Microsoft Windows 365 to offer an easier option for cloud-based PCs

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Satya Nadella, CEO of Microsoft Corp., gestures as she speaks at the Microsoft Decoded conference in Mumbai, India on Wednesday, February 22, 2017. Flipkart has chosen Microsoft’s Azure public cloud computing service in a new strategic partnership, Nadella said. .

Amit Madheshiya | Bloomberg | Getty Images

Microsoft on Wednesday introduced Windows 365, a new way for organizations to give employees access to cloud-based virtual PCs running Microsoft’s Windows operating system. For example, users could use this service to access a virtual PC configured with work applications from their home PC or from a non-Windows device such as an Apple Mac, iPad, or Android tablet.

Windows 365 comes as the market for accessing business applications on any device is expanding, with some employees still out of their offices due to the Covid pandemic. If the service takes off, it could help Microsoft make Windows revenue more predictable, rather than getting stuck as people upgrade from previous versions.

Microsoft already has a product that companies use to distribute access to cloud-based Windows computers. Once called Windows Virtual Desktop, the service, which grew significantly last year, was renamed Azure Virtual Desktop last month.

However, setting up and managing multiple virtual desktops through the service can be challenging and costs aren’t always predictable.

Windows 365, which is built on Azure Virtual Desktop, was designed to reduce that complexity.

The experience of using Windows 10 or Windows 11 on Windows 365 will be the same as on Azure Virtual Desktop, said Jared Spataro, Microsoft’s corporate vice president, in an interview with CNBC on Monday. But the new service will offer more powerful controls for administrators. They will be able to see so-called Cloud PCs alongside physical PCs in Microsoft Endpoint Manager software, Spataro said.

The company wants to work to improve Windows 365 with offline access, so that if people lose connections to their PCs in the cloud, when the connections are reestablished, any changes will be synchronized with the cloud, Spataro said. There are no plans to bring similar functionality to Azure Virtual Desktop, he said.

Organizations will be able to pay per user per month for the number of desktops they use and choose specific configurations with compute, storage and memory resources for different desktops. Admins can get recommendations and then update desktops with one click, according to a blog post. Microsoft will reveal Windows 365 pricing on August 2, when the service is generally available.

Tax implications

Microsoft treats Windows 365 as part of a new category. “We don’t think we will be the only entry into the category,” said Spataro.

Microsoft’s public cloud competitor, Amazon Web Services, offers cloud-based desktops through its WorkSpaces service, while Google has a virtual desktop service for employees only.

“I believe both companies will play a strong game,” said Shannon Kalvar, director of research at technology analyst firm IDC.

The virtual client computing market grew 19 percent to about $ 4.5 billion in 2020, compared to 11 percent growth in 2019, Kalvar said. Almost all of the growth is in public clouds, because organizations will want to place virtual desktops close to where their workloads are to reduce latency, Kalvar said. This growth has had the effect of giving administrators much more to administer.

“Any effort to bring intelligence and tools to the operations of these new assets is a relief to IT organizations,” said Kalvar.

While Windows 365 is built on Microsoft’s Azure cloud infrastructure, it will fall into Microsoft’s Windows Commercial category for financial reporting purposes, which includes Windows Volume Licensing for Business. In turn, Windows Commercial falls into the area of ​​mature Windows products, rather than the fast-growing segment of Azure, Spataro said.

If many organizations adopt Windows 365, the revenue from the service could make overall Windows revenue less volatile and responsive to Windows release cycles. As Microsoft stops supporting older versions, organizations upgrade their computers in bulk, which can mean that some periods are seeing faster Windows growth than others. Businesses could pay Microsoft for Windows 365 every month, rather than buying new PCs with the latest version of Windows, which translates into Windows licensing revenue moving to Microsoft all at once.

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