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Microsoft puts its OS in the cloud with Windows 365

Microsoft said Windows 365 gives companies a simple way to use cloud-based desktops at a predictable price. The company will release two versions of the product in early August.

Microsoft has announced Windows 365, a desktop-as-a-service product that comes with a fixed monthly per-user price.

The company unveiled the cloud-based service at its Inspire conference Wednesday, saying it will release business and enterprise versions Aug. 2. Windows 365 will deliver Windows 10 and, once it's released, Windows 11 virtual desktops. Both desktops will run on Windows, Android, macOS, iPadOS and Linux devices.

Windows 365 pricing differs from Microsoft's other desktop-as-a-service (DaaS) product, Azure Virtual Desktop. Microsoft charges a flat rate per user for Windows 365, rather than basing pricing on consumption.

A fixed rate is attractive to companies that want cloud-based virtual desktops but are concerned about unpredictable expenses. Enterprise Strategy Group research shows that 25% of DaaS users said pricing based on consumption was higher than expected.

"[Consumption costs are] always a challenge and a consideration for enterprises," said Forrester Research analyst Andrew Hewitt.

Exact pricing details were not available. Microsoft said it will release more information when the product launches.

Microsoft designed Windows 365 for organizations with minimal IT resources and little virtualization experience. The product includes built-in performance monitoring tools, and organizations using Microsoft Endpoint Manager for securing and managing physical devices can do the same for Windows 365.

A Windows 365 Cloud PC
Microsoft has announced Windows 365, a simplified virtual desktop offering.

"Windows 365 capabilities allow you to get the same benefits of [virtual desktops], as far as scalability and security, without the overhead of a more complex solution," Hewitt said.

Microsoft pitched Windows 365 as a tool for hybrid work, saying it will provide employees with access to Windows, regardless of their location or device. The company said the service retains a user's apps, data and settings, meaning workers can switch devices and pick up where they left off.

Constellation Research analyst Dion Hinchcliffe said he expects companies to seriously consider Microsoft's offering as they evaluate virtual desktop products.

"With companies still retooling to create a more sustainable, longer-term solution for remote and hybrid work configurations, a new entry right now from Microsoft would [be timely]," he said.

Industry observers have long speculated that Microsoft would release a subscription-based Windows OS called Windows 365. Last year, the product seemed closer to being released when Microsoft posted an advertisement seeking a project manager for a DaaS product called Cloud PC.

Enterprise Strategy Group is a division of TechTarget.

Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily NewsWalpole TimesSharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.

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