Microsoft Exec Offers Tips For MSPs Building Azure Virtual Desktop Practices

'The cost of owning and operating a virtualization environment now has really gotten much cheaper, much easier, simpler to deploy [and] manage,’ Microsoft’s Scott Manchester tells CRN.

Microsoft solution providers continue to play a major role in bringing the vendor’s Azure Virtual Desktop and Windows 365 virtualization technology to customers, and recent innovations to the Microsoft virtual desktop stack should help them ride the growing Desktop-as-a-Service wave.

Scott Manchester, a 23-plus-year Microsoft veteran promoted to the role of vice president of Windows 365 (W365) and Azure Virtual Desktop (AVD) in September, told CRN that one example of the Redmond, Wash.-based tech giant’s technology advancements creating “more opportunities for partners to sell into customers” is the latest version of the Azure Stack HCI (hyperconverged infrastructure), which “changed the market” and should appeal to customers who prefer hybrid environments.

“Maybe they said, ‘Look, we still have these workloads around here. We don’t want to have two different management solutions. Sorry,’” Manchester said. “And now I think we’ve really closed the gap on that. And in general, the cost of owning and operating a virtualization environment now has really gotten much cheaper, much easier, simpler to deploy [and] manage.”

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Microsoft AVD, W365 Opportunities

Manchester joined a group of Microsoft executives earlier this month to help arm partners with data meant to entice customers around AVD and W365—including why a customer might choose between AVD and W365.

Microsoft even increased margins for Windows 365 Business, Enterprise and Frontline from 15 percent to 20 percent on Jan. 1, according to the vendor.

The executives’ presentations were part of AVD management tools vendor Nerdio’s annual NerdioCon event. And although the event focused on virtual desktop infrastructure (VDI), the Microsoft executives emphasized the importance of moving customers to the cloud to ready them for GenAI.

“In all my customer conversations, it’s very seldom that those two technologies don’t come up in the same conversation—moving workloads to the cloud and AI,” Manchester said on stage. “They’re top of mind [for] every C-level executive out there you're going to find. So be prepared to talk about it.”

Research firm Gartner predicts spending on Desktop-as-a-Service (DaaS) will reach $4.6 billion in 2027, up from $3.1 billion in 2023, with a compound annual growth rate of 10 percent. The firm also ranked Microsoft with the highest ability to execute and more completeness of vision in its September Magic Quadrant for DaaS.

The acquisition of VMware by Broadcom and Citrix getting taken private by a group of investment firms have the potential to rock the virtual desktop market, with executives from rival vendors including Nutanix and Leostream speaking out amid the disruption.

During Manchester’s presentation at NerdioCon, some of the data he shared to help partners in their cloud conversations with customers include:

Some of the differences between AVD and W365 Manchester highlighted in his presentation are:

From the stage, Manchester spoke about the generational importance of W365’s SaaS offering due to fewer IT graduates becoming VDI administrators.

“There are not a lot of people that understand core VDI technologies,” Manchester said from the stage. “And people aren’t graduating with VDI degrees anymore, folks. You guys are the last generation that are really going to be the experts in VDI. The market is eventually going to move to more and more SaaS-type solutions. But there’s a huge market opportunity today, a huge opportunity for you to take your knowledge and skills and deliver the right solution to the products using the right technologies.”

As for whether Microsoft is taking share from Citrix and VMware, Manchester and his colleagues characterized Citrix and VMware as Microsoft partners and did not directly weigh in on potentially seizing market share from the legacy VDI vendors.

Manchester told CRN in his interview that the three vendors have worked together to allow AVD customers to bring benefits onto Citrix or VMware environments. And W365 has a generally available (GA) add-on program with Citrix, with a VMware one in development.

Here’s more of what Manchester had to say about the partner opportunity with AVD and W365.

Is the services-led partner motion still important for growing the AVD customer base?

It certainly is. Before I moved into this role building our virtualization solutions, I led many partner teams at Microsoft. In fact, my first job at Microsoft was a tech evangelist. So it’s always been about how do partners amplify the value of our products and services? It has been the theme of my entire career at Microsoft.

And so I definitely brought that to AVD. The very first inception of AVD, I’d say, half my team was focused on how partners extend it. So we have multiple different programs. There’s the approved provider program—that’s where Citrix and VMware can displace parts of our stack and bring their virtualization solutions and protocols.

And then there’s our value-added partners. … It amplifies our reach, amplifies our value. And no matter how much we innovate, there’s always room to wrap something around it to make it even more efficient, especially when you think about these multitenant scenarios [for] organizations managing lots of tenants at scale.

How should partners talk to customers about the benefits of AVD?

One is increased security. And then there’s the total cost of ownership of owning and managing your compute environment.

And then there’s the sustainability of it as well. So many organizations now, especially companies across Europe, in particular, have very specific goals of reducing carbon gases and greenhouse emissions.

And virtualization turns out to be a very powerful tool across all three of those dimensions. From a security point of view, [it’s] isolating the physical device from the corporate workload. Usually that means isolating the networks, isolating the environment, creating a whole other layer of security.

And then that total cost of ownership. When you look at not just the compute pieces—because if I’m going to buy a $200 laptop, it’s going to be hard to compete with that with a virtualized environment.

But if you think about that total cost of ownership—securing that device, managing that device and giving the right flexibility—because what are the odds that $200 machine is going to meet the needs of that user over the period of time that they’re employed?

At some point in time, they’re going to install some application or some tool or something and that machine isn’t going to meet their needs. What’s the cost to take that laptop and upgrade it to a bigger laptop? If you really do the math of the time, energy, potential data loss, downtime, recycling the old machine, when you think about the whole big picture, that total economic impact or total cost of ownership becomes pretty significant.

And then the sustainability—centralizing all this compute into the cloud and then taking the client device and extending the life of that from three years to five or seven years.

And then all the shipping. All the whole economics of getting physical hardware to that person. Not just once I bought it, but how did that thing end up in the box at the store you bought it from to begin with? What’s all the work and the emissions that happened to get into that state. And we have two really good reports that we published … on the TCO of virtualization.

But we have two of these reports that we have available on the public domain that organizations can download and partners can use and facilitate these great conversations with customers. They really get into specific details. In fact, the one on carbon emissions, the sustainability report gives very exact numbers that these organizations can actually use to show that they reduced their carbon emissions by this much by using AVD or Windows 365 technologies.

What are still some of the obstacles partners face in bringing customers to AVD

and any advice on overcoming those obstacles?

With the technologies that we’ve provided—AVD, Windows 365—they’re pretty much all cloud.

And many organizations are ready to go full cloud and full modern management, modern identities. But many organizations have very specific needs to stay on-prem or to have hybrid types of identity systems.

And we didn’t really have a Microsoft first-party offering up until recently. And I think with Azure Stack HCI, the ability now to extend your AVD deployments on-prem … we had forethought around this hybrid support when we architected AVD.

We’ve been waiting for this moment to be able to bring it on-prem because it was architected to support a hybrid model—the way our protocol works, the way the whole management plane works. Everything was designed to allow the workload to span different data centers, different regions and public clouds.

That’s a big thing that’s changed the market and created more opportunities for partners to sell into customers that maybe they said, ‘Look, we still have these workloads around here. We don’t want to have two different management solutions. Sorry.’

And now I think we’ve really closed the gap on that. And in general, the cost of owning and operating a virtualization environment now has really gotten much cheaper, much easier, simpler to deploy [and] manage. Nerdio really amplifies that.

And then from a technology perspective, some of that is just about documentation and giving the right tools to these partners to be able to go out and to tell a very compelling story, how they can help organizations be more secure.

And then again, the elasticity part. Those are the elements that really resonate when you’re talking to customers that have gone through the pain that COVID put on them in terms of being able to quickly adjust to this new work environment.

And then how secure were they when they had to make these changes to allow people to be productive outside of the office? Did that open up attack vectors for them? Did they get hacked? How do they want to address those things going forward?

So I think arming yourself with all the details of the value prop of virtualization—and the list has just gotten so much longer recently—that would be my call to action to them. And we have these reports available for them to consume and share.

Looking ahead, what should AVD users be excited for?

Azure Stack HCI is just a few weeks old now. Going forward with our B2C and B2B opportunities with our identity system, allowing people to open that market up a bit more. That’s some of the big stuff.

One of the other things we announced at Ignite that spans both AVD and Windows 365 is the new branded Windows App … an app that now unifies AVD, Windows 365, Microsoft Dev Box … RDS [Remote Desktop Services] and just remote desktop. … Different services integrated into a single modern application.

It has taken years and years and years of us learning, shipping lots of clients. And these clients have got these storefronts where you get this great opportunity for customers to give feedback and rate the solution. And I think we’ve taken all of that learning and really built some very amazing new clients that I think will really resonate with customers and partners.

It’s easier just to deploy, manage and set up as well.

Any particular messages to partners building a W365 practice?

We also announced GPU support for Windows 365.

There’s been a lot of demand for that. Windows 365 is what we call a cloud PC solution. And though that seems like an obvious name, there’s a lot that goes into that for Microsoft to create this terminology. … It means there’s an experience that’s consistent with the physical PC delivered from the cloud.

And so some of the things we think about, hey, this laptop here has a GPU in it. And you can do very specific things with that machine. So bringing those capabilities that people have always come to know and love on a physical PC up into the cloud as part of that journey.

We brought the ‘always on, always ready and resume right where I left last time I logged in’ experience that was part of the original promise of a cloud PC. Now bringing GPU support and a whole bunch of other rich capabilities further closes that gap between traditional computing on a physical device and computing in the cloud.

The other thing we announced, an admin value-add, was bringing some of our AI technologies to bear with Windows 365.

We announced a couple of new features and capabilities that are in preview now. One is the cloud PC recommender. It effectively monitors the behavior of all of your users in a tenant to monitor whether the machine they’re using is undersized, oversized, underutilized or rightsized.

We can look at that usage pattern and say, ‘Look, they're constantly exhausting the RAM or compute resource. They could probably use a larger machine and would be more productive.’

Or vice versa, where they’re only using 50 percent of the CPU. Perhaps that machine can be downsized and you can save some money.

Or they haven’t logged in in the last 30 days. Maybe you want to recover that license and assign it to somebody else. Or everything’s running just right.

Previously, we'd announced some capabilities around where that workload is running. Is it running in the right region to give the lowest latency and the best experience for users? So we provide these tools that will say what their connect time is, what the latency is and all these things to provide insight.

There’s a lot more coming that I can’t talk about today [that is] really integrating more of our copilot-type experiences into the solutions.

Is building an Azure practice helpful for partners looking to build an AI practice?

Absolutely. Putting workloads in the cloud where these LLMs [large language models] are running, obviously, there’s some value there in terms of performance and opportunities.

You can scale. Everything’s elastic in the cloud. So there you can only imagine the areas where we can innovate, bringing together these copilot experiences on the cloud.

And I think customers that are looking at virtualization and looking at modernizing are obviously looking at all the technologies in this space. So copilot and virtualization, we often have these conversations side by side with customers. Because they’re all about getting modern, getting productive.

Is there a message to AVD partners working with customers with existing Citrix and VMware users?

VMware and Citrix have been amazing partners for us. We have a program both with AVD and Windows 365 where they can extend the value of that.

On the AVD side, we’ve had what is called the approved provider program for Citrix Cloud and VMware Horizon on Azure—both of those can be used and bring the full benefits of AVD entitlements. Primarily, people want their Windows Enterprise multi-users. So they get that value using those solutions.

On the Windows 365 side, both Citrix and VMware are working on the add-on program … very similar to the AVD side, but we retain the core infrastructure and platform of Windows 365. But you can layer on their protocol. And it’s a toggle switch, so you can turn it on for some users and turn it off for others.

And it gives you the ability to leverage Citrix redirection capabilities, their protocols and the clients that they provide. And the same thing with VMware, but the VMware hasn’t gone GA yet. They’e in development. The Citrix one has been GA.

And of course, obviously there’s been a lot of turmoil as those organizations have gone through these acquisitions and such. I would say … give them some grace. These things happen and they’re committed to their customers and they’re committed to the industry.

How should Microsoft solution providers talk to on-premises customers

could these customers become 100 percent cloud?

It’s meeting customers where they're at. There are certain industries and certain customers that maybe it doesn’t make sense to move all their workloads to the cloud, whether they just build out a data center and spend millions of dollars or hundreds of thousands of dollars investing in hardware and this data center, and they want to get the full value out of that capital expenditure.

And maybe when that expires over time, they might make that transition to the cloud. Perhaps they have needs that are very sensitive to latency and having that workload running very close to where the users physically are.

Or there could be regulatory constraints where those workloads are required to run on-prem and be secured in some way that they can’t do today in a public cloud.

Those are the primary reasons that we still see people on-prem. And there is still a very large install base of people using virtualization on-prem. … We architected Azure Virtual Desktop to be a hybrid solution, to be able to run anywhere. And so it was a really natural extension for us to build support of AVD on top of Azure Stack HCI. And the response has been unbelievable.

We knew there was a very strong demand for this. But even with that knowledge, we’ve been really surprised by the amount of adoption that we’re seeing with this already. And it’s just a few weeks in market. There’s a big market still there for hybrid and on-prem workloads.

You’ve seen good HCI adoption by partners so far?

We had a really long preview program for HCI. … We’ve given a lot of time for partners to get ramped up on it. And I think they’re ready to go.

It is one of those more complex decision trees also for customers. It’s a really good [place] where SIs and MSPs can bring a lot of value to customers trying to evaluate what workloads can I move to the cloud, how do I keep things in sync.

The space gets exponentially more complex when the workload spans both on-prem and the cloud. That’s where partners can really come in and bring a lot of value.

And constantly evaluating, hey, these workloads could move to the cloud seamlessly and helping those those customers know when when they can continue to find value, whether it’s moving more to the cloud or moving more on-prem.

Have you seen good adoption among businesses of a variety of sizes?

The biggest growth vector is going to be in the small to medium businesses. Enterprises have been aware of and have been using traditional virtualization technologies for decades.

The small businesses, they’re always popping up and oftentimes they don’t have internal IT staff. And they’re not aware of these opportunities and these technologies.

And so we’ve optimized both AVD and Windows 365 for small businesses and for partners to be able to go address that market.

Windows 365 has a very specific offering, Windows 365 for Business, that basically scales down to one.

There’s no fixed costs. You don’t have to amortize a fixed cost across any number of users. You can buy one user and give them a cloud PC. And you can manage it efficiently with the Windows 365 Business portal that we offer as well.

And so that gives a great tool to our partners to be able to go off and resell these things down to the smallest organizations, what we call VSB, a very small business.

AVD was always architected to reduce the amount of the fixed costs, being able to support modern identities and modern management solutions. So there’s not a lot of overhead and resources you need to provision. Our gateways run in the cloud. The whole management plane runs in the cloud. So that’s always been an offering that’s been able to scale down to really small businesses as well.

Getting more of the Azure Virtual Desktop service running on modern identities, that’s the investment that we’ve nearly closed the gap on.

We’re really close to saying every component with an AVD service now can run in an Entra ID only model. And so that cuts down the cost … getting modern with the identities is a big step. … We’re in preview. I can’t give a specific timeline, but I would expect things to be completed by this calendar year.

Anything else fueling the customer demand for these products and services?

We’ve published a lot of really great customer success stories both on AVD and Windows 365. They’ve all been really interesting about what was the driving factor that either caused them to shift from some previous solution or just to embrace virtualization technologies for the first time.

The ones I like to celebrate the most are people that we’ve turned on to virtualization that hadn’t used it before, hadn't found application for it that now just unlocked their opportunity to be more efficient, to lower carbon emissions, happier employees, and to be able to hire a workforce that’s more distributed. … When we formed the team for Windows 365, we started hiring in February of 2020.

That’s an interesting timeframe because it was March that Microsoft shut the offices down. And we basically ended up hiring the entire team remote. There are still people I haven’t met on my team that we hired. … But we live that same experience. How did that open up the opportunity for me to hire people? The best talent, regardless of where they were, regardless of how close they were to a Microsoft office. They just hired the best talent no matter where they were.

We were one of the first teams that literally built the team, built the service and shipped it—all during COVID. It opened our eyes to the realities of what many organizations are facing. Trying to find talent, retain talent, get talent productive in a secure way. … We published a paper I was a co-author of on how Microsoft internally is using Windows 365.

Let’s say that this laptop needed to be repaired. What do you do while that machine is down being repaired? You’ve lost all productivity. … So Microsoft uses Windows 365 in the short instances in between a machine going in for repair.

We also offer it as an alternative to PC refresh. When you first join Microsoft, you get a physical PC, and when you’re up for renewal, that’s an opportunity where you can opt in to say, ‘You know, I’ll just keep this device and I’ll get my compute from the cloud.’

And it’s been so popular inside of Microsoft because it gives them all that flexibility. When I travel, I can just take whatever my favorite tablet is, whether it’s an iPad, an Android device or a Windows device.

Frankly, I only need to take my phone. There’s tons of innovation we’ve done to make phones where you can extend the screen to a second screen, and it has a full, rich computing experience. … We talk about job satisfaction and retaining talent when you’re very modern and you’re creating a lot of flexibility. … The Windows App will be MAM-supported in the future.

So that means mobile application management. That means I can set policies at the application level. And what that does is unlock this whole BYOD opportunity.

So organizations are trying to save money and provide flexibility to their employees. Having the ability to secure the environment and ensure that you can set the right policies at an application level that allows the user to use their own device, those things coming together really create more opportunities to have a total cost of ownership that’s lower, a more elastic experience and a better experience for people to feel like they’re coming to an innovative company that’s forward -looking.