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Understanding how Azure Virtual Desktop pricing works

Organizations considering Azure Virtual Desktop should factor in all the components that affect pricing, such as VM type and virtual resources.

Azure Virtual Desktop offers a compelling alternative to traditional end-user desktops, especially with so much of the world continuing to work remotely -- sometimes from personal devices.

As useful as Azure Virtual Desktop (AVD) may be, it can be difficult to determine how much it will cost to adopt AVD. IT administrators and executives should learn the basics of AVD pricing and the total cost of ownership (TCO) that comes with an AVD environment.

The basic components of Azure Virtual Desktop pricing

There are two main factors organizations will need to consider as they evaluate Azure virtual desktop pricing. First, organizations must consider AVD user rights. When IT staff installs a Windows operating system onto a physical desktop, the organization must have a license for that instance of Windows. The requirement for a Windows license does not go away just because Windows is running on virtual hardware in the Azure cloud.

The second cost component is the underlying Azure infrastructure that supports the Windows desktops. Windows virtual desktops run as virtual machines within the Azure cloud. These VMs consume resources such as networking, compute and storage, and Microsoft bills its Azure subscribers a fee based on the resources they consume.

Windows OS licenses for an Azure Virtual Desktop environment

The license cost associated with a Windows licensed desktop running in Azure is normally appended to the cost of the virtual machine. However, there are two circumstances in OS licensing that work a bit differently.

There are two main options for acquiring the necessary VMs: the pay-as-you-go model and reserved instances.

The first of these situations is when organizations have external users that need access to an Azure virtual desktop. In this case, organizations can opt to pay a monthly per-user fee for the external user rather than the normal licensing model. The caveat to this is that external users cannot be employees. The external user licenses are intended for contractors, suppliers and others who need access to a virtual desktop but do not work for the organization.

The other special consideration is that Microsoft will waive the Windows licensing requirements for organizations that already have an eligible Windows license. Microsoft refers to this as Bring Your Own License (BYOL). BYOL only works if an organization is using per-user licensing and has one of the following license types:

  • Microsoft 365 E3 or E5
  • Microsoft 365 A3 or A5 Student Use Benefits
  • Microsoft 365 F3
  • Microsoft 365 Business Premium
  • Windows 10 Enterprise E3 or E5
  • Windows 10 Education A3 or A5
  • Windows 10 Virtual Desktop Access per user

Azure infrastructure costs for AVD

Infrastructure considerations may determine a large amount of the TCO of running AVD. This consists of the storage, networking and other resources that VMs consume as they function as AVD virtual desktops.

There are two main options for acquiring the necessary VMs: the pay-as-you-go model and reserved instances. The pay-as-you-go model is best for organizations that need a lot of flexibility. It allows Azure to create or delete VMs on an as-needed basis. In doing so, the organization only pays for the virtual desktops that it uses.

On the other hand, reserved instances are best for organizations that know they will need a particular number of virtual desktops for an extended period. Microsoft offers a substantial discount for licensing those virtual desktops on either a one-year or three-year basis. Reserving a virtual desktop for a longer time usually results in a larger discount.

To put this into perspective, Microsoft recommends that IT admins should equip knowledge workers' virtual desktops with 2 vCPUs and 4 GB of RAM. One VM instance type that meets this requirement is Microsoft's B2s instance. According to the Microsoft pricing calculator, a pay-as-you-go B2s instance -- with the Azure Hybrid Benefit -- costs about $36.43 per month. If, however, an organization creates a one-year B2S instance, the price drops to $21.33 per month. A three-year instance costs about $13.72 per month. In this case, using a reserved instance that goes out at least a year or more saves about 41% for a one-year reservation or about 62% for a three-year reservation.

The savings associated with using a reserved instance vary considerably from one instance type to the next. This is an important consideration, as some users will likely need more powerful virtual desktops than others -- consider graphic design workers as an example. A virtual desktop with 2 vCPUs and 4 GB of RAM is generally suitable for knowledge workers, but Microsoft recommends 12 vCPUs and 112 GB of RAM for users that need to perform graphics-intensive tasks.

Persistent vs. nonpersistent virtual desktops on Azure

Organizations that provide their users with physical endpoints that run a local desktop provide each employee with their own dedicated Windows desktop. However, organizations could require employees to share a Windows desktop with someone else. Consider, for example, a call center that operates 24 hours a day. Such an organization would typically have users spread across three different shifts. If that call center employed 600 users, only 200 of them would theoretically ever be in the office simultaneously. There would be little need for the organization to purchase 600 Windows desktops. Instead, the organization could buy 200 desktops, each shared by three different users working three different shifts.

Azure Virtual Desktop can work the same way. While organizations can create persistent virtual desktops for every user, they also can create a pool of nonpersistent virtual desktops. Under the persistent model, each user has a dedicated virtual desktop. If that user makes a change, such as rearranging the icons on their desktop, that change will persist from one session to the next. On the other hand, nonpersistent virtual desktops automatically reset to a pristine condition at the end of each session. These desktops tend to be more secure and easier to manage. Additionally, IT can assign them to anyone as they do not retain any personal settings.

From a cost perspective, nonpersistent virtual desktops work similarly to persistent virtual desktops, aside from the fact that they are shared. However, Microsoft does make recommendations regarding the maximum number of users that can share a nonpersistent virtual desktop. In the case of a standard knowledge worker, Microsoft recommends no more than two users per vCPU. For call centers in which users perform simple data entry tasks, Microsoft recommends a limit of six users per vCPU.

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