What this means
This change removes the earlier dependency on Azure Local and gives you a broader hybrid option. Azure Arc links your on-prem machines directly to the AVD control plane.
With this change, organisations are able to keep desktop workloads local for latency, data residency or regulatory motives, while management, identity, and session brokering remain coordinated via the AVD control plane.
How the hybrid model works
- Each Arc-connected VM or physical server becomes an AVD session host.
- Brokering and identity run in Azure.
- Data stays on your local network.
- You keep your current hypervisor stack.
This gives you cloud management without shifting workloads to Azure before you’re ready.
Why this matters for companies
Data residency and compliance
You keep data on local networks while using Azure’s control plane. This helps in financial services, healthcare, government and other regulated sectors.
Hypervisor choice and investment protection
You don’t need to replace Nutanix AHV, VMware vSphere or Hyper-V. You reuse your existing HCI stack and keep earlier investments relevant.
Unified management and identity
You get centralised brokering, Microsoft Entra integration and Azure policy/monitoring for all AVD resources — cloud, edge or on-prem.
Edge and latency-sensitive sites
Remote offices, manufacturing, care facilities and graphics workloads benefit from local session hosts with reduced jitter.
Operational flexibility
You can run on-prem now and move hosts to Azure later. The control plane stays the same.
Technical and Operational Considerations
- Supported platforms and OS constraints: Preview supports Windows Server 2016–2025 and Windows 11 Enterprise single-session. Multi-session is not included.
- Networking and connectivity: Arc-enabled servers require outbound connectivity to Azure endpoints. Private endpoints, service endpoints, or strict firewall rules may require validation.
- Lifecycle management and tooling: Partner solutions manage provisioning, image lifecycle, scaling, and GPU drivers. Organisations must assess partner capabilities or build their own automation.
- Licensing and billing: GA pricing is not yet defined. Cost modelling should consider partner tooling, on-prem infrastructure, and potential Microsoft charges.
- Security and governance: Arc projects servers into Azure resource groups, enabling consistent management via Azure Policy, Defender for Cloud, and Sentinel. Data-in-place remains local, while metadata and control traffic traverse Azure. Identity and access control are handled via Microsoft Entra, including SSO and conditional access.
What Microsoft did well
- Practical hybrid model: Supports multiple hypervisors and physical servers, matching real enterprise environments.
- Centralised governance and identity: Management, policy, and identity remain coordinated via Azure, simplifying compliance and auditing.
- Partner-centric operations: Leveraging ecosystem partners preserves existing operational workflows.
- Edge and latency use cases enabled: Local session hosts improve performance for remote offices, graphics, or voice workloads while central brokering ensures control.
Possible Risks and Caveats
- Windows 11 Enterprise Multi‑Session limitation: Preview supports only single-session Windows 11 Enterprise. Organisations relying on multi-session consolidation may face higher costs and lower density.
- Operational complexity and partner dependency: Lifecycle management, scaling, and provisioning rely on partners. Organisations must assess partner maturity, SLAs, and integration depth. Lack of partner support may require significant in-house effort.
- Connectivity and resilience: Arc-enabled servers need stable outbound connectivity to Azure. Disconnected or intermittently connected sites must plan for session brokering and monitoring failures. Offline behaviour is not fully documented.
- Costs and licensing uncertainty: GA pricing and billing for cloud-brokered on-prem hosts are not yet defined. Cost modelling should include partner tooling, on-prem infrastructure, and potential Microsoft charges.
- Performance claims need validation: Vendor claims on latency, Teams optimisation, and local-host performance are environment-dependent. Organisations should validate in pilot environments.
- Management surface area: Adding Arc agents at scale affects patching, agent management, and troubleshooting. Large estates may experience variability in agent stability, requiring extra operational oversight.
