Windows 365 vs Azure Virtual Desktop
Microsoft's two cloud-hosted Windows products — what each is for and how to choose.
Microsoft offers two products for hosting Windows desktops and apps in the cloud: Windows 365 (Cloud PC) and Azure Virtual Desktop (AVD). They use the same underlying technology and they often confuse customers because of the overlap, but they solve different problems with different cost models.
Windows 365 in one paragraph
Windows 365 Cloud PC provisions a fixed Windows 11 desktop per user in Microsoft's datacentres. Each user gets a cloud PC sized by vCPU / RAM / storage SKU — 2 vCPU / 4 GB / 128 GB at the entry level, up to 16 vCPU / 64 GB / 1 TB at the top. The cost is per user per month, fixed, regardless of how much they use it. Two flavours: Enterprise (Intune-managed, Entra-joined, integrated with your Microsoft 365 estate) and Business (self-service SMB tier).
Azure Virtual Desktop in one paragraph
Azure Virtual Desktop is the consumption-based VDI service in Azure. You design host pools of Azure VMs, deploy them with the size and quantity you want, and users connect to session hosts within the pool. Costs are consumption-based — Azure compute, storage, and licensing charges per hour the VMs run. AVD supports multi-session Windows 11 / Windows 10 (multiple users on one VM, sharing resources) and single-session, plus RemoteApp for streaming individual applications rather than full desktops.
Where they're the same
Both products:
- Stream Windows from Azure datacentres to any modern client (browser, dedicated app, Mac, iOS, Android).
- Use the Windows desktop session host technology and the FSLogix user-profile container.
- Support Entra ID join and Intune management.
- Integrate with Microsoft 365 for productivity workloads.
- Support Microsoft 365 Apps in shared / multi-session environments.
Where they're different
| Aspect | Windows 365 | AVD | | --- | --- | --- | | Per user | One dedicated cloud PC | Shared session hosts | | Sizing | Fixed SKUs | Custom VM sizes | | Cost model | Per-user fixed price | Consumption (Azure resources) | | Setup complexity | Self-service / simple | Significant Azure configuration | | Multi-session | No (single-user) | Yes | | RemoteApp | No | Yes | | Custom images | Limited | Full Azure imaging | | User personalisation | Always there | FSLogix profile, redirected at sign-in | | Best for | Persistent desktops, predictable users | Variable populations, RemoteApp, customisation |
When to pick Windows 365
- Knowledge workers who need a dedicated, persistent Windows desktop in the cloud.
- Predictable user counts and usage patterns.
- IT teams that want simplicity over flexibility.
- Frontline workers using Cloud PC from shared physical thin clients.
- Contractor / partner access where you want to give a persistent PC without shipping hardware.
When to pick AVD
- Mixed-population scenarios with variable user counts.
- Heavy multi-session Windows workloads where shared VMs are economical.
- Need for RemoteApp — stream individual apps rather than full desktops.
- Custom golden images, custom infrastructure controls.
- Existing AVD deployment to extend.
- Cost predictability isn't a hard requirement.
Running both
Many organisations run both — Windows 365 for the bulk of knowledge workers wanting a dedicated cloud PC; AVD for specialist scenarios (engineering workloads, RemoteApp, multi-session). They share much of the underlying tooling, so the operational overhead of running both isn't double.
For most Microsoft 365 customers, start with Windows 365 unless you have specific needs that push you to AVD. The fixed pricing and simpler operating model wins for typical use cases.