Microsoft Announces Windows 365 Cloud Desktop At Its Inspire Partner Event

By Patrick Moorhead - August 6, 2021

Microsoft recently held its annual partner event, Inspire, where it announced new features to its 365 suites. Many of these new changes are solutions to how the business world has pivoted over the last 18 months towards a remote-hybrid work environment across all business and enterprise areas. Last year's Inspire event was in the middle of the COVID pandemic, and Microsoft's focus was on returning to the workforce and schools with inspiring and innovative tools and features. You can read my coverage of Microsoft's Inspire event from last year here

If you are a follower of my content, you are most likely familiar with the digital transformation technologies that are reshaping businesses swiftly and without looking back. The COVID pandemic and the need to Work From Home (WFH) have both been catalysts in making full digital transformations in just about every business area. Microsoft has been refining its 365 suite over the past couple of years and this week announced its new Cloud PC offering for business. Let's take a look at what it is and what it seeks to accomplish. 

Remote Windows desktop isn’t a new concept and can be accomplished many ways so I was most interested in what makes Microsoft’s more unique aside from owning the OS and zero dollar COGS.  

Solving the hybrid paradox 

The Cloud PC is one Microsoft solution to solve the hybrid work paradox, which, simply put, is a paradox where workers want flexible remote work options and in-person collaboration simultaneously. This paradox makes it difficult for organizations to quickly provide a secure work platform while also giving employees the freedom to work remotely or in the office. Post-pandemic, people realized that workflows can be done outside of the office and still be productive. Solutions to this paradox have been to bring a work device home to use or only work from home. Organizations then face the problem of having employees work over insecure networks.  

Windows 365 helps solves this paradox by offering organizations full Windows 10 or 11 platforms to stream from the cloud. Windows 365 offers organizations the ability to give employees cloud PCs connected securely to the work network and accessible anywhere there is a Wi-Fi connection. It’s more secure as no data actually resides on the client device as a video is streamed of the session resident in the Azure cloud. The same work environment with the same applications, tools, settings, and personalized Windows, and users can take it home and pick up where they left off. Microsoft says each Cloud PC provides an instant-on boot experience. Since the only reliable connection the user needs for the cloud PC is the user's connection to the PC and not the PC's connection to the internet, it has fast and reliable speeds. Microsoft says users can stream personalized applications, tools, data, and settings from the cloud across PC, Linux, Mac, iOS, or Android platforms, with many of these platforms having applications to them.  

Access all apps, data, and resources in the Cloud PC on any device. MICROSOFT

Windows 365 is a simpler iteration of Azure's Virtual Desktop (AVD). Where AVD is a more flexible virtual desktop infrastructure that gives IT maximum control, Windows 365 is simple with a personalized Windows 10 experience. While AVD is priced based on consumption, Windows 365 has per-user pricing. It is also easier for IT to manage and assign Cloud PCs by categorizing and assigning need-specific Cloud PCs to employees. Admins can also scale up or down a user's Cloud PC based on need at any point. I like the two options as smaller businesses want a simpler experience with less knobs and gauges.  

Windows 365 wants to provide simplicity and security 

Windows 365 scales processing power based on a user's needs with different computing, storage, and business app iterations. Microsoft says it will offer a Windows 365 Enterprise edition and Windows 365 Business edition with simplicity on IT to choose and configure the right Cloud PC iteration being the primary difference. Microsoft says Enterprise IT can use Microsoft endpoint manager to manage and deploy Cloud PCs for their organization. Small businesses can use a simple, self-service model so that no experience in virtualization needs. Cloud PCs and regular PCs show up alongside each other on Microsoft Endpoint Manager. Microsoft says you don't need to learn new IT tools to manage Cloud PCs. Windows 365 also offers data analytics to monitor the health and performance of user's PCs. Microsoft says its Watchdog service continually run diagnostic checks to ensure connections are running at all time. This is new and differentiated. 

When I asked Microsoft about the lack of GPU configurability, they told me that this is coming. This is good as without GPUs, you wouldn’t want to provide the service to anyone with a workstation doing complex development, 3D modeling or even programming.  Finally, IT can change configurations on the fly, up or down, based on how a user uses the service and I thought that was valuable as it saves money and delivers an optimal experience. I’d like to see this feature automagically upgrade or downgrade users in a similar fashion to “auto balancing” of cloud workloads.  

Microsoft's Endpoint Manager gives an overview of all devices in the Cloud and On-prem. MICROSOFT

Since Cloud PCs have a continuous connection to the work network, so there is no need to worry about the personal device compromising the network when streaming. Windows 365 also follows a Zero Trust Architecture by only storing information in the cloud rather than the streaming device. It also uses multi-factor authentication to ensure that login attempts are verified and integrated with Microsoft Azure Active Directory. Microsoft says you can pair MFA with dedicated Windows 365 conditional access policies to assess login risks instantly inside Microsoft's Endpoint Manager. All data at rest and in transit has encryption in Windows 365 from end to end. 

Microsoft has addressed many but not all problems and concerns that organizations might have with deploying Cloud PCs to its users. I think Windows 365 does an excellent job of mirroring its scalability with its simplicity. Cloud PCs can be managed and deployed with complex configurations or managed simply with data analytics and Zero Trust Security. Windows 365 is competitively priced and priced differently from other virtualization platforms, priced per user per month rather than computing resources. Windows 365 is a direct competitor with Amazon's Workspaces DaaS solution (Desktop as a Service). You can read more here on Amazon Workspaces, but one of the differences I notice right off the bat was the difference in pricing. Amazon Workspaces is priced based on the minutes used in Workspaces rather than a flat monthly rate for Windows 365. I have tested out Amazon Workspaces before, and it has tested in real-world cases, but I will have to get my hands on Windows 365 to compare the two better.

Wrapping up

Windows 365 seems like a powerful tool that answers the hybrid paradox of desiring to work remotely while also working collaboratively in person. Microsoft has emphasized the simplicity of its service so that medium and small businesses can acquire the service while also having integration in the depth of an enterprise. I am interested to see the adoption rate of Windows 365 in the coming years. I think Windows 365 will solve many problems some businesses have with digital transformation. Virtual desktops have many benefits over the traditional PC setup, and I will be interested in seeing how Microsoft partners shift and adjust to this new form of hybrid work. The connectivity to QoS ratio has always been important in remote desktop and apps and I’m intrigued how Microsoft will help solve this.

Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.

+ posts
Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.