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Microsoft Drops the Cost of Licensing Azure Virtual Desktop (AVD) Deployments by 25%

Although not the case in every single deployment scenario, for the vast majority of Azure Virtual Desktop (AVD) deployments for SMBs, Microsoft has dropped the price by 25%!  As most Managed Service Providers (MSP) cater to the SMB market, this recent development will significantly decrease the cost per-user for the majority of their AVD deployments. 

Here, we discuss real-world virtual desktop deployments, the licensing needs of such deployments, and how a little known announcement Microsoft made a few weeks ago is reducing the cost of AVD licensing by 25%. 

What does a typical virtual desktop deployment look like for an SMB customer from a licensing perspective?  First you need the operating system license, which is either Windows Server plus RDS (in a Remote Desktop Services deployment) or a Windows 10 Enterprise subscription (in a AVD deployment).  We’ll be working with AVD here, so let’s assume that we need a Windows 10 Enterprise subscription to cover the cost of the OS and AVD functionality.  Windows 10 Enterprise E3 is $7/user/month and is the least expensive license that can be used for this purpose. 

What else does a Azure Virtual Desktop user need besides Windows 10?  The Office suite, of course!  Office can be purchased as a standalone product (e.g. Office 365 ProPlus or Office 365 Business) or as part of a package (e.g. Office 365 E3, Office 365 Business Premium, and Microsoft 365).  The tricky thing about Office is that with AVD (and RDS), you’re running it in a multi-session environment where multiple users are using the same virtual machine to launch the Office apps.  To enable such multi-session use, Office relies on a feature called “Shared Computer Activation” (SCA).  Until recently, only Office 365 ProPlus had SCA.  This meant that only enterprise Office 365 packages (e.g. E3, E5, etc.) could be used with AVD because only they include Office 365 ProPlus.   

In addition to Windows 10 Enterprise and Office ProPlus, virtual desktop users typically leverage Exchange Online, OneDrive, SharePoint Online, Teams, and other Office 365 services.  From a licensing perspective, it is always less expensive to purchase an Office 365 package than two or more of its sub-components.  This means that for most virtual desktop users, Office 365 E3 + Windows 10 Enterprise E3 was the most cost-effective option to license all needed functionality.  The cost?  $27/user/month ($20 for E3 and $7 for Windows 10). 

Let’s look at this visually.  You could buy Microsoft 365 E3 and get everything you need in a single package for $32/user/month.  Or, you could mix-and-match components, for example #10 + #11 for $27/user/month. 

Note that the key here is that Office 365 ProPlus must be included since it was the only version that supported SCA.  You can’t buy Office 365 Business Premium for $12.50/user/month, which includes Office 365 Business, since that version would not activate on a multi-session virtual desktop with SCA. 

With all of that in mind, what did the Microsoft announcement change?  Microsoft enabled Shared Computer Activation for Office 365 Business when it is purchased as part of the Microsoft 365 Business package

Prior to the announcement, it was not possible to use this specific package to fully license a virtual desktop deployment because Office 365 ProPlus was still needed for its SCA capabilities.  Now, Microsoft 365 Business can be used to license the entire AVD deployment: Windows 10 + Office suite + Exchange/OneDrive/Teams/SharePoint.  All for $20/user/month, which is $7 less than the best alternative available previously.  This is a 25% reduction in the per-user-per-month cost. One thing to note is that SCA is available for Office 365 Business ONLY when purchased as part of #1.  It is not available with #5 or even #3. 

But wait, there is more! Not only do you get Windows 10 and Office 365 for $20, but you also get Enterprise Mobility + Security (EMS), which is a suite of technologies to help with mobile device management and security.  Customers can have their primary desktop running securely in Azure with AVD and their local PCs, laptops, and mobile devices managed and protected via Intune. 

Microsoft is making many licensing and technology moves in advance of Windows Virtual Desktop entering general availability later this year that are all meant to drive demand for this IT delivery model.  It is likely that AVD with desktop VMs running in Azure and leveraging Microsoft 365 SaaS products will be the most cost-effective IT solution for small and mid-size businesses in the very near future.  This is a tremendous opportunity for the channel and specifically the MSPs who service these customers. 

At Nerdio, we enable MSPs to build successful cloud practices in Microsoft Azure.  Contact us to learn more.


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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