Last Updated: August 2026
What Is Azure Virtual Desktop?
Azure Virtual Desktop is a desktop and app virtualization service that runs on infrastructure you deploy inside your own Azure subscription. You create host pools, choose the VM sizes, configure networking, and decide whether users share a multi-session host or get a dedicated personal desktop.
In other words, AVD gives you the raw building blocks. As a result, you get full control over image management, scaling, and cost optimization — but you also own the ongoing engineering work.
Core AVD components
| Component | What it does |
|---|---|
| Host pool | A collection of session host VMs that share the same image and configuration |
| Session host | The actual Windows 11/10 VM (single-session or multi-session) users connect to |
| RemoteApp | Publishes a single application instead of a full desktop |
| FSLogix profile container | Keeps user profiles persistent across pooled, non-persistent hosts |
| Autoscale | Starts/stops session hosts based on schedule or demand to control compute cost |
What Is Windows 365?
Windows 365 is a Cloud PC. Microsoft provisions, patches, and runs the underlying Azure infrastructure for you. You assign a user a license, pick a size (vCPU/RAM/storage), and a persistent, dedicated Windows 11 desktop is ready within minutes.
Because the desktop is always personal and always on, it behaves like a physical PC that happens to live in the cloud. Therefore, there is no host pool to size, no image pipeline to maintain, and no autoscale logic to write.
Windows 365 editions
| Edition | Best for | Requires |
|---|---|---|
| Windows 365 Business | Up to 300 users, small teams | No Intune or Entra Connect required |
| Windows 365 Enterprise | Larger orgs needing central policy control | Microsoft Intune + Microsoft Entra ID join or hybrid join |
If your devices already go through hybrid join, it’s worth reviewing our Microsoft Entra hybrid join troubleshooting guide before rolling out Windows 365 Enterprise, since Cloud PCs inherit the same join prerequisites as physical endpoints.
Architecture Comparison
The clearest way to see the difference is side by side: who owns the infrastructure, and who owns the operations.
Microsoft Entra ID (Identity for Both Models)Azure Virtual Desktop(Your Azure Subscription)Host Pool + Session Host VMsFSLogix Profile StorageVNet + Autoscale RulesYou manage: images, scaling, patchingWindows 365(Microsoft-Managed)Dedicated Cloud PC per UserFixed per-user monthly priceAuto-provisioned in minutesMicrosoft manages: host, patching, scaling
Diagram: AVD infrastructure lives in your Azure subscription; Windows 365 infrastructure is fully managed by Microsoft. Both rely on Microsoft Entra ID for identity.
Cost Comparison (2026 Pricing)
Windows 365 uses flat, predictable per-user pricing. AVD uses consumption-based Azure billing, so the total cost swings with usage, VM size, and how well you optimize autoscale.
Windows 365 pricing
| Plan | Typical range | Notes |
|---|---|---|
| Windows 365 Business | $28–$56 / user / month | Rates reflect a permanent 20% price reduction Microsoft applied in May 2026 |
| Windows 365 Enterprise | $31–$123 / user / month | Priced by machine size, from a 2 vCPU/4GB entry tier up to an 8 vCPU/32GB configuration |
Every Windows 365 user also needs an eligible Windows and Microsoft 365 license underneath the Cloud PC subscription, since Windows 365 licensing does not replace the need for an M365 plan covering Office apps and identity.
Azure Virtual Desktop pricing
| Cost component | How it’s billed |
|---|---|
| Session host compute | Standard Azure VM rates, roughly $0.05–$0.15/hour for a basic VM, higher for larger sizes |
| Storage | Managed disks for OS + FSLogix profile storage, billed per GB |
| Internal user access | Included if users already hold an eligible Microsoft 365 or Windows license |
| External user access | $10/user/month for full desktop and app access, or $5.50/user/month for apps-only access |
Because compute is metered, AVD costs less per user when you run multi-session hosts with good concurrency, and it can drop close to zero during off-hours if autoscale shuts hosts down. However, an oversized or always-on host pool can quietly cost more than Windows 365 for the same headcount, which is a mistake I regularly see in smaller deployments.
Which is cheaper?
| Scenario | Usually cheaper |
|---|---|
| Small team (under 25 users), light admin capacity | Windows 365 Business |
| Large multi-session deployment, well-managed autoscale | Azure Virtual Desktop |
| Bursty or seasonal workforce | Azure Virtual Desktop (scale to zero off-season) |
| Predictable fixed headcount, budget certainty required | Windows 365 |
Licensing Requirements
Neither service is “buy one thing and done.” Both sit on top of existing Microsoft 365 or Windows licensing.
- Windows 365 Business: Cloud PC subscription only; works without an existing M365 tenant, though most orgs pair it with Microsoft 365 Business Premium.
- Windows 365 Enterprise: Requires Microsoft Intune and Microsoft Entra ID (join or hybrid join), plus an eligible Windows/M365 license per user.
- Azure Virtual Desktop: Internal users need Microsoft 365 E3/E5, Windows E3/E5, Microsoft 365 A3/A5, or a standalone AVD access license. External users pay the per-user access fee shown above instead.
Management Overhead
This is where the two products diverge the most in day-to-day admin work.
| Task | Azure Virtual Desktop | Windows 365 |
|---|---|---|
| Image management | You build and maintain golden images | Microsoft provides base images; you customize via Intune |
| Scaling | You configure autoscale rules and schedules | Not applicable — one Cloud PC per user, always on |
| Networking | You design VNets, peering, and egress routes | Microsoft manages the network path (Enterprise supports Azure network connections for hybrid needs) |
| Patching | You own the patch cadence, similar to any Windows Server fleet | Handled through Intune policy, same as a physical Intune-managed device |
| Troubleshooting | Full VM-level access; more moving parts to diagnose | Simplified; behaves like any Intune-managed endpoint |
If you already run RDS session hosts, some of this will feel familiar. In our Windows Server 2022 RDS session host disconnect troubleshooting guide, the root cause was a token/idle-timeout misconfiguration — the same category of issue shows up on AVD session hosts, since both are built on the same underlying Remote Desktop Services stack.
When to Use Azure Virtual Desktop
Choose AVD if you need any of the following
- Multi-session Windows 11/10 to cut per-user cost across many concurrent users
- RemoteApp to publish individual applications instead of full desktops
- Custom VM sizing, GPU SKUs, or workload-specific images (CAD, engineering, data science)
- Bursty or seasonal usage where autoscale can shrink capacity to near zero
- Deep VNet integration, hybrid connectivity, or strict data-residency control
- An admin team with the Azure/AD skill set to own host pools, FSLogix, and scaling plans
Since AVD is built on Remote Desktop Services, admins with existing RDS experience — including automation like the Power Automate Desktop / AVD minimized-window fix we’ve published — will find the operational model familiar.
When to Use Windows 365
Choose Windows 365 if you need any of the following
- A persistent, personal desktop for an individual user with zero infrastructure to manage
- Predictable, fixed monthly cost per seat for budgeting
- Fast onboarding for contractors, remote hires, or BYOD security isolation
- A small IT team without the bandwidth to run host pools and autoscale rules
- Standard knowledge-worker workloads that don’t need multi-session density
Running Both Together
These two products are not mutually exclusive. Many organizations run Windows 365 for standard knowledge workers and AVD for dev/test pools, seasonal staff, or app-publishing scenarios. In addition, Windows 365 Cloud PCs can be provisioned through Azure Virtual Desktop’s infrastructure for a blended deployment, which gives large enterprises a single management plane for both models.
If you’re already managing certificate-based device trust, our Microsoft Intune Cloud PKI deep dive is worth reviewing, since Cloud PC and AVD session hosts both need certificate-based authentication configured correctly for Wi-Fi, VPN, or Conditional Access scenarios.
Decision Checklist
| Question | If yes → |
|---|---|
| Do you need multi-session cost savings? | Azure Virtual Desktop |
| Do you need predictable per-user billing with zero infra work? | Windows 365 |
| Do you need RemoteApp (single-app publishing)? | Azure Virtual Desktop |
| Is usage bursty or seasonal? | Azure Virtual Desktop |
| Do you lack in-house Azure/host-pool admin capacity? | Windows 365 |
Frequently Asked Questions
Is Windows 365 more expensive than Azure Virtual Desktop?
Not always. Windows 365 is often cheaper per user for small, steady headcounts, while AVD becomes cheaper at scale with multi-session hosts and well-tuned autoscale.
Can I switch from Windows 365 to AVD later?
Yes. There is no lock-in between the two — you can run a pilot on one and migrate user data and profiles to the other, though a migration plan is recommended for larger user counts.
Does Windows 365 support multi-session desktops?
No. Every Windows 365 Cloud PC is a dedicated, single-user desktop. Multi-session is exclusive to Azure Virtual Desktop and Azure Virtual Desktop for Azure Local.
Do I need Microsoft Intune for Windows 365?
Only for Windows 365 Enterprise. Windows 365 Business can run without Intune, though Intune is recommended once you scale past a handful of users.
Can external contractors use AVD or Windows 365?
Both support external users. AVD bills external users under per-user access pricing; Windows 365 requires assigning a standard Cloud PC license to the external account.
What happens to my Cloud PC if I stop paying?
Windows 365 Cloud PCs enter a grace period after a license is removed, after which the Cloud PC and its data are deprovisioned according to Microsoft’s retention policy.
Is AVD billed per hour or per month?
AVD compute is billed per hour of actual VM runtime, not a flat monthly rate. Costs stop accruing once you deallocate the session host VM.
Which one is easier for a small IT team to manage?
Windows 365 is easier for small teams since Microsoft manages the underlying infrastructure, patching, and scaling automatically.
Can I use GPU workloads on Windows 365?
Yes, Windows 365 Enterprise offers GPU-enabled configurations for graphics-intensive workloads, though AVD offers a wider range of GPU VM sizes.
Do AVD and Windows 365 both require Microsoft Entra ID?
Yes. Both rely on Microsoft Entra ID for identity, whether through cloud-only join, hybrid join, or Entra Connect synchronization from on-premises Active Directory.
Is RemoteApp available in Windows 365?
No. RemoteApp, which publishes a single application instead of a full desktop, is only available in Azure Virtual Desktop.
Can I resize a Windows 365 Cloud PC after purchase?
Yes. You can upgrade a Cloud PC to a larger configuration; downsizing typically requires reprovisioning with data preserved through Windows Backup.
Which is better for disaster recovery seats?
Windows 365 is generally faster to stand up for DR since a Cloud PC provisions in minutes without needing a pre-built host pool image.
Antonio Rennvick is an IT Infrastructure Manager with 15+ years running enterprise Active Directory, Microsoft 365, and Azure environments. He’s Microsoft certified (AZ-104, MS-102) and writes Core365 Cloud to share what actually works in production—PowerShell automation, AD deep dives, and security hardening drawn from real-world work, not test labs.
