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What Does Windows 365 Cloud PC Mean for MSPs? Here’s What You Need to Know

Tony CaiPartner Sales Executive
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Windows Virtual Desktop
July 20, 2021Articles

If you are reading this, you are probably aware of Satya Nadella’s keynote speech at Microsoft Inspire on July 14th, 2021, where he announced Windows 365 Cloud PC. To read the detailed technical overview of the product, visit Microsoft Windows 365: Introducing a New Product to End-user Computing and Windows 365 vs. Azure Virtual Desktop (AVD) – Comparing Two DaaS Products.

What is Windows 365 a nutshell? It’s Microsoft’s Desktop-as-a-Service (DaaS) solution made to be sold in a SKU-based fashion. It’s an individual persistent desktop offering in a few canned sizes running in Azure. Just like Microsoft launched Office 365 almost a decade ago, which came to replace all Exchange servers running on-premises, Windows 365 is meant to replace all fat client desktops as we know them.

I know what you’re thinking...here we go again; Microsoft is coming after MSPs by selling PCs directly to customers. So, where does that leave the business of managing desktops, networks, and servers for your customers? Instead of fearing the change that Windows 365 cloud PC is going to make, I would look at it as a huge opportunity - just like M365 provided a huge opportunity for MSPs to provide management services around security, consulting services, and project labor to get clients migrated to it. Every year, VDI vendors like to say, “this year is the year of VDI”, but now may be that time.  Microsoft has just made VDI mainstream with this announcement. Offering a true apples-to-apples offering to compete with AWS Workspaces and making it easy enough that anyone, regardless of their technical capabilities (or lack thereof), can purchase a virtual desktop from their Microsoft 365 admin account.

Where is the MSP Opportunity?

As an MSP offering services to customers, there is tremendous opportunity over the next decade to transition and leap into the world of providing virtual desktop services. Windows 365 is built on top of the Azure Virtual Desktop (formerly Windows Virtual Desktop) stack running exclusively on Microsoft Azure. If you have a cloud practice around VDI, you are in a good position to take advantage of this free marketing that Microsoft will generate with this new service. If you are not yet considering offering VDI services, it is not too late to start. If you are not currently offering VDI services, start now. Do not get caught not knowing anything about the subject and worst of all, not leading with VDI as part of your service offering.

Windows 365 is meant to be easy to purchase and procure but it is still NOT the lowest cost solution when it comes to offering a virtual desktop solution to customers. Since it’s built on top of the Azure Virtual Desktop (AVD) stack of technologies, AVD, if built optimally, is still more economical than the MSRP of Windows 365. This means that MSPs who take the approach to offer VDI strategically can leverage native Azure Virtual Desktop and come in at a price much lower than your competitors who are just plain reselling Windows 365 as a SKU with the standard distribution discount.

Windows 365 will come in two flavors; a Microsoft Endpoint Managed (MEM) version (Enterprise) and a Standalone self-managed version (Business). Most MSPs will gravitate towards the Enterprise version of Windows 365 since it is a more flexible and can be tied in with the rest of their existing Azure infrastructure. For those not familiar with Microsoft Endpoint Manager, MEM is a rebrand of two existing products coming together, Microsoft Intune + SCCM = Microsoft Endpoint Manager. Endpoint Manager will be a skillset MSPs will need to rush to acquire knowledge about rather quickly as it is a model gives the MSP the opportunity to manage the entire customers’ environment (virtual and physical) without using legacy RMM.

Less mature MSPs may be content with the Business version of Windows 365 and continue using legacy RMM tools to manage those customers’ Cloud PCs. Use cases for Windows 365 Business may be limited since it lacks basic network management. The opportunity for MSPs is to leverage Microsoft Endpoint Manager and offer policy, compliance, and security management, as well as consulting around the M365 stack.

From our speculation, since Window 365 hasn’t been released into General Availability yet, AVD pooled model will likely comes in substantially lower than its new Windows 365 cousin, especially when leveraging auto-scaling.

What about Hardware?

Of course, endpoint hardware is still going to be required to access Windows 365. You’ll see VDI specialized hardware become mainstream. Vendors like 10Zig, IGEL, and nComputing, whom have all created a business around providing thin and zero clients for VDI brokers have also strategically aligned themselves with AVD since launch will now play in the big leagues as they had an early start with AVD. In a way, big box vendors will need to change their messaging to catch up. The opportunity here is for MSPs to provide hardware-as-a-service. Thin and zero client physical endpoints should cost less than your average PC and typically will last longer than your average PC lifecycle. Many MSPs will start bundling in Windows 365 and pair it with hardware to be sold as a monthly package. If hardware breaks, it simply gets replaced and dropped shipped directly to the client reducing a lot of onsite visits for hands on repair.

Nearly a decade ago, MSPs were unsure of Microsoft’s direction with Office 365. Many saw Microsoft coming after the livelihoods of MSPs. Where would the revenue come from if we don’t have our clients’ Exchange Servers to manage? Now, it’s not even a question to consider when deciding whether to migrate a customer to M365 or not. Microsoft is here again to break the status quo. The PC chip shortage may be a temporary issue, but this is just one small reason what everyone should pay attention to Windows 365 Cloud PC. It will open many doors for partners all around the world.

MSPs who already have a practice around Azure Virtual Desktop should also very excited about this news since this legitimizes going to market with your existing AVD solution. AVD is still the lowest cost and most flexible solution available. Windows 365 will be free marketing for your existing offering; however, this will wake up a lot of your competition as well, as they’ll likely start jumping onto this bandwagon.

We are here to say take advantage of the momentum of this announcement. Train your sales and technical teams to be prepared to sell and offer these services on day one! The VDI revolution has begun, for real this time. Unlike other public preview offerings from Microsoft Azure, Windows 365 will not be able to be trialed until early August. Take this small Window to learn about how Nerdio can help you start, grow, and enhance your Azure cloud practice with support for Azure Virtual Desktop and Windows 365 on day 1.

Nerdio has been working with Microsoft engineering in shaping Windows 365 for well over a year before its launch, and we are the trailblazers in the Azure space for MSPs.  Nerdio is the easy button for Azure, Azure Virtual Desktop, and Windows 365 Cloud PC. If you’ve looked at Nerdio in the past, I urge you to look again! Contact us to get a 1-on-1 demo of our newest product, Nerdio Manager for MSP.

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