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Microsoft contemplates new DaaS product, 'Cloud PC'

Unexpected consumption costs mar companies' adoption of the cloud. The reported Microsoft Cloud PC, with per-user pricing, could ease that issue.

A now-deleted job posting indicated that Microsoft is working on a product called Cloud PC, a desktop-as-a-service offering with a flat, per-user price.

The news comes as COVID-19 drives the number of at-home workers to an all-time high. Therefore, companies would welcome a DaaS product that delivers virtual desktops from the cloud at a fixed price, analysts said.

The job posting, first reported by ZDNet, seeks a Cloud PC project manager, saying the service builds on Windows Virtual Desktop and works on Microsoft's Azure cloud platform. It touts scalability and other benefits of using the cloud while stating Cloud PC would charge a fixed fee for each user. The pricing model seems to address criticism that the typical consumption-based pricing for cloud services is too expensive.

The listing further notes that the development of Cloud PC would connect to Windows, Office and Microsoft's cloud-based management suite. Beyond that, details of how the product would differ from Windows Virtual Desktop were scarce.

Reports of new Microsoft products under development do not mean they will come to fruition. Several years ago, industry observers said Microsoft was working on a subscription-based Windows OS, called Windows 365. The company has yet to release such a product.

Pushing the cloud

Forrester Research analyst Andrew Hewitt said a new DaaS product would accommodate an expected migration of computing to the cloud. Forrester expects that about 80% of computing will take place in the cloud in the next five to 10 years, and providers will deliver it through thin-client devices.

If Microsoft adopts flat pricing, then it could be a lure for users. According to Enterprise Strategy Group research, about 25% of DaaS users have said the main drawback of the technology was that expenses, including consumption costs, were higher than anticipated. A subscription fee could bring clarity to prices, reducing the potential for sticker shock.

A fixed per-user price would be a rarity in the DaaS market, Hewitt said. The providers typically tie cost to the consumption of computing power in their cloud. However, Microsoft could place limits on computing power, which would make its pricing model less attractive, Hewitt said. Some workers, such as those using GPU-enabled virtualized workstations, could easily exceed standard levels of processing power.

"If you were able to get pretty predictable cost [or] fixed pricing over a period of time, and you didn't care about the hardware, then that would [be a positive]," he said.

Also, businesses looking for a single low-risk and trusted vendor that controls the operating system, cloud platform and DaaS service would find Microsoft attractive, Constellation Research analyst Dion Hinchcliffe said.

Seeking growth

Hinchcliffe said Microsoft had avoided DaaS so far. Microsoft partners like Citrix and VMware have adequately served the market, and there did not seem to be much room for growth, he said.

The pandemic has changed the equation, Hinchcliffe said. Companies now have a pressing need to enable remote work, and DaaS is a prime means of doing so.

"You can be sure that Microsoft saw the writing on the wall as remote work took over much of the world," he said.

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