Microsoft Introduced Windows 365 as a Simpler Option For Cloud-Based Pcs

Microsoft on Wednesday announced the launch of Windows 365 that will provide a new way for organizations to allow access to virtual cloud-based PCs running on Microsoft’s Windows operating system. Users can now access a virtual PC configured with work applications from their home PC or a non-Windows system like an Apple Mac, iPad, or Android tablet.

Windows 365 evolves as the solution for remote access to enterprise applications on any device as some employees are still out of their offices due to the Covid pandemic. Microsoft will be able to make Windows revenue more predictable with Windows 365. Otherwise, it will continue to be in fragments as people upgrade from older versions.

Windows 365 was designed to simplify Microsoft’s product Windows Virtual Desktop (later renamed as Azure Virtual Desktop). It was used to allow out access to cloud-based Windows PCs. However, setting up and managing multiple virtual desktops was challenging and involved cost.
In an interview with CNBC on Monday, Jared Spataro, Vice President of Microsoft Corporate, said, “The experience of using Windows 10 or Windows 11 on Windows 365 will be the same as it’s been on Azure Virtual Desktop. However, the new service will provide more powerful controls to the administrators. They will be able to observe Cloud PCs and physical PCs simultaneously in Microsoft Endpoint Manager software.”

Spataro added, “The company wants to enhance Windows 365 with offline access, which will enable people who lost their internet connection to sync in the changes as soon as the connection re-established. We are not planning to bring similar capabilities to Azure Virtual Desktop.”

Organizations will be able to make monthly payments per user for the number of desktops they use. They can also select specific configurations with computing, storage, and memory for different desktops. Microsoft will reveal the pricing of Windows 365 on Aug. 2, when the service becomes available widely.

Economic Inferences

Microsoft considers Windows 365 as part of a new class. But, Spataro said, “We believe we won’t be the only entry in the category.”

According to Shannon Kalvar, a research director at technology industry analysis company IDC, Microsoft’s public cloud competitors Amazon Web Services (AWS) and Google can make a strong play. However, AWS offers cloud-based desktops through its WorkSpaces service, while Google has a virtual desktop service for the workforce only.

Kalvar said, the virtual client computing market was raised 19% to almost $4.5 billion in 2020, compared with 11% growth in 2019. “Any effort to get intelligence and tools together to the operations of the new resources is a relief to IT organizations,” he added.

Windows 365 relies on Microsoft’s Azure cloud infrastructure for financial reporting, but it will come under Microsoft’s Windows Commercial category. This category includes volume Windows licensing for enterprises. In addition, Spataro said, Windows Commercial comes under the mature Windows product range rather than the rapidly growing Azure segment, Spataro said.

If many companies adopt Windows 365, revenue from the service could make overall Windows revenue steady and responsive to the Windows releases cycles. As Microsoft halts supporting older versions, companies upgrade their computers in bulk. They could pay Microsoft for Windows 365 per month rather than investing in new PCs with the latest version of Windows. As a result, Windows license revenue flows to Microsoft all at once.