AVD vs Windows 365: the Microsoft Cloud Desktop Showdown

When Microsoft offers you two different cloud desktop solutions, it’s easy to feel a bit lost. 

Azure Virtual Desktop (AVD) and Windows 365 both promise to deliver Windows desktops from the cloud, but they take fundamentally different approaches. One gives you the keys to the kingdom with full control and flexibility, while the other hands you a ready-made solution that just works. 

In this article, we’ll break down both platforms, compare their costs, performance, and management requirements, and help you work out which one makes sense for your organisation. 

What is Azure Virtual Desktop? 

Azure Virtual Desktop (AVD) is Microsoft’s infrastructure-focused approach to desktop virtualisation: a toolkit for building custom virtual desktop environments in Azure. Running directly in your Azure subscription, it gives you granular control over every component, from VM sizes and storage types to networking configurations. You can deploy Windows 10/11 single or multi-session desktops, or Windows Server-based Remote Desktop Services, choosing the exact resources that you need. 

The platform integrates deeply with the Microsoft ecosystem: if you’re already using Entra ID (formerly Azure AD) and Microsoft 365, AVD feels like a natural extension. But this flexibility comes with complexity: setting up host pools, app groups, and workspaces requires proper Azure expertise and planning. 

What is Windows 365? 

Windows 365  or Windows 365 Cloud PC is Microsoft’s simplified cloud desktop solution, launched in 2021 for organisations wanting virtual desktops without VDI complexity.  

Instead of managing infrastructure, you simply choose from pre-configured Cloud PC sizes and each user gets their own dedicated, persistent desktop that works like a physical PC in the cloud. It comes in two editions: Business (up to 300 users, set up in an hour with a credit card) and Enterprise (more than 300 users, with Intune integration). 

Microsoft handles everything: all compute runs in Microsoft-managed Azure subscriptions, not yours. You don’t touch VMs, storage, or networks; Microsoft manages updates, maintenance, and availability. You just pay a fixed monthly fee per user and your team gets reliable cloud desktops accessible from anywhere. 

Cost comparison 

The pricing structures of AVD and Windows 365 couldn’t be more different. 

Azure Virtual Desktop pricing follows a consumption-based model. You pay for what you use: compute hours, storage capacity, network egress, and any additional Azure services. A typical AVD deployment might cost anywhere from £15-40 per user per month, but this varies wildly based on usage patterns. If users only need access during business hours, you can use auto-scaling to shut down VMs overnight and weekends, potentially cutting costs by 40-60%. Windows 10/11 multi-session can drive costs even lower by allowing 6-10 users to share a single VM. 

The flexibility is both a blessing and a curse. You can optimise costs aggressively—using spot instances for non-critical workloads, reserved instances for predictable capacity, or Azure Hybrid Benefit if you have existing Windows Server licenses. But this also means your monthly bill can fluctuate, making budgeting more challenging. Our guide to Azure Virtual Desktop costs dives deeper into these optimisation strategies. 

Windows 365 pricing is refreshingly straightforward. You pay a fixed monthly fee per user based on the Cloud PC configuration. As of 2025, prices start around £25 per month for a basic 2vCPU/4GB RAM/64GB storage configuration, rising to £150+ for high-performance 8vCPU/32GB RAM setups. 

There’s no usage-based billing: whether a user logs in once a month or eight hours a day, you pay the same. This predictability makes budgeting simple and eliminates bill shock. But it also means you might overpay for light users or seasonal workers who don’t need full-time access. 

The cost reality check: For organisations with 50 full-time office workers who need standard desktops, Windows 365 often works out slightly more expensive but far more predictable. For organisations with variable workloads, shift workers, or large-scale deployments (where you can leverage multi-session), AVD typically offers better value. For many firms, the breakeven point sits around 100-150 users, but this depends heavily on your specific usage patterns and existing Microsoft licensing. 

Don’t forget the hidden costs either. AVD requires more IT expertise to manage, which might mean additional staffing or consultancy costs. Windows 365’s simplicity can reduce management overhead, potentially offsetting its higher per-user price. For a broader understanding of Azure pricing across services, see our guide on breaking down Microsoft Azure pricing.

Setup time and ease of deployment 

AVD setup is a proper project requiring several weeks from planning to production. You’ll need to create resource groups, virtual networks, storage accounts, host pools, and workspaces, plus configure Entra ID and FSLogix profile containers. The learning curve is steep, and getting to grips with availability zones, network security groups, and Azure RBAC takes time. Once deployed though, Azure Monitor and Log Analytics provide excellent ongoing management tools. (If you’re comparing AVD to other enterprise VDI solutions, our comparison of AVD vs Citrix explores these management aspects in detail.) 

Windows 365 setup is remarkably simple. Business edition users can be up and running in an hour; just buy licenses, assign them, and users receive login instructions. Even Enterprise edition, with its Intune integration and custom images, takes days rather than weeks. The trade-off is customisation. You’re locked into Microsoft’s approach, which might frustrate organisations needing specific networking or storage configurations for legacy applications. 

Performance comparison 

AVD performance is highly customisable. Control over infrastructure means you can upgrade storage for better IOPS, add GPU-enabled VMs for graphics workloads, or deploy across multiple regions for lower latency. Teams optimisation is impressive, offloading media processing locally for near-native call quality. Multi-session Windows 10/11 works well with proper sizing (typically 6-8 standard users per D4s_v5 VM) though performance depends on workload types. 

Windows 365 performance is consistent but inflexible. Each user gets dedicated resources based on their SKU, getting rid of those noisy neighbour issues. The experience is well-optimised for office workloads with quick boot times and smooth application performance. GPU options are available for Enterprise edition, though at premium prices. The limitation: performance upgrades mean moving to a more expensive SKU permanently (you can’t temporarily boost resources for peak periods). 

For UK organisations, both platforms benefit from Azure’s UK South and UK West regions, keeping latency low. Performance is generally excellent with a decent internet connection (minimum 10 Mbps recommended).

Security and compliance 

Both platforms inherit Microsoft’s enterprise-grade security foundation, but differ in control levels. 

AVD security puts you in charge. Implement Zero Trust architectures, configure conditional access policies, and use Azure Private Link for enhanced security. Microsoft Defender for Cloud provides threat detection, while Azure Policy keeps things compliant. You can encrypt data with your own keys and architect environments to meet specific regulations. The downside is that this flexibility means you’re responsible for proper configuration: mistakes can create vulnerabilities. 

Windows 365 security takes a managed approach. Microsoft handles infrastructure security, patching, and encryption. You still get conditional access and MFA through Entra ID, plus device compliance via Intune. For many organisations, this ‘built-in’ security is preferable, as Microsoft’s security team likely surpasses most internal IT departments. You sacrifice some customisation but gain peace of mind. 

Both platforms support major compliance standards (ISO 27001, SOC 2, GDPR), making them suitable for regulated industries. AVD gives you control over implementation, while Windows 365 provides a standardised approach. 

Scalability and flexibility 

AVD scalability is essentially limitless. Scale from 100 to 10,000 users dynamically with auto-scaling that provisions and deprovisions session hosts based on demand. Create different host pools for different user groups, e.g. GPU-enabled VMs for developers, or multi-session hosts for call centre workers. RemoteApp publishing, load balancing options, and drain mode for maintenance give you complete control over how the platform scales and operates. 

Windows 365 scalability is simpler but less dynamic. Adding or removing users is straightforward: just manage licenses. However, there’s no auto-scaling or resource flexibility. Each Cloud PC runs 24/7 regardless of usage, making it less economical for variable workloads. The recent Windows 365 Frontline edition allows shift workers to share Cloud PCs (not simultaneously), but it’s still not as granular as AVD’s options. 

For stable, predictable user numbers, Windows 365’s simplicity works well. For variable workloads or complex requirements, AVD’s flexibility is unmatched. 

Windows 365 Business is designed for simplicity above all else. Limited to 300 users, it’s perfect for smaller organisations that want cloud desktops without the complexity. You purchase directly from Microsoft with a credit card, no Azure subscription or domain controller required. The entire setup happens through windows365.microsoft.com, and Microsoft manages literally everything: networking, security, updates, the lot. 

The trade-off is control. You can’t join Cloud PCs to your on-premises Entra ID, integrate with existing virtual networks, or apply sophisticated security policies. It’s a take-it-or-leave-it solution, but for many small businesses, that’s exactly what they want. 

Windows 365 Enterprise scales beyond 300 users and integrates with your existing Microsoft infrastructure. Cloud PCs can join your Entra ID or hybrid AD environment, integrate with your virtual networks, and be managed through Microsoft Intune alongside your physical devices. You get more image management options and can implement conditional access policies. You also have better visibility into usage and performance. 

The Enterprise edition needs additional licensing: users need Windows 11 Enterprise or Windows 10 Enterprise, Microsoft Intune, and Entra ID P1. These are included in Microsoft 365 E3/E5/F3 plans, so if you’re already licensed appropriately, there’s no additional cost beyond the Windows 365 subscription. 

Interestingly, both editions cost the same per user for equivalent configurations. Start with Business if you’re small and want simplicity; choose Enterprise if you need integration with existing systems or have more than 300 users. 

Every organisation has different requirements, and while AVD can technically handle any virtual desktop scenario, it really does well in specific situations. Here are some of the most compelling use cases where AVD’s flexibility and power justify the additional complexity. 

1. Large enterprises with diverse workloads find AVD’s flexibility invaluable. When you have everyone from CAD designers needing GPU acceleration to call centre agents requiring basic desktops, AVD lets you optimise each scenario independently. The ability to create multiple host pools with different configurations means you’re not forcing square pegs into round holes. 
2. Cost-conscious organisations with 100+ users often find AVD more economical, especially when leveraging Windows 10/11 multi-session. The ability to optimise resource allocation, use auto-scaling, and take advantage of reserved instance pricing can result in significant savings compared to Windows 365’s fixed pricing model. Our guide to Azure cost optimisation covers strategies that apply well to AVD deployments. 
3. Hybrid cloud strategies often incorporate AVD as part of broader Azure adoption. If you’re already moving workloads to Azure or considering Azure VMware Solution for server virtualisation, AVD provides a consistent platform for desktop virtualisation that integrates naturally with your other Azure services. 

Windows 365 might seem like the simpler sibling, but for many organisations, that simplicity is exactly what makes it the superior choice. These scenarios are where Windows 365’s tighter approach delivers real business value without the overhead of traditional VDI. 

• Small to medium businesses without dedicated IT teams find Windows 365’s simplicity invaluable. When you need cloud desktops but don’t have the expertise or desire to manage infrastructure, Windows 365 delivers enterprise-grade virtual desktops without enterprise-grade complexity. 
• Rapid deployment scenarios favour Windows 365. New office opening next week? Acquisition requiring immediate desktop access? Emergency remote work requirement? Windows 365 gets users productive in hours, not weeks. The speed of deployment can be business-critical in fast-moving situations. 
• Microsoft 365-centric businesses find Windows 365 pretty compelling. If your org lives in Teams, SharePoint, and Office applications, Windows 365 provides an optimised experience with minimal configuration. The integration just works, which is super useful for productivity-focused deployments. 

By now, you should have a decent idea of which one makes the most sense for you. That said, try to keep the following in mind when making the decision. 

• Your current Microsoft licensing will impact the economics. Microsoft 365 E3/E5 licenses cover Windows 365 Enterprise prerequisites and provide AVD access rights, potentially making both options more affordable. 
• IT team capabilities matter more than most organisations admit. AVD does need more Azure expertise for deployment and ongoing management. If your team lacks these skills, Windows 365’s simplicity might be worth the premium. 
• Budget predictability vs. optimisation reflects your financial philosophy. Some businesses prefer Windows 365’s fixed costs for easier budgeting, while others want AVD’s optimisation potential. 
• Timeline for deployment could be decisive. Need desktops next week? Choose Windows 365. Have months to plan? The long-term benefits of Azure Virtual Desktop might justify the initial investment. 
• Future growth plans should influence your decision. Rapid scaling favours AVD’s elasticity, whilst stable growth suits Windows 365’s simplicity. 
• Integration requirements often tip the balance. Complex, custom integrations need AVD’s flexibility. Standard Microsoft stack? Windows 365 keeps things simple. 

Finding your perfect virtual desktop solution 

Still wondering which one to choose? AVD offers unmatched flexibility and cost optimisation potential, if you’re able to dedicate resources to it. Windows 365 is a simpler option for those who value ease of use over granular control. 

You could always use both platforms, though. Use Windows 365 for standard office workers who need predictable desktops, and deploy AVD for specialised use cases like seasonal workers or developers needing powerful resources. 

At Synextra, we’re happy to help organisations navigate this choice. As a boutique cloud MSP specialising in Microsoft Azure, we understand the nuances of both platforms and can help you make the right decision for your specific situation. 

Ready to modernise your desktop infrastructure? Contact us to find out more.