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Windows 365 vs. Azure Virtual Desktop (AVD) – Comparing Two DaaS Products

The recently released Microsoft Windows 365 service and Azure Virtual Desktop (AVD) are both Desktop-as-a-Service solutions from Microsoft but there are several important differences between them.  In this article, we’ll take a deep dive into the similarities and differences between the services.  We’ll compare AVD and Windows 365 across several dimensions in detail and then summarize it all together in a side-by-side chart. Let’s take a look at the two services across 5 primary areas:

  1. Technical Architecture
  2. IT Admin Experience
  3. End-user Experience
  4. Licensing and Infrastructure Costs
  5. Cloud PC License Cost vs. AVD Azure Consumption

1. Technical Architecture of Windows 365

Under-the-hood, both AVD and Windows 365 leverage a similar set of Microsoft cloud technologies.  Technically, Windows 365 is built on top of existing AVD components but has a different transactional model (fixed price vs. consumption-based).

There are two versions of cloud PCs: Enterprise and Business.

Enterprise cloud PCs are designed for organizations who have invested into Microsoft Endpoint Manager and are using this powerful platform to manage their existing, physical Windows 10 desktops.  Enterprise cloud PCs require an Intune license for each user who is assigned a cloud PC M365 SKU.

Business cloud PCs are designed for individual users and very small businesses who typically go to their local Best Buy when they need a new PC.  Now, instead of visiting Best Buy, they can go to Microsoft and subscribe to a new cloud PC and have it ready to use in an hour.  Business cloud PCs do not require an Intune license and are managed entirely by the user, similar to a standalone physical PC.

The diagram below depicts the deployment architecture of both Enterprise and Business cloud PCs.

Enterprise Windows 365 Cloud PC Architecture

Enterprise Cloud PCs are Azure and Active Directory dependent.  An Azure subscription with a properly configured network is required with access to Active Directory that has Azure AD Hybrid Join enabled.  Azure AD DS is not currently supported and cloud-only, Azure AD join is not currently supported either.

The VM itself runs in a Microsoft-managed Azure subscription, which means admins don’t have access to it directly and are not incurring the cost of this VM in their own Azure subscription.  However, the VM’s network interface card (NIC) is “injected” into a vNet in a customer’s Azure subscription.  All network traffic enters and leaves the VM via the customer-managed vNet.  Egress transfer costs are incurred by the customer.

Since admins don’t have direct access to the VM running in Microsoft’s Azure subscription, all management tasks (e.g. software installation, patching, policies) are performed through the Microsoft Endpoint Manager portal.  

Enterprise Cloud PC pre-requisites:

  • Azure subscription with vNet
  • Azure vNet can access Active Directory domain controller (i.e. a PC can be joined to the domain).  Custom DNS servers, necessary routing, and firewall access to AD.
  • Azure AD Connect configured and running within Active Directory with AAD Hybrid Join enabled
  • Intune enabled on Azure AD tenant (each cloud PC user needs and Intune license assigned)
  • Admin setting up the initial deployment must be an Owner of this Azure subscription
  • Azure AD DS is NOT supported

Enterprise Windows 365 Cloud PC high-level setup steps (without Nerdio Manager):

  • In Microsoft Endpoint Manager create an “on-premises network connection” pointing at the vNet and provide AD credentials to join new VMs.  The network connection and AD credentials will be validated automatically.  This process may take a while to complete.
  • Upload an existing custom Windows 10 Enterprise image or use a clean Microsoft-provided gallery image
  • Create a cloud PC “provisioning policy” that combines an “on-premises network connection” with a desktop image.  Assign this provisioning policy to an Azure AD security group.
  • Add users to the Azure AD security group that the provisioning policy is assigned to

Enterprise Cloud PC user entitlement

  • Once the above pre-requisites and setup steps are completed, entitling a user to a cloud PC is very easy.  Simply assign a cloud PC license to the user via the Windows 365 Admin portal.
  • If the user is a member of a security group that’s assigned to a cloud PC provisioning policy and the network connection is “healthy,” a new cloud PC will start provisioning. It will take up to an hour for the cloud PC to be ready for the user to log into.

Business Windows 365 Cloud PC Architecture

Business Cloud PCs are VMs that run entirely in Microsoft’s Azure subscription, including the network interface cards.  The customer does not need to provide an Azure subscription. There is no Active Directory dependency since Business cloud PCs natively join Azure AD.  There is also no requirement of an Intune license.

Business Cloud PCs route all traffic through Microsoft-controlled network infrastructure and there is no way for admins to control the inbound or outbound connectivity to/from these VMs.  There is currently no way to assign static IPs to Business cloud PCs.  Since these Cloud PCs run in Microsoft’s Azure subscription and are not enrolled in Intune, there is no admin interface to manage them.  They can only be managed directly by the user, just like a standalone physical Windows device.

There are no pre-requisites and no setup steps needed for Business Cloud PCs.  Simply assign a Business Cloud PC license to a user in the Windows 365 Admin portal and the new desktop gets provisioned within an hour.  The user will get an email notification with login instructions to start using their new cloud PC.

1a – Control Plane

Azure Virtual Desktop and Windows 365 share the same global control plane running in Azure.  The control plane consists of things such as the web portal, gateway, connection broker, licensing, and diagnostics service.  All components are hosted and managed by Microsoft and admins interact with them via a portal or API while end users interact with them via the AVD and cloud PC client apps.

An agent application runs on each virtual desktop – AVD session hosts and Windows 365 cloud PCs.  This agent is responsible for communication with the Microsoft-managed control plane.  Microsoft manages the agent and updates it automatically.  The agent for both AVD and Windows 365 appear to be the same.

1b – Azure Subscriptions & Windows 365

Azure Virtual Desktop requires all session host VMs, FSLogix profile storage, and networking to be contained in a customer’s Azure subscription.  Microsoft manages the control plane components, while the customer is fully responsible for everything related to the session host VMs.  Costs are also incurred for all components based on usage at the customer subscription level.

With Windows 365, all compute (i.e. VMs) is contained in a Microsoft-managed Azure subscription.  This means that customers don’t have direct access to manage the VM resources, as they do with AVD, since these resources are not accessible in their Azure subscription.  They also don’t incur the costs associated with running cloud PC VMs at the Azure subscription level (more on this below).

There is a significant difference between Windows 365 Enterprise cloud PCs and Business cloud PCs.  Enterprise cloud PCs run in Microsoft’s Azure subscription, but their network interface cards (virtual NICs) are “injected” into the customer’s Azure subscription.  Business cloud PC VMs reside entirely within Microsoft’s Azure subscription with no components connected to any customer Azure subscription.

1c – Compute

Azure Virtual Desktop session hosts are regular VMs and can be deployed and used in a very flexible way with all the power of Azure.  These session hosts can serve up personal desktops, where a VM is dedicated to a single user, or pooled desktops where a VM can be used by multiple users who move between such VMs daily.  The cost of compute is incurred by the customer since these VMs run in the customer’s Azure subscription.  Since pricing for Azure compute is based on usage, auto-scaling can be used to significantly reduce the cost of VMs in an AVD environment.  Reserved Instances can also be used with AVD session host VMs.

A Windows 365 cloud PC is a VM that’s dedicated to a single user via permanent assignment (like personal desktops in AVD).  These VMs run in Microsoft’s Azure subscription, which means the customer is not responsible for the compute costs.  They are licensed via a Windows 365 cloud PC license and are based on a fixed per-user-per-month price.  Since IT admins don’t have access to these VMs directly from the Azure portal and the cost doesn’t depend on usage, concepts like auto-scaling and reserved instances don’t apply to cloud PCs.

1d – Storage

Azure Virtual Desktop session host VMs must have an OS disk attached to them.  These disks can be any Azure managed disk type (e.g. Premium SSD, Standard SSD or Standard HDD) and even an Ephemeral OS disk.  IT admins have full flexibility when it comes to the size and type of OS disk to use.  Auto-scaling can be leveraged to convert SSD disks to cheaper HDD disks while VMs are powered off. 

FSLogix profiles are typically stored in Azure Files shares, Azure NetApp Files volumes, or file server VMs.  Here too, IT admins have full flexibility around the type of storage and the size of storage to use in the AVD deployment, including what to back up and how.  All storage costs associated with session host OS disks and FSLogix profile storage are incurred by the customer via the Azure subscription.

Each Windows 365 cloud PC comes with a pre-defined amount of local SSD storage.  The cost of this storage is included in the cloud PC M365 license, and the OS disk object is located within Microsoft’s Azure subscription, which means the customer is not responsible for any Azure storage costs.  There is no flexibility around what type of storage to use and using auto-scaling is not possible since the cost is fixed.  FSLogix is not used with Windows 365 cloud PCs and user profiles are “native” and reside fully on the C: drive of the desktop.  This means that no additional Azure Files, Azure NetApp Files, or file server VMs are needed. There are limited backup and DR options available for now with cloud PCs.

1e – Networking 

Azure Virtual Desktop network routing and security is fully under the control of IT admins.  Session hosts are regular VMs that can be created on any virtual network in the customer’s Azure subscription and this vNet can be configured with all the flexibility of Azure networking.  This means that customers have full control of how ingress and egress traffic is routed, what IP addresses are used, VPN connectivity, etc.  They are also responsible for any costs associated with egress bandwidth usage.

The network configuration of Cloud PCs depends on whether they are Enterprise or Business.  Enterprise cloud PCs have the same capabilities, from a networking perspective, as AVD session hosts.  The vNet that they attach to resides within the customer’s Azure subscription and is fully controlled by the IT admin.  Network interfaces of cloud PCs are “injected” into the customer’s Azure subscription even though the VM resources they are attached to are in a different subscription.  Just like with AVD, all costs associated with networking are incurred by the customer.

Business cloud PCs don’t have the same network flexibility as Enterprise ones.  Their network interfaces are not injected into a vNet in the customer’s Azure subscription but are part of a Microsoft-managed network.  This means that routing, firewall security, VPN connectivity, and IP addressing cannot be controlled by the customer.  The costs of egress bandwidth usage are not customer’s responsibility and are included in the cost of licensing a cloud PC  (more on this below).

1f – User Profiles 

Azure Virtual Desktop leverages FSLogix profile container technology.  This allows users to roam from one session host VM to another while their user profile (contents of c:\users\username folder) follows them seamlessly. FSLogix provides lots of flexibility but comes at the cost of having to deploy at least one SMB file share to host the profile container VHD(X) files.  This is typically done with Azure Files, Azure NetApp Files, or file server VMs. 

Because Windows 365 Cloud PCs are single-session desktops dedicated to individual users, Microsoft removed FSLogix from the picture.  A user’s Windows profile is “native”, meaning that it is stored directly on the C: drive of the cloud PC, exactly as is with traditional, physical Windows computers.  This removes the complexity of having to configure and manage FSLogix and the associated overhead of having a SMB file share to store profiles centrally.  It also introduces some unique challenges in protecting users’ data (e.g. Documents and Desktop folders) and moving users from one desktop to another without losing settings.

1g – Identity

Azure Virtual Desktop currently requires Active Directory Domain Services.  This requirement can be fulfilled by using an existing Windows AD environment or by using the Azure AD DS PaaS service.  Native Azure AD join isn’t yet supported, but upcoming support was recently announced.

Windows 365 Enterprise cloud PCs require Hybrid Azure AD join.  This means that you need traditional Windows AD synched to Azure AD with Hybrid Join enabled.  Azure AD DS is not currently supported.

Business cloud PCs are natively Azure AD joined and do not require (or support) Windows AD or Azure AD DS.

Summary (Windows 365 & AVD Technical Architecture)

The IT admin experience varies greatly between Windows 365 and Azure Virtual Desktop.  AVD relies heavily on Azure management concepts and provides maximum flexibility while Windows 365 aims to simplify management by making it (close to) identical to managing existing physical desktop assets and leveraging the same set of Microsoft tools to manage physical and virtual PCs.

2a – Management Portal

All components of Azure Virtual Desktop are managed via the Azure portal, PowerShell, or third-party tools like the Nerdio Manager.

Enterprise cloud PCs are managed via Microsoft Endpoint Manager (MEM) and via the Azure portal for all networking.  Administration of Enterprise cloud PCs can also be unified via a single portal like the Nerdio Manager.  MEM allows management of cloud PCs at the OS level and above.  This means that admins do not have access to make changes to the underlying VM resources, they can only make changes to Windows and applications.  Virtual networking is managed via the Azure portal.

Business cloud PCs are not integrated with Endpoint Manager and do not have a dedicated management portal.  They can only be managed by the end user assigned to the desktop while logged into it.  Actions such as PC restarts can be performed by the user from the cloud PC web portal.  Admins can manage Business cloud PC license assignment with Windows 365 Admin portal and third-party tools like the Nerdio Manager.

2b – Operating System

Azure Virtual Desktop supports all current versions of Windows, including Windows 10 Enterprise (single session), EVD (multi-session) and Server 2012/2016/2019.

Windows 365 cloud PCs only support Windows 10 Enterprise (single session) since they are dedicated, non-multi-user desktops.

2c – Desktop Image Management

Azure Virtual Desktop can leverage all image types.  These include Azure Marketplace images, custom images, and shared image gallery images.  Session host VMs can be created from these images and be kept up to date by updating the image and then re-imaging session hosts to the latest version.  Images can be stored in one or more Azure regions for geographic distribution and resilience.  Images can use any supported operating system and be both Gen1 and Gen2 VM hardware.  There is no limit on the number of Azure images that can be used in an AVD environment.

Enterprise Windows 365 Cloud PC images support Microsoft-provided Windows 10 Enterprise OS or custom images stored in a customer’s subscription.  These images must be Gen1 VM hardware.  There is a limit of 20 custom images per Azure AD tenant.

Business Windows 365 Cloud PCs don’t support custom images and must be deployed from Microsoft provided Windows 10 Enterprise OS.

2d – Applications and Updates

Azure Virtual Desktop session hosts can be updated via Microsoft Endpoint Manager, through a golden image, or manually.  Applications can be delivered to session hosts via image updates, manual installation on host VMs, or using MSIX app attach.  The update and application delivery process in AVD is very flexible and can be fully automated.

Enterprise cloud PCs can be updated via MEM or manual methods.  Image-based software deployments are not typical without third-party tools like Nerdio Manager.  Also, MSIX app attach application delivery is not currently supported with cloud PCs.

Business cloud PCs can be updated with Windows update, manually by the user, or by using third-party management tools.

2e – Backup and Disaster Recovery

Azure Virtual Desktop session hosts can be backed up and protected in several different ways including Azure Site Recovery and Azure Backup.  This allows organizations to create a robust backup, DR, and business continuity strategy for their virtual desktop environment.

There is currently no native backup method for Windows 365 cloud PCs since they are not accessible to admins at the storage or hypervisor level.  Third-party, agent-based, OS-level backup methods can be used to protect cloud PCs.

2f – Monitoring

Azure Virtual Desktop includes robust logging, diagnostics, monitoring, and reporting capabilities.  Logs are generated by the AVD service and AVD agent running on session host VMs.  This information is streamed to Azure Log Analytics where it is captured and visualized with Azure Monitor workbooks.  Many third-party monitoring tools are available for AVD.

Due to the lack of hypervisor-level access to cloud PC VMs, monitoring is possible only via Endpoint Analytics, which is the same tool that can be used for monitoring physical endpoints.  Business cloud PCs do not currently have a monitoring interface.

2g – User Profiles

Azure Virtual Desktop leverages FSLogix for user profile encapsulation.  This allows users to easily roam between session host VMs without losing their user state between sessions.  Personal AVD desktops can be deployed without FSLogix, but even in persistent scenarios FSLogix profiles provide a valuable profile backup capability and make it easier to manage session host updates through images.  A SMB file share is required to host the FSLogix profile containers.  This can be an Azure Files share, Azure NetApp Files volume, or a file server VM.

Windows 365 cloud PCs do not leverage FSLogix and all profiles are natively stored on the C: drive.  This allows for simplified management since no additional SMB storage or profile configuration is required.  Without profile data redirection it is important to consider ways to back up user data.  One such strategy can leverage OneDrive to protect user data.

2h – Networking

IT admins fully control all aspects of Azure Virtual Desktop networking since it runs in a customer-managed Azure subscription.  Static IP addresses can be assigned, VPN tunnels configured, and firewall rules enforced.

Enterprise cloud PCs have the same network flexibility as in AVD deployments.  Business cloud PCs, on the other hand, do not have any network flexibility.  Microsoft fully controls the IP addressing, traffic flow, and security of Business cloud PC networking.

2i – Auto-Scaling

Azure Virtual Desktop greatly benefits from usage-based Azure pricing model and auto-scale can be used to drastically reduce Azure compute and storage costs – up to 75% of peak demand.  It is also possible to use Azure Reserved Instances to reduce costs and guarantee available capacity.

Windows 365 cloud PCs are priced on a fixed monthly basis.  Even if a user does not log into their desktop at all during the month, the desktop will cost the same as if the user logged into their desktop every day.  Therefore, the concept of auto-scaling does not apply to cloud PCs.  This has significant impact on cost efficiency in different use-cases.  

Summary (Windows 365 & AVD IT Admin Experience)

3. End-user Experience

The end-user experience is almost identical in Windows 365 and AVD.  Users connect to AVD sessions and cloud PCs using the same client app, which is available for Windows, MacOS, iOS, Android and as a HTML client.

Windows 365 is built on top of Azure Virtual Desktop global infrastructure and will be familiar to those with AVD experience.  When connecting to a cloud PC, a user authenticates to Azure AD using the AVD client and all cloud PCs that the user is entitled to appear in the feed.

Leveraging the same infrastructure as AVD provides users the advantage of a unified experience across Windows 365 and Azure Virtual Desktop.  Admins can control the resources visible to individual end-users and the user will see everything in a single feed using the same app.  The authentication and multi-factor experience will also be very familiar since it leverages Azure AD, which is used for M365 and AVD authentication.

3a – Connecting to Desktop

With Azure Virtual Desktop, users navigate to or download a client app from

Windows 365 cloud PC users navigate to and connect in the same way as AVD.

Step 1: Go to and log in

Step 2: Connect to cloud PC in the browser or download the Remote Desktop client app

3b – Printing and Scanning

Both Azure Virtual Desktop and Windows 365 cloud PCs support printer and scanner redirection via the Remote Desktop client app.  With AVD and Enterprise cloud PCs it is possible to configure network-based printing and scanning with a site-to-site VPN tunnel between the Azure vNet and local network that hosts the printers and scanners.  It is not possible to use network-based printing and scanning with Business cloud PCs since IT admins do not have control of the network where the cloud PCs reside.  Universal Print is Microsoft’s new cloud-based print solution that can be used with AVD and Windows 365 cloud PCs.  Several third-party products exist that help simplifies printing and scanning.

3c – User self-service

Azure Virtual Desktop has limited self-service capabilities for end-users.  For example, users cannot restart their own desktop VM or log off a hung session with the AVD client app.  Third-party tools, like Nerdio Manager, provide users with a self-service portal where such actions can be performed.

Windows 365 cloud PCs can be restarted by the end-user without the need to contact support.  A restart button is built into the cloud PC web portal.

Summary (Windows 365 & AVD End-user Experience)

4. Licensing and Infrastructure Costs

4a – Windows 10 Enterprise

Azure Virtual Desktop requires the user connecting to an AVD session to have an assigned Windows 10 Enterprise subscription license.  Windows 10 Enterprise can be purchased as a standalone subscription (e.g. Windows 10 Ent E3/E5/VDA) or be included as part of a Windows 365 suite subscription (e.g. M365 E3/E5 and Business Premium).  This Windows subscription license includes the usage rights of the AVD control plane and entitles the user to connect to Windows 10 desktops hosted in Azure.  All other costs are part of Azure infrastructure consumption (e.g. compute, storage, networking).

Both Enterprise and Business Windows 365 cloud PCs require a Windows 10 Enterprise subscription just like AVD desktops.  However, the compute costs are not purchased as usage-based Azure resources but rather as a M365 license SKU.

4b – Compute and Storage

Azure Virtual Desktop infrastructure costs are based on Azure consumption.  This includes the compute costs of running AVD session host VMs, the cost of OS disks and the usage of Azure Files for FSLogix storage.  All costs are based on actual usage.  If a VM is powered off, there is no compute charge.

Windows 365 cloud PCs are not purchased as Azure usage-based infrastructure.  Rather, they are purchased as licenses through Windows 365.  Each cloud PC license provides the user with a certain amount of compute, RAM, and storage capacity.  At general availability, there will be 12 cloud PC sizes ranging from 1 vCPU to 8 vCPUs, 2 GB to 32 GB of RAM, and 64 GB to 512 GB of storage.  

4c – Networking

Azure Virtual Desktop networking costs are incurred at the Azure subscription level where session host VMs run.  These charges typically include egress bandwidth, NAT gateway, VPNs, and Firewalls.

Enterprise cloud PCs require the customer to provide a network infrastructure within a customer-managed Azure subscription.  Therefore, all network costs are the same as with AVD.

Business cloud PCs do not leverage a customer-managed Azure network.  Therefore, all network related costs are incurred by Microsoft and are included in the monthly cloud PC license.

4d – Intune

Intune can be optionally used to manage Azure Virtual Desktop session hosts.  However, Intune is not required for an AVD deployment, and most environments are managed via images.

Enterprise cloud PCs require an Intune license.  Since Intune is the management interface for these cloud PCs, the Azure AD tenant must have an Intune license and each user who is assigned to an Enterprise cloud PC must have an Intune license assigned.  Intune licenses can be purchased standalone or as part of a Windows 365 package like E3/E5 and Business Premium. 

Business cloud PCs are not managed through MEM and therefore do not require an Intune license.

4e – Windows 365 Apps (Office)

Azure Virtual Desktop requires a subscription to Windows 365 Apps with Shared Computer Activation entitlement.  All Microsoft 365 packages that include Office Apps have Shared Computer Activation. Windows 365 Business standalone does not and, therefore, cannot be used in AVD.

Windows 365 cloud PCs are dedicated VMs and therefore do not require Shared Computer Activation.  Any subscription to Microsoft 365 is sufficient.

Summary (Windows 365 & AVD Licensing and Infrastructure Costs)

5. Comparing Windows 365 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.  In this section, 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 that a user needs.  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 cloud PC 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 a 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 desktop is 9% cheaper than a cloud PC 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 is 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 and personal AVD desktops are priced per-named user.  Meaning that a license or VM is consumed for every user to whom the Cloud PC license or AVD personal desktop VM is assigned – regardless of whether this user ever connects to the desktop.  Pooled 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 a pooled desktop environment will be even greater, when concurrency is considered, than presented in the table above. 

By putting it all together, we see that Windows 365 Cloud PCs are most cost effective when users need dedicated, persistent desktops and will be using them more than 50 hours per week.  With users who can be pooled together into AVD host pools, there is significant infrastructure cost savings to be realized by using auto-scaling. 

Here’s a complete comparative summary table: 





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)


Create desktop images from a single pop-up with just a few clicks. No need to Sysprep, capture, version or do any of the other complex Azure image management tasks. Nerdio Manager fully automates the process. Desktop Images can start with a gallery image, existing custom image, or even an existing VM. Images can be stored as custom or Shared Image Gallery integrated objects.

Duplicate desktop images by cloning them to either the same region or another Azure region. Make a clone before making major changes to the image so the changes can be tested without impact the production environment. All with one click.

Distribute desktop images to multiple Azure regions by selecting the locations where the images should be available. Can be enabled on new or existing images. A single desktop image VM can now be used to update AVD session hosts in all locations.

Schedule a recurring update to Desktop Images and automatically re-image host pools on a pre-defined schedule. System and application updates can be automatically applied after hours without manual intervention.

Schedule a regular refresh of a desktop image from Azure Marketplace using the latest patched version. Customize the image with scripted actions and have it automatically deployed to host pools for full end-to-end update automation.

Leverage native Azure backup to create versions of desktop image VMs before making changes and easily revert to prior versions. Take a backup of an image VM while powering it on to modify or manually trigger a backup at any time.

Maintain multiple version of a desktop image by retaining old versions during image updates. These version can be easily used to deploy session hosts in the future.

Modify and update production images and test them without affecting current production host pools that use these images. When updating an image, select for the new version to be created in “staged” mode. Designated test host pools can start using and testing this image right away, but production host pools will only begin using it when it is activated after testing and validation. The end-to-end process of image update, user acceptance testing, and deployment into production can be fully automated.

Ensure that users always log into a pristine, image-based session host by refreshing (re-imaging) used VMs after users log off. In single-user pooled scenarios, desktops will be automatically re-imaged when users log off. In multi-user pooled scenarios, session hosts will be re-imaged as soon as the last user logs off. This way, all hosts will be always kept up-to-date and in pristine state

Schedule a recurring update to Desktop Images and automatically re-image host pools on a pre-defined schedule. System and application updates can be automatically applied after hours without manual intervention.

When session host VMs are re-imaged, the VM name, AD computer object, IP address and DNS host name remain the same. No need to update other systems when re-imaging host VMs since they appear identical to external systems before and after the re-image process.

Before “sealing” the image (i.e. running “set as image” task) document any changes that were made. A report can be generated to show these changes and who made them.


Dramatically reduce Azure compute and storage costs up to 75% by precisely matching the size of Azure infrastructure to the user demand at all times. Nerdio Manager provides multiple auto-scaling algorithms based on CPU usage, RAM usage, user sessions, and user-driven behaviors. Multiple usage triggers can be combined (e.g. CPU and RAM) for precise scaling behavior.

Start VMs when users need them and stop them automatically when no longer in use. VM power management reduces Azure compute costs up to 75%.

Create new session host VMs on-the-fly, as needed, without keeping many VMs created and consuming storage costs by the OS disks. Newly created VMs are always fresh and based on the prestine image state. Add scripted actions to customize the VM provisioning process. When the VMs are now longer needed they can be automatically removed from the environment. A mix of “base capacity” (always created VMs) and “burst capacity” (just-in-time VMs) optimizes costs and user experience.

Auto-scale can start, stop, create, or delete session host VMs based on several auto-scale algorithms that take into account actual usage (e.g. CPU, current active sessions) and/or do so on a schedule to pre-stage capacity in expectation of users logging in.

Balance between cost savings and end-user experience by setting one of three scale in aggressiveness levels that controls the type of hosts can be scaled in (stopped or removed). High aggressiveness provides the highest savings and will forcefully disconnect even active users after end of work hours. Medium will stop host with disconnected sessions. Low aggresiveness will only stop or remove hosts that has no user sessions.

Create multiple auto-scale pre-stage settings to ramp up host pool capacity during certain days of week and times of days. In education environments multiple schedules can be used to turn on VMs based on a pre-defined class schedule.

Provide users with non-persistent, single-user pooled desktops that are used exclusively by a single user during the session then returned to the pool, optionally refreshed/re-imaged, and made available to others. This VDI host pool configuration provides significant savings as compared to permanently-assigned pesonal desktops.

Save up to 90% on Azure VM compute costs while testing an AVD deployment by creating session hosts as Spot VMs. Not to be used in production scenarios as VMs can be unexpectedly “evicted”. Easily convert VMs from spot to pay-as-you-go and back to spot VMs with this scripted action.

Save up to additional 60% on the cost of Azure compute by using Reserved Instances in combination with auto-scaling. Nerdio Manager will analyze prior auto-scale behavior and recommend quantity of CPU core reservations to purchase to take advantage of RI savings.

Host VMs shut down from inside Windows are in stopped, but not deallocated, state and continue to generate Azure compute costs. Nerdio Manager can automatically detect VMs in this state and deallocate them proactively.

Define “running” OS disk storage type (e.g. Premium or Standard SSD) and “stopped” OS disk storage type (e.g. Standard HDD). Auto-scale will change the OS disk to cheaper storage when it stopped and automatically change it to a more performance storage type when the VM is started. This results in up to 75% in OS disk storage savings when the VM is not running.

Save on OS disk storage costs and increase performance with Ephemeral OS disks that can be used for AVD session host VMs. Ephemeral OS disks are free and are stored on the Azure physical host’s local storage and are therefore faster.

Reduce the size of an image VM’s OS disk from the default 128GB to 64GB (or 32GB). This reduces storage costs for session host VMs by requiring a smaller disk and allows for use of smaller VMs with ephemeral OS disks.

Ensure high performance of Azure Files at the lowest possible cost. The performance characteristics of Azure Files Premium are determined by the provisioned capacity quota. Storage auto-scale increases capacity quota in response to increased storage latency (or on a schedule), and decreases it when the extra performance is no longer needed to save on costs.

Ensure high performance of Azure NetApp Files at the lowest possible cost. The performance of an Azure NetApp Files volume is determined by the volume size, regardless of capacity actually used. Storage auto-scale increases the volume size during times of peak demand (e.g. log-on and log-off storms) and decreases it automatically when the extra boost in performance is no longer needed. This is done based on a schedule and/or in response to elevated IO latency. Storage auto-scale also automatically grows volume (and capacity pool) size when capacity reaches a pre-defined threshold ensuring that it never runs out of space.

Shrink FSLogix VHD(X) by removing the “white space” from inside the profile container. This dramatically reducess FSLogix storage costs.

Automatically run Microsoft’s Windows 10 and Windows 11 virtual desktop optimization tool on session host VMs as they are created. This results in drastically improved performance and increased user-per-CPU density, which reduces total Azure compute costs.


Cloud PC License Usage Optimization

Reduce total cost of Windows 365 Cloud PCs by optimizing license assignment and reclaim and re-use unused licenses.

Extend existing AVD environments with Windows 365 Enterprise Cloud PCs. Nerdio Manager automatically creates the necessary network connections, images, and provisioning policies based on the current AVD configuration. It can also be used to deploy Windows 365 even if there is no existing AVD deployment.

Cloud PC device lifecycle management

Manage all aspects of Windows 365 Enterprise Cloud PCs. Restart, re-provision from image, resize to a larger VM size based on available licenses, end grace period when Cloud PC is no longer needed, and run any Powershell script on one or more Cloud PCs.

Cloud PC user group assignment

Create and manage Cloud PC provisioning policy and assign user security groups to policies to begin the provisioning process for licensed users.

Intune primary user management on Cloud PCs

Automatically detect if a provisioned Cloud PC does not have an assigned Intune primary user. Alert administrator and allow for one-click primary user assignment.

Leverage existing AVD images to create Cloud PC deployments. Image updates are automatically applied to AVD and Cloud PC environments using these shared images.

Scripted actions are shared between AVD and Windows 365 Enterprise Cloud PC environments. Scripts that install apps, apply optimizations, or anything else that can be scripted with Powershell can be applied to both AVD session hosts and Cloud PCs.

Migrate AVD personal desktops to Cloud PCs (Coming Soon)

Automate the migration process from a personal AVD host pool to an Enterprise Cloud PC. (Coming soon)


Enable host pool level active/active DR configuration and Nerdio Manager will automatically distribute session hosts across two Azure regions. Users will be distributed across VMs in both regions as they log in and FSLogix profiles will be automatically replicated using Cloud Cache. In case of an Azure region failure users will continue accessing VMs in the available region.

Auto-scale can automatically detect broken AVD session hosts and attempt to repair them by either restarting or deleting and re-creating the VMs without user intervention.

Protect against data center failure by automatically distributing session host VMs across Availability Zones (data centers) in supported Azure regions.

Azure availability sets of variable size can be optionally enabled. When enabled, session host VMs are automatically placed in availability sets when deployed.

Leverage native Azure backup to create versions of desktop images before making changes and easily revert to prior versions. Take a backup of an image while powering it on to modify or manually trigger a backup at any time.

Modify and update production images and test them without affecting current production host pools that use these images. When updating an image, select for the new version to be created in “staged” mode. Designated test host pools can start using and testing this image right away, but production host pools will only begin using it when it is activated after testing and validation. The end-to-end process of image update, user acceptance testing, and deployment into production can be fully automated.

Scheduled Nerdio Manager backup

Configure a scheduled backup of Nerdio Manager application by protecting App Service, Azure SQL database, and key vault contents.


Nerdio Manager is a single-customer Azure application deployed from the Azure Marketplace into a customer’s own Azure environment. It consists of Azure PaaS services only with no VMs to manage. The application is integrated into Azure AD and uses Graph API to turn the dials inside the Azure environment. No third-parties have any access into the customer’s Azure environment.

No third-party vendor access

Nerdio Manager is not a hosted SaaS service, but rather an Azure application that’s installed in a single customer environment. There is no third party access to this single tenant app deployment.

Data residency control

Because Nerdio Manager is an Azure application, customers can choose the Azure region where it is deployed. All associated metadata is stored in a selected Azure region with customer having full control over backup, retention, and destruction of this metadata.

Delegate access to deploy and administer Azure Virtual Desktop deployments to users with defined role-based access controls. Built-in AVD Admins can full access to the environment, Reviewers have read-only access, Desktop Admins can manage images and power state of host VMs, Help Desk users manage user sessions, and End-users can manage their own virtual desktop session in a self-service portal. Create your own custom RBAC roles and select Read-only or Full Access to all areas of Nerdio Manager, including limiting access to individual host pools.

Create custom roles to control admin access to all areas of Nerdio Manager. Custom roles define scope and level of access and can be assigned to users and security groups. Users can access modules in read-only or full access mode.

RBAC admin roles can be assigned to users and groups and proper level of access is provided at Workspace level and host pool. Different groups of admins can manage different sets of Workspaces and host pools within a larger AVD deployment.

Company-provided SSL certificate and domain name can be applied to Nerdio Manager for Enterprise Azure App Service to increase the security posture of the deployment.

Protect Nerdio Manager and AVD deployment by hardening the SQL, Key Vault, Storage Accounts, App Service by enabling private vnet endpoints in Azure.

Prevent Users from Using Saved Password in AVD Client App

Increase security posture of an AVD host pool by preventing users from using saved credentials in their AVD client app. Users will always be prompted for password when logging into their desktop.


Consolidated dashboard that combines usage, costs, and savings across all Workspaces in WVD deployment. Select desired time range and view graphs of named, concurrent, and active users. View graphs of host pools, hosts, and total CPUs. Review and export data on compute and storage costs savings.

Analyze Azure compute (VMs) and storage (OS disks, Azure Files and Azure NetApp Files) costs at per-hostpool, per-workspace and across the entire environment. Understand average per named, concurrent, and monthly active user costs.

Export detailed usage and costs data to be used for chargeback.

Review auto-scale behavior in an easy-to-understand, visualized dashboard that can be drilled into for more detail. All auto-scale behavior, including corresponding user sessions, can be reviewed for further optimization.

View project montly compute (VM) and storage (OS disks) costs when creating a new host pool. The real-time calculation is based on Azure pricing API and takes into account the entire auto-scale configuration profiles. This calculation provides the minimum host pool cost, assuming the pool stays at the minimum size and never scales out, and the maximum cost, assuming the host pool scale out to its maximum size and never scales in.

Azure list prices used for all calculations can be adjusted with a negotiated discount so all financial data accurately reflect actual Azure costs.

Be always in the know with automated notifications and alerts. Define rules to generate email alerts based on various conditions and actions. Select whom to notify based on tasks, statuses, resources, and other criteria.

Gain fully visibility into AVD environment that extends beyond the Azure Monitor Insights. User sessions dashboard provides a wholistic view into user performance that can be drilled down on a per-user basis to understand latency, app input delay, utilization patterns and more.

Hosts dashboard provides a deep analysis of VM performance and utilization (e.g. CPU, RAM, CPU queue, Disk queue, etc.) and displays recommendations for user-to-host density.

Application dashboard display per-application-per-user stastics to understand applicatino usage patterns, application resource consumption, and user behavior.

Track and report on all changes to desktop images performed by all users.


Leverage the power of Nerdio Manager automation by integrating with existing ITSM platforms (e.g. ServiceNow). Add and re-image hosts, create or update desktop images, control user sessions and much more.

Scripted actions provide limiteless flexibility in AVD deployments. Windows scripts can be used to execute any set of Powershell commands on VMs are created, started, stopped, remove, or re-imaged. This can be used to deploy applications, security software, optimizations, and much more. Azure runbooks can be used to configure and maintain the Azure environment on the outside of the VM. Many triggers are available including VM or AVD host create, start, stop, delete, image create, schedule, run-once, and more.

Synchronize scripted actions with Public and/or Private GitHub repositories. Use your favorite tools, like Visual Studio Code, to edit and maintain scripted actions with all of the power of GitHub workflows, versioning, and so much more. Scripted actions are automatically synchronized with GitHub repositories and any changes take effect immediately without any configuration changes made in Nerdio Manager.

Azure DevOps Integration with Scripted Actions (Coming Soon)

Synchronize scripted actions with Azure DevOps. Use your favorite tools, like Visual Studio Code, to edit and maintain scripted actions with all of the power of Azure DevOps workflows, versioning, and much more. Scripted actions are automatically synchronized with Azure DevOps repositories and any changes take effect immediately without any configuration changes made in Nerdio Manager.

Windows scripts and Azure runbooks can be executed automatically with security context maintained by Nerdio Manager during VM create, delete, start stop, and AVD host register operations.

Windows scripts and Azure runbooks can be executed on all hosts within a host pool either on demand or on a schedule with recurrence.

Automatically install software on newly created desktop images or maintain existing images with regular updates using Scripted Actions.

Execute Scripted Actions on desktop images while packaging the VM into an image object. These scripts do not impact the original image VM but only apply to the the resulting image. For example, SCCM agent can be uninstalled from the image but remain on the image VM where it is used to update and install software.

Leverage powerful scheduling capability to schedule any session host actions such as start, stop, add, delete, re-image, resize, activate, deactivate, run script, and more.

Health check probe for third-party tool monitoring

Get status of Nerdio Manager, SQL DB, Azure and AVD access via an unauthenticated URL. Can be used by monitoring tools to check environment health.

Define global variables that can be used by any scripted action. Variables are encrypted and stored securely in Azure Key Vault.

Nerdio Manager provides built-in integrations for popular desktop virtualization tools such as Teradici PCoIP, security and AV tools like Sophos, and much more.


Use Scripted Actions to install and manage applications on desktop images or during session host VM creation. Large library of popular software installations is included and gets updated on a regular basis. Create your own scripts to install and manage your own apps.

Applications installed on images or session hosts are automatically discovered and can be assigned to only some users and groups (whitelist) or be available to all users with exceptions (blacklist). Leveraging FSLogix application masking technology, apps are completely removed from user’s environment unless user is authorized.

Create MSIX images using msix apps, store them in an Azure Files based library with versioning, and deliver these apps seamlessly to users.

Upload native MSIX installer files and let Nerdio Manager automatically expand them into a VHDX container, capture all needed metadata, and make the app available for host pool attachment.

Upload multiple MSIX apps to be packaged together in a single VHDX image. Combining multiple apps in a single image reduces the number of VHDX files mounted on each session host VM and improves performance.

Upload and manage MSIX App Attach images to an Azure Files share. Update images to new versions and automatically apply to all host pools with existing assignments. Leverage images with multiple MSIX packages inside for more efficient app delivery.

Leverage native WVD MSIX App Attach integrations via the AVD agent. Assign MSIX packages to host pools from Nerdio Manager image library or use existing images storage on any SMB storage including Azure NetApp Files and file servers.

Upload and manage a library of self-signed or CA-issued certs that were used to package apps in MSIX format. These certificates can be automatically installed on desktop images or session hosts during provisioning.


Get Certified

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Secure Remote Work: Azure Virtual Desktop GTM Strategy

In this session, we will discuss how Azure Virtual Desktop and Windows 365 enable a secure remote workforce with a ZeroTrust mindset.

Available Webinars

The Economics of Azure: Building a Competitive Package
March 1, 2022 -
12:00 EST
Microsoft Azure: The Future of VDI
February 24, 2022 -
14:00 EST
Demystifying Microsoft Azure: Getting Started with Azure for MSPs
February 22, 2022 -
12:00 EST
Secure Remote Work: Azure Virtual Desktop GTM Strategy
February 17, 2022 -
14:00 EST
The Economics of Azure: Building a Competitive Package
February 15, 2022 -
13:00 EST
Microsoft Azure: The Future of VDI
February 10, 2022 -
14:00 EST