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Windows 365 vs. Azure Virtual Desktop: Which Virtualization Solution Should You choose?

Dean Ellerby

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Windows 365

Both Windows 365 and Azure Virtual Desktop perform a similar function for end users, which is providing access to a Windows desktop. From the IT admin perspective though, they are fundamentally different solutions. In this article, we’ll walk through the major differences between Windows 365 and Azure Virtual Desktop so that you can understand which solution, if any, may be a good fit for your organization. 

Windows 365 vs. Azure Virtual Desktop: Technical architectures

One of the main benefits of Azure Virtual Desktop is its flexibility and customization capabilities. As for Windows 365, we’re going to detail the two flavors of it, Windows 365 Business and Windows 365 Enterprise.

Azure Virtual Desktop

There is no right way to configure Azure Virtual Desktop, although there are common approaches that have been adopted to provide a good admin and user experience. 

The typical architecture of Azure Virtual Desktop
The typical architecture of Azure Virtual Desktop (image credit: Microsoft) 

To support the most basic implementation of Azure Virtual Desktop, an organization needs: 

  • One host pool to host user sessions 
  • One Azure subscription to host the host pool 
  • One Azure tenant to be the owning tenant for the subscription and identity management 

While these are the most basic requirements, Azure Virtual Desktop’s flexibility permits organizations to choose to use multiple host pools and/or multiple subscriptions to support their business requirements. We also explained in a separate article how to secure Azure Virtual Desktop with Azure Active Directory Conditional Access

Windows 365 Business 

Windows 365 Business is the most basic and simple implementation of Windows 365. It’s the equivalent of buying a Windows PC from a store and handing it to your user.

There is no management overlay or control of the environment. For this reason, Windows 365 Business is aimed at small businesses (there’s a limit of 300 licenses) which are not interested in the management and control of their IT environment. 

Windows 365 – Microsoft Hosted Network
Windows 365 – Microsoft Hosted Network (image credit: Microsoft) 

Due to its simplicity, Windows 365 Business has no prerequisites. It is simply a case of purchasing a Windows 365 Business license for your users who require access to a Cloud PC.  

Windows 365 Enterprise 

Windows 365 Enterprise is considered the “standard” version of Windows 365. It’s designed for organizations that are interested in managing and controlling both the security and end-user experience within the environment.  

Windows 365 – Customer hosted network
Windows 365 – Customer hosted network (Image credit: Microsoft) 

There are several high-level requirements for using Windows 365 Enterprise: 

  1. An Azure subscription is required in which to host an Azure virtual network (VNet) for connection to on-premises resources or if you intend to use Hybrid Azure Active Directory Join within the environment. 
  2. A Microsoft Intune license is required to manage the Cloud PCs. 
  3. Each user must have a Windows, Intune, Azure Active Directory P1, and Windows 365 license to access their PC. This could be achieved by providing a Microsoft 365 E3 and Windows 365 license combination to your end user. 

Windows 365 vs. Azure Virtual Desktop: Features comparison 

In the tables below, I compare the differences Windows 365 Business, Windows 365 Enterprise, and Azure Virtual Desktop regarding Domain join, licensing requirements, management, and user experience.

Domain join 

Feature Windows 365 Business Windows 365 Enterprise Azure Virtual Desktop 
Domain Join Azure AD Join only Hybrid Azure AD Join with VNet support 
Azure AD Join 
Hybrid Azure AD Join with VNet support 
Azure AD Join 

Licensing and costs 

Feature Windows 365 Business Windows 365 Enterprise Azure Virtual Desktop 
Purchasing Direct from Microsoft Cloud Solution Provider (CSP) Direct from Microsoft CSP Enterprise Agreement (EA) Direct from Microsoft CSP Enterprise Agreement (EA) 
Licensing No requirements other than a Windows 365 Business license per user Each licensed user must have a Windows, Intune and Azure AD Premium license For similar functionality to W365 Enterprise, each licensed user must have a Windows, Intune, and Azure AD Premium license 
Networking Each Cloud PC is granted a maximum amount outbound (egress) data per month. Inbound (ingress) is not chargedData egress charges are managed via the customer’s Azure subscriptionData egress charges are managed via the customer’s Azure subscription
Limitations Maximum of 300 licenses per tenant No license limit No license limit 

Management 

Feature Windows 365 Business Windows 365 Enterprise Azure Virtual Desktop 
Desktop Provisioning Automatic provisioning
No customization
Automatic provisioning
Fully customizable
Manual provisioning
Fully customizable
Application deployment Available only with an Intune license per user Available (due to required Intune license per user) Available with an Intune license per user or device 
User Profiles Single user profile per machine Single user profile per machine
OneDrive for Business could improve end-user experience with Known Folder Move
Full multi-user profile support through FSLogix profile containers 
Windows Updates Default Windows Update for Business configuration in place 
Can be customized using Intune 
Intune configuration required to apply settingsAzure-managed updates or Intune configuration required to apply settings

User experience 

Feature Windows 365 Business Windows 365 Enterprise Azure Virtual Desktop 
Self-service Users can manage their device (reset, restart) on the Windows 365 portal Users can manage their device (reset, restart) on the Windows 365 portal  No native  portal for self-service management  
Administrator access All users are Local Administrators by default. This cannot be changedAll users are Standard Users by defaultAll users are Standard Users by default 
User Profiles Single user profile per machine Single user profile per machine 
OneDrivefor Business could improve end-user experience with Known Folder Move 
Full multi-user profile support through FSLogix profile containers 
Windows Updates Default Windows Update for Business configuration in place 
Can be customized using Intune
Intune configuration required to apply settings Azure-managed updates or Intune configuration required to apply settings

Windows 365 vs. Azure Virtual Desktop: Which solution should you choose? 

Windows 365 Business, Windows 365 Enterprise, and Azure Virtual Desktop all have a place in the new world of true hybrid work. But it’s important to be able to decide which to use, when, and why. 

For each, I’ll briefly describe some reasons why you’d consider choosing this technology for your organization. 

Windows 365 Business 

Here are the main reasons why your organization should opt for Windows 365 Business:

  • Simple to purchase 
  • Simple to administer 
  • Simple to set up 
  • Fixed cost 
  • Each user gets a personal desktop for themselves 

And here are the main reasons why you shouldn’t choose Windows 365 Business:

  • Limited to 300 users per tenant 
  • No cost-optimization options – each Cloud PC requires a user license 
  • Very limited customization 
  • Users are local administrators 
  • No monitoring capability 

Windows 365 Enterprise 

Here are the main reasons why your organization should opt for Windows 365 Enterprise:

  • Simple to purchase 
  • Simple to administer 
  • Fixed cost 
  • Each user gets a personal desktop for themselves 
  • No seat limit per tenant 
  • Users can be Standard users or Local Administrators 
  • Flexible configurations via Intune 
  • Monitoring via Endpoint Analytics 

And here are the two reasons why you shouldn’t opt for this solution: 

  • No cost-optimization options – each Cloud PC requires a user license 
  • More complex setup (compared to Windows 365 Business) 

Azure Virtual Desktop 

Here are the main reasons why your organization should opt for Azure Virtual Desktop:

  • Fully flexible configuration 
  • No seat limit per tenant 
  • Users can be Standard users or Local Administrators 
  • Monitoring via Endpoint Analytics 
  • Cost-optimization options 
  • Excellent partner ecosystem, for example, Nerdio. 

Here are the two reasons why your organization shouldn’t opt for Azure Virtual Desktop:

  • Much more complex setup (compared to Windows 365 Enterprise). 
  • May be more expensive in specific circumstances, without optimization. 

Summary

To summarize, Windows 365 Business is great if you need to deliver basic computing capability to a user, without any interest in how it’s configured. However, Windows 365 Enterprise is a better offering if you need to deliver basic computing capability to a user and you are interested in having a good level of control over the configuration of each desktop. 

As for Azure Virtual Desktop, it provides organizations with complete control of their environment. This opens up the possibility of fine-tuning the configuration for either high-performance workloads or cost-efficiency. 

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