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Windows 365 – The revolutionary new virtualization solution (Part 1: is it a gamechanger?)

Microsoft changes the cloud market – once again. Releasing Windows 365, there is now a virtualization solution available that has affordable pricing (more details about that later in this article), scalability and is really easy to implement. In this small series, I show you how to setup and use Windows 365.

This blog series contains the following articles (the links will be updated, once the articles are released).

In this article I cover the following topics:

Is it “Windows 365” or “Windows365”?

Windows 10 – Windows 11 – Windows 365 – what is the difference?

How Windows 365 works in general

Windows 365 vs Azure Virtual Desktop (high level comparison)

Licensing & pricing for Windows 365

Comparison Windows 365 Business and Windows 365 Enterprise

Summary – is Windows 365 really a gamechanger?

Is it “Windows 365” or “Windows365”?

First of all a philosophical question – what is the correct way to write it? In several blog articles and news articles I’ve seen “Windows365”, but Microsoft always writes Windows 365 with a space inbetween, so that is the correct wording.

The official version is Windows 365 with space.

Windows 10 – Windows 11 – Windows 365 – what is the difference?

You all know Windows 10. It is on the market since July 29, 2015. It brought a good new and stable user experience, supporting all important security topics and so on. There are enough articles about all cool aspects of Windows 10, so I will not do that here. In fact it is one of the best operating systems, Microsoft ever released. Not perfect, but really good. From now, that was 6 years ago. There was a day when Microsoft said “Windows 10 will [possibly] be the last client operating system” and changed the update and upgrade model to rings. Well we all know, time changes, ideas change, philosophies change. And now Windows 10 has a successor: Windows 11.

Windows 11 is currently not released and only in BETA. That will change until end of 2021. End users and companies can already install it or roll it out to get used to it and how it works. See my article Deploy Windows 11 with Intune and Endpoint Manager to learn how to distribute it with Intune inside a company. I am already using it for some time and must say: It is really great. It feels like a cleaned and re-structured Windows 10. Nearly no problems – especially for a BETA really stable. Good work Microsoft! Please continue like that!

But now – what the hell is Windows 365? That is not a new generation of Windows or something completely different. Not something like a Windows 12 behind the curtain – or whatever some creative minds might believe. Windows 365 is a license. A service. This license allows you (and that is the cool thing) to rent a cloud PC. That cloud PC is hosted in Microsoft Azure and can be fully integrated into your cloud environment. That is logical and genius at the same time! With Windows 365 you get a PC running Windows 10 or Windows 11 (I am sure that option will follow soon) for a monthly fee and are not in need of buying new hardware immediately for a lot of money.

I found a good article with more explanation about all the details here: What’s The Difference Between Windows 11 and Windows 365 | Petri

Windows 10 -> you don't like changes or you have old hardware (no TPM, older than Intel 8th gen processor) then Windows 10 is the operating system of your choice. It will be serviced until 2025. So there is no urgent need for change.
Windows 11 -> you love new things (like me) and have newer hardware, then Windows 11 is interesting for you. It will be serviced minimum until 2031.
Windows 365 -> you are a company (or have an own Office 365 / Microsoft 365 Business or Enterprise Tenant) and need enterprise controls. You want to deliver easy VDI-like experience with remote access, then you must have a look at Windows 365.

How Windows 365 works in general

Windows 365 is an Azure VM that is setup and dedicated to a user. The message that it is an Azure VM is hidden on Windows 365 Frequently Asked Questions | Microsoft when Microsoft writes the following:

I think it is logical that Microsoft has not re-invented the wheel. They use what they have. I think they may have dedicated server racks or data rooms for Windows 365 because the official statement after the launch is that Microsoft is working to extend the capacity. That makes me think that Windows 365 is based on Azure technology but a little separated to avoid impact to other services for the case that there is a major issue in Windows 365.

The statement also sounds like Microsoft is delivering Windows 365 from every datacenter – that would be great and mean that there are VMs in Germany, France, USA, and all locations. This is a fact that will make many customers happy because of some requirements they have. Up to now I have not found a documentation about that, but it will follow. I will try to figure out where my Windows 365 VMs run – stay tuned for the upcoming articles about this.

Having Windows 365 run on Azure is really great news. Not because it is cloud and high available by design and all that marketing stuff. That is all right but the really cool thing about this is the fact that Microsoft builds own hardware for their Azure datacenters (okay, they do not “build themselves”, they design and “let build”). That means: highest effiency and resource usage. That means: With smaller hardware you can achieve the same results like with bought hardware in your office. That is a way to make all cheaper. And good for our environment.

Windows 365 is using Azure technologies to provide the best experience.

Windows 365 vs Azure Virtual Desktop (high level comparison)

Some companies already have Azure Virtual Desktop running and may now think: “Hey cool, now I can quit my Virtual Desktop and do all with Windows 365!” The answer to that is: NO. Azure Virtual Desktop is a complete scalable VDI environment – Windows 365 is a single Cloud PC. That is something completely different. The simple version of the explanation: With AVD / VDI you have multiple hosts – a user can automatically be switched between that hosts. The hosts are grouped to pools. You need VDI-ready applications installed. If a host fails, the users are redirected to another one.

All that is not possible with Windows 365. If your PC fails, you are doomed. Like with a PC or laptop you have at home. It is one PC. No high availability, no pool. Just a PC. You need to backup your data yourself (or even better: work online and don’t save anything directly on the device). If the Cloud PC is broken by you, you need to reset it. And start with a fresh windows – like with a damaged Windows installation on a Home PC.

Windows 365 and AVD have in common that they run on Azure and use Windows 10 (later 11) Pro or Enterprise – depending on your licenses. If you run only 1 VM inside AVD, you may think about replacement, because then Windows 365 will surely be cheaper. One big factor: You need to have intelligent shutdown / restart automatisms and scripts to keep AVD cheap. Otherwise the VMs burn money (for doing nothing). Windows 365 may run 24×7 on 365 days a year without increasing prices.

Windows 365 is not a replacement for AVD. You may run both in peaceful coexistence for different scenarios.

Licensing & pricing for Windows 365

The cost of Windows 365 varies by the size of the computer that you choose. That is a usual business. When buying hardware, it is a big difference if you buy a cheap PC with Intel Core i3, 4GB RAM, integrated graphics card and 64GB hard disk or a Gaming PC with Core i7, 16 GB RAM, 2TB SSD and current graphics card. The same for Windows 365. With Windows 365 there is the special option of hybrid benefit. That means if your source PC is already running Windows 10 (11?) Professional may use the hybrid benefit. This qualifies you for a discount of 16% compared to the normal prices. At release the price list for Windows 365 Business is:

With hybrid benefit the prices change:

Windows 365 Enterprise has the same prices like Windows 365 Business with Hybrid Benefit (because MS assumes that no large company has Windows 10/11 editions lower than Professional):

PCs with better graphic power will follow – some time. The screenshots above are taken from the Admin Center where you can buy the license. The first thought may be: “wow, that sounds expensive“. So let’s do a little calculation. A PC with 2 CPUs, 4GB RAM and 128 GB hard drive is enough for daily work, data storage, online (remote) work and Teams (audio) according to Windows 365 Business sizing options – Microsoft 365 admin | Microsoft Docs. Without hybrid benefit it costs 31,90€ each month.

31,90 * 12 = 382,80 € per year.

The normal lifecycle for hardware in a company is 3 years.

382,80 * 3 = 1.148,40 € for 3 years.

Now compare that price to BUSINESS equipment you usually buy for your company. I write it in capital letters because many trolls in forums already write “I buy a laptop for maximum 500€“. That may be right, but that is not a business relevant one because hardware in that price class has not the same business relevant equipment. So if you compare, compare correctly. A business laptop for approximately 1.000€ is usually a cheap or normal one – despite you have really good contract with extremely high amounts of purchases.

Additionally, you do not have to pay for energy (power), have low cost for setup, because you pre-configure all with Intune policies. So you are faster. And don’t forget: A virutalization solution also costs money, needs to be maintained, VMs need to be set up, backed up and all that stuff. With Windows 365, you don’t need to worry about this (if you do it right). These are arguments that each company must calculate individually, but make Windows 365 interesting.

Last but not least, if you see that you are paying too much because you ordered too large hardware – or vice versa need better hardware, you can change the sizing without the need to redeploy everything from scratch. So (very important for a company): The Cloud PC is forecastable regarding cost.

Windows 365 looks not cheap but with a fair calculation you will not be more expensive than with other hardware and all overhead cost you have, when you order physical devices.
In any case, Windows 365 is not meant for personal use, only for companies!

Comparison Windows 365 Business and Windows 365 Enterprise

Why are there 2 editions of Windows 365? Easy question – as with licensing: One is made for small and easy setup, one is for large enterprises. Guess from the name which one is for what.

Windows 365 Businss is setup in about 5 minutes basically – I will prove you in the next article of that series. Windows 365 Enterprise needs more pre-work. More details about this in the article, where I show you Windows 365 Enterprise in detail.

Important to know: Windows 365 Business is capped at 300 licenses! That is the same like with Microsoft 365 Business licenses. You can only buy 300. Not 301 or more. If your company needs more, then you need to switch to the Enterprise plans (that have even more benefits).

For more details you can always have a look on the official Windows 365 website: Windows 365 Cloud PC | Microsoft.

Windows 365 Business is designed for single use cases and small companies. Windows 365 Enterprise is designed for large enterprises.

Summary – is Windows 365 really a gamechanger?

That was a lot of text now – I wanted to keep it shorter, but all the facts I wrote down now are really important to understand – because these are the questions that are in people’s mind currently. But the question of that chapter “is Windows 365 really a gamechanger?” is not yet answered – and I cannot answer it now. I will do it after the series when all aspects are evaluated. For now the summary is: Windows 365 has the potential to be a gamechanger, but the details will determine if it really is.

You have something you want to discuss – want to see Windows 365 in action or know how to buy it or whatever – feel free to contact me! Stay tuned for the upcoming articles – they will follow very very soon 😉

Published by Andreas

Founder of M365 Evangelists Cloud-Architect, Strategy Consultant, Consultant for Microsoft technologies, Graph API enthusiast, PowerShell enthusiast
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