Windows 365 Cloud PC: what it is and how it works

Windows 365 Cloud PC is a Windows computer that runs in the Microsoft cloud and that you access over the internet from any device: a Windows laptop, a Mac, a tablet or a phone. The company pays a fixed monthly subscription per user, and Microsoft takes care of the hardware.

Microsoft launched Windows 365 on August 2, 2021, and presented it as the beginning of a new era of “hybrid personal computing”: the personal computer became a cloud service, designed for hybrid work. We wrote the first version of this article at launch. In November 2026, we rewrote it to cover what has changed since then and what Windows 365 means for a company.

Why did Windows 365 come about?

The pandemic moved a large share of work into people’s homes, and afterwards many employees wanted to keep that freedom. In 2021, Microsoft’s Work Trend Index report showed that 73% of employees wanted to keep the option of working remotely, but 65% also wanted more in-person time with their team. This “hybrid work paradox” required companies to find a way for people to work just as well from home as from the office, without putting company data at risk.

Microsoft’s answer was Windows 365: the entire Windows experience (each employee’s apps, data and settings) lives in the cloud and can be opened from any device, personal or company-owned.

How does a Cloud PC work?

• Windows runs in the Microsoft cloud. Each user has their own Cloud PC, with the processor, memory and storage chosen by the company from a list of configurations. The service uses the same technology as Azure Virtual Desktop, but it’s much simpler to set up and manage.
• You access it from any device: from a browser or from the Windows App, which is available for Windows, macOS, iOS and Android. Microsoft also sells Windows 365 Link, a small device made specifically for connecting to a Cloud PC.
• You pick up where you left off. The Cloud PC stays exactly as you left it, even if you switch devices: start a document on your office laptop and finish it on your tablet at home.
• It runs Windows 11. With the end of support for Windows 10 in October 2025, Microsoft retired the Windows 10 images for Cloud PCs.
• The cost is fixed, per user per month, no matter how much the Cloud PC is used.

Which editions of Windows 365 are there?

• Windows 365 Business: for companies with up to 300 users. It doesn’t require any other licenses and is easy to manage from the Microsoft 365 admin center.
• Windows 365 Enterprise: for larger organizations, with no user limit. Cloud PCs are managed from Microsoft Intune, alongside the company’s physical computers.
• Windows 365 Flex: for employees who work shifts, part-time or occasionally. A single license can cover several users, who take turns using the Cloud PCs.
• Windows 365 Reserve: a temporary Cloud PC that employees use when their computer is broken, lost or in for repair.

What are the benefits of Windows 365 for a company?

• Work from anywhere, on any device, with the same Windows experience. It’s useful for employees who work hybrid, for external contractors and for seasonal employees, who quickly get a fully configured computer.
• Data stays in the cloud, not on the device. A lost or stolen laptop doesn’t mean lost data or data in the wrong hands. Cloud PC disks and the network traffic between the device and the Cloud PC are encrypted.
• Security based on the Zero Trust principle: every login is verified with multi-factor authentication (MFA) in Microsoft Entra ID (formerly Azure Active Directory), and conditional access policies determine who can connect, from which devices and from which locations. Microsoft Defender for Endpoint protects Cloud PCs just like physical computers: it provides security recommendations and helps detect and investigate incidents.
• Ready-made security settings: Microsoft Intune has a security baseline dedicated to Windows 365, alongside the ones for Windows, Microsoft Defender for Endpoint and Microsoft Edge, so you don’t start from scratch.
• Administrators with minimal rights: the company can give someone only the right to manage licenses or Cloud PCs, without making them a global administrator.
• The same tools as for physical computers: Cloud PCs are managed alongside the company’s laptops, with the same policies, updates and security settings.
• Performance problems spotted early: the reports in Microsoft Intune show the connection quality and performance of each Cloud PC. If a user outgrows their configuration, the Cloud PC can be moved to a more powerful one (resizing), without reinstalling.
• Help with older apps: through the App Assure service, Microsoft helps eligible customers at no extra cost when a business app doesn’t work on Windows 11 or in Windows 365.
• New employees get started faster: a Cloud PC is created quickly, without waiting for a laptop to be delivered and configured, and when an employee leaves, access is closed immediately, without having to recover data from a laptop.
• A transition solution for Windows 10 computers: Windows 10 computers used to access a Windows 365 Cloud PC receive Extended Security Updates (ESU) at no extra cost. This buys the company time until it replaces the computers that can’t run Windows 11. Details in the article Are you ready for Windows 11?.

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What are the limits of Windows 365?

• You can’t work without a stable internet connection. The Cloud PC is accessed over the network all the time, so a weak connection means a choppy display and delays.
• The long-term cost: the subscription is paid monthly, for each user. For employees who work at the office every day, on the same computer, compare the cost over three to four years with that of a laptop.
• Very demanding apps (graphics, video, 3D design) need more powerful and more expensive configurations.
• Employees still need a device to connect from, and that device also has to be maintained and secured.
• Data still needs to be backed up. Documents in OneDrive and email in Microsoft 365 need to be backed up separately (see 5 reasons you need SaaS backup).

Windows 365 or Azure Virtual Desktop?

Both put Windows in the cloud, but they’re designed differently. Windows 365 has a fixed price per user and is easy to get started with, without any virtualization expertise. Azure Virtual Desktop is billed by consumption, lets several users work on the same virtual machine and offers more flexibility, but it takes more expertise to configure and manage. For a small or medium company, Windows 365 Business is usually the starting point. Azure Virtual Desktop is worth it when the organization has special customization needs or experience with virtualization.

When is Windows 365 worth it for a company?

• when you have employees who work from home, external contractors or seasonal employees;
• when employees use Macs or tablets but need apps that run only on Windows;
• when you have Windows 10 computers that can’t be upgraded to Windows 11 and you want a transition solution;
• when company data shouldn’t be stored on employees’ devices.

RezolvIT is an IT outsourcing company experienced in implementing cloud technologies and making remote work easier for employees. We help you choose between physical computers, Windows 365 and Azure Virtual Desktop, configure security and set up accounts for new employees. See IT infrastructure and IT productivity, or request a quote.