Windows 365 vs Azure Virtual Desktop — which one fits your SMB?

"We want to let our people work from the cloud — what would you recommend?" It is a question we field every month, and the answer always starts with the same question in return: do you have Windows 365 or Azure Virtual Desktop in mind? Because these are two different Microsoft products, with plenty of overlap but also some sharp differences.

This article puts the two side by side, with the practical advice we give to SMBs of between 25 and 100 employees.

First the basics — what is a virtual desktop?

A virtual desktop is a complete Windows environment that runs not on the user's device, but in the cloud. The user works from any laptop, tablet or even a browser — and sees exactly the same Windows desktop with the same applications and the same files.

Benefits for SMBs:

• Security — no company data on local devices. A lost laptop is an empty device.
• Device-independent — Mac, ageing Windows PC, Chromebook, tablet, browser — they all work as a way in.
• Centralised management — updates, software installations and security policies rolled out across the whole organisation in one go.
• Scalable — a project team of 20 people for six months? Switch it on and off again, with no hardware investment.
• Bring Your Own Device — your people use their own device without that becoming a security problem.

But within Microsoft you have two options: Windows 365 or Azure Virtual Desktop.

Windows 365 — a Cloud PC for everyone

Windows 365 is Microsoft's answer to "can't this be simpler?". It is a Cloud PC — a personal, always-available Windows desktop per user, with a fixed monthly price and without you having to manage any Azure infrastructure yourself.

How it works:

• One user = one Cloud PC with fixed specs (for example 4 vCPU, 16 GB RAM, 256 GB storage)
• A fixed monthly price per user, regardless of usage
• Sign in via windows365.microsoft.com or the Windows App
• Management through Microsoft Intune — the same tooling as your physical laptops

The key characteristics:

• Personal and always available (the Cloud PC is yours, not shared)
• A fixed price — no surprises on the Azure bill
• Simple to set up — literally an hour per user
• Identical to a physical Windows 11 desktop for the end user

What it is not:

• Not flexible on compute — you pick a tier and that is what you get
• Not optimised for demanding desktops with multiple monitors and GPU work
• Not intended as shared infrastructure for rotating users

Azure Virtual Desktop — maximum flexibility, more management

Azure Virtual Desktop (AVD) is the older and more complex sibling. It is a desktop-as-a-service platform on Microsoft Azure where you decide for yourself:

• Which virtual machines you deploy (from small to very large, with or without GPU)
• Whether they are personal desktops (one user per VM) or shared sessions (multiple users per VM, multi-session Windows)
• How it scales (dynamically scaling up and down based on usage)
• Which profile service you use (FSLogix is the standard)
• Which applications you publish (a full desktop or only individual apps)

AVD is effectively Microsoft's own virtual desktop platform on Azure, designed for organisations that want control over the architecture and are prepared to manage that complexity.

The key characteristics:

• Maximum flexibility in compute, scale and architecture
• Multi-session: multiple users per VM = a lower cost per user
• Suitable for anything from a lightweight web desktop to heavy CAD workstations
• Deep integration with Azure networks, on-premises systems and identity

What it is not:

• Not simple — you manage virtual machines, networks, profile services and storage
• Not predictable on cost — Azure consumption fluctuates with usage
• Not "click and go" — building a good AVD environment takes weeks

The comparison in a single table

When Windows 365 — three scenarios

Scenario 1 — the hybrid employee with a home-working laptop

An employee works two days in the office (on a desktop) and three days at home (on a personal laptop or a simple second laptop). With a Windows 365 Cloud PC they have the same desktop everywhere, with the same bookmarks, the same installed apps and the same files — without data living on multiple devices.

Scenario 2 — external hires or seasonal work

You bring someone in for a three-month project. Instead of buying a laptop, preparing it and getting it back again, you activate a Cloud PC, grant access, and deactivate it once the project ends. No device, no onboarding, no offboarding risk.

Scenario 3 — an employee with a BYOD laptop in a sensitive sector

In sectors with sensitive data (healthcare, legal, financial) you do not want company data on personal laptops. A Cloud PC solves this: the employee works on their own Mac, but all company data stays inside your secured Cloud PC.

When Azure Virtual Desktop — three scenarios

Scenario 1 — a group of users with identical, lightweight needs

Ten call-centre staff who only use a browser, a phone system and Office — and never all need all the resources at the same time. With multi-session AVD they run together on one larger VM, and you pay once instead of ten times.

Scenario 2 — specific applications that need GPUs or heavy compute

CAD software, video rendering, machine learning — work that a normal Cloud PC cannot handle. AVD gives access to GPU VMs (NV-series) that you only pay for while they are running.

Scenario 3 — deep integration with on-premises systems

You have an ERP, a database or a file server under your own management that the virtual desktop needs fast, reliable access to. With AVD you place the VMs in the same Azure network, with a direct line (ExpressRoute or VPN) to your local environment. Architectural freedom that Windows 365 does not offer.

Our recommendation for SMBs

For the vast majority of SMBs between 25 and 100 employees, Windows 365 is the right starting point. Simplicity, predictable costs and a short time-to-value count for more than AVD's extra flexibility.

AVD becomes interesting as soon as:

• You have more than 100 users with comparable, lightweight workloads (multi-session then delivers real savings)
• You have specific applications that do not fit a standard Cloud PC tier
• You have significant on-premises dependencies that the virtual desktop needs to integrate closely with

The choice is not black and white, by the way. We have customers running Windows 365 for most of their people while also deploying AVD for a specific department. Microsoft supports that combination explicitly, and the management model through Intune is the same for both.

What about Microsoft 365 Apps for enterprise?

Both platforms support the full Microsoft 365 suite (Word, Excel, PowerPoint, Outlook, Teams). Worth knowing:

• For Windows 365, Microsoft 365 Apps are included in the E-tier licence or require a separate Microsoft 365 licence
• For AVD you need a separate Microsoft 365 licence per user in any case
• Multi-session AVD requires Microsoft 365 Apps for enterprise (E3, E5, A3, A5, F3 or Business Premium)

For SMB customers with Microsoft 365 Business Premium the licensing homework is usually simple: Business Premium covers the Office suite, and the Windows 365 or AVD licence comes on top of that.

The three most frequently asked questions

What if my employee's internet connection goes down?

Then they cannot reach their virtual desktop. For mobile staff, a 4G/5G backup on the laptop is a sensible investment. For office locations, a redundant internet connection is no longer a luxury when desktops depend on connectivity. We pair our virtual desktop solution as standard with a business connectivity solution that covers outages.

How much does it really cost?

Windows 365 costs roughly €30 to €60 per user per month for a normal desktop (4 vCPU, 16 GB RAM). A Cloud PC with more power or storage runs up to €120-150. AVD is consumption-based: a lightweight desktop can come in around €25 per user per month, while a heavy desktop runs considerably higher. Expect a comparable total with Windows 365 or a correctly set up AVD.

Can I switch later from Windows 365 to AVD (or the other way around)?

Yes, but it is not a wizard. You have to redeploy the applications, migrate user profiles via FSLogix and re-home the data. Our experience: choose deliberately and, in principle, stay put. An interim switch costs more than it usually delivers.

Where does eMotivz come in?

We manage both platforms for SMB customers. For customers where Windows 365 is enough, we handle the rollout through Microsoft Intune and the ongoing security policies. For customers who need AVD, we design the Azure architecture, set up FSLogix and monitor cost and performance.

For a typical SMB of 30 to 60 employees, we make the choice as part of a two-week advisory engagement: discovery of workloads, applications and user profiles, followed by a recommendation with a cost estimate. Then a pilot with 5 to 10 users, and only then the rollout.

Would you like to know what fits your organisation? Schedule a no-obligation conversation or take a look at our Virtual Desktops solution for our full approach.