Microsoft cuts cloudy desktop prices by 20 percent, warns they’ll wake up slowly

Just in time to get buyers thinking as physical PC prices rise

Microsoft has told its channel partners to get ready for a 20 percent price cut for Windows 365 cloud PCs, effective May 1st.

The software giant told partners it will cut prices “to make Cloud PCs more cost-effective for small and medium businesses.”

Microsoft has framed the price cuts as an “update” to the service that will change its performance in two ways:

• Cloud PCs stay powered on for one hour after sign-out/disconnect;
• Reconnects after more than an hour might take slightly longer as the Cloud PC resumes from hibernation (with the same performance once connected).

Microsoft calls the above behaviors “a new on-demand start experience” and says it “helps deliver a lower price point while preserving the full Windows 365 Business value and capabilities partners and customers expect.”

Windows 365 for Business offers three cloudy PCs: a Basic $31/month machine with a pair of vCPUs and 4GB of memory, the $41/month Standard machine with 8GB of RAM, and a $66/month Premium product that offers four vCPUs and 16GB of RAM. All include 128GB of storage. Microsoft sells the same three cloudy PCs under its Enterprise plan. The only difference is that fleets of Business cloud PCs can’t top 300 machines, while the Enterprise plan allows unlimited users.

The lower prices will kick in whenever existing users sign up for a new subscription, and also apply to new users.

Microsoft’s price cuts come at a time when the price of physical PCs is set to rise, thanks to memory shortages and geopolitical issues caused by the USA’s war of choice against Iran. PC buyers may also have spotted analyst firm Gartner’s opinion that cloudy PCs now have lower total cost of ownership than laptop computers.

Virtual PCs have traditionally won favor from buyers in heavily regulated industries that have good reasons to frown on local data storage. Environments where shift workers share hardware, such as healthcare, are also big VDI users.

Gartner thinks more organizations are finding reasons to consider hosted desktops, and has predicted that by 2027, 20 percent of workers will use a cloudy PC as their main workspace, up from 10 percent in 2019.

Lowering the cost of Windows 365 therefore looks a lot like Microsoft trying to win more of the PC market at a time buyers have very good reasons to consider a move.

Microsoft offers two virtual PC products. Windows 365 is its simplified PC-as-a-service offering.

Azure Virtual Desktop (AVD) is Redmond’s old-school VDI offering, pitched at power users. Microsoft believes some AVD users will get the best experience when their virtual PCs run on-prem, either on its own Azure Local hardware or on Nutanix hardware: the latter company this week proudly began to offer on-prem AVD as a way to extend its desktop virtualization (VDI) portfolio. ®