments. Existing session hosts are automatically migrated or new ones can be created in the ARM host pool.

Automatically enable and configure AVD integration with Azure monitor. Zero configuration required. Azure Monitor Insights for AVD can be used instead of or in conjunction with Sepago Monitor.

AVD personal desktops to Windows 365 Cloud PC migration (Coming Soon)

Migrate users from AVD personal desktops to Windows 365 Enterprise Cloud PCs using an existing image and user assignment. (Coming soon)


Cloud PC License Usage Optimization (Coming Soon)

Cloud PC device lifecycle management

Cloud PC user group assignment

Intune primary user management on Cloud PCs

Migrate AVD personal desktops to Cloud PCs (Coming Soon)

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