Which Microsoft 365 Licence Does a Windows 365 Cloud PC Need?

A Windows 365 licence pays for the Cloud PC, not for the apps on it or the licences needed to manage it. For Windows 365 Enterprise, every user also needs Windows Enterprise, Microsoft Intune and Microsoft Entra ID P1, and Microsoft 365 Business Premium, E3 and E5 include all three. Office apps, email and storage come from that Microsoft 365 plan too.

Cloud PCs are often quoted as a single line: one desktop, one monthly price per person. The licence underneath is easy to miss until the first user signs in and finds no Outlook, or the administrator finds Intune is not licensed. This article sets out what each licence covers, so the quote you approve is one that actually works.

The short answer

Budget for two layers. The first is the Windows 365 licence, which gives each person a Cloud PC of a chosen size. The second is a Microsoft 365 plan that supplies Office apps, business email and storage and, for Windows 365 Enterprise, the Windows Enterprise, Intune and Microsoft Entra ID P1 licences Microsoft requires. For organisations of up to 300 people, Microsoft 365 Business Premium covers the second layer in one subscription.

What the Windows 365 licence covers, and what it does not

A Windows 365 licence gives a named user a dedicated Windows desktop that runs in Microsoft's cloud and can be reached from a laptop, a home computer or a browser. You choose its size: the processors, memory and storage it gets.

It does not include Microsoft 365 apps. Microsoft's gallery images come with the apps already installed, but each user still needs a Microsoft 365 licence that covers them, along with a mailbox and OneDrive storage. A Cloud PC without a Microsoft 365 plan is a Windows desktop with nothing to work in.

Windows 365 Business or Windows 365 Enterprise

Microsoft sells Windows 365 in two main editions, with different licensing rules.

• Windows 365 Business is for organisations of up to 300 users. Microsoft lists no licensing prerequisites to buy and deploy it. Cloud PCs are set up automatically with a standard image when a licence is assigned, and management is largely limited to assigning and removing licences unless users are also licensed for Intune.
• Windows 365 Enterprise has no per-tenant user limit and is managed in the Microsoft Intune admin center, with control over images, networking, policies and resizing. Microsoft requires each user to be licensed for Windows 11 Enterprise or Windows 10 Enterprise, Microsoft Intune and Microsoft Entra ID P1.

Enterprise is the edition to choose when you need to enforce policies on the Cloud PC itself, such as blocking copy and paste to personal devices or setting sign-in conditions with Conditional Access. Those controls rely on Intune and Microsoft Entra ID P1, which is why the licence requirement exists.

Which Microsoft 365 plans meet the Enterprise requirements

Microsoft states that the Windows Enterprise, Intune and Microsoft Entra ID P1 licences Windows 365 Enterprise needs are included in these plans:

• Microsoft 365 Business Premium, for organisations of up to 300 users. It also includes Office apps, business email and storage, Microsoft Defender for Business and Defender for Office 365 Plan 1.
• Microsoft 365 E3 and E5, which have no 300-user limit.
• Microsoft 365 F3, aimed at frontline workers.

Education plans such as Microsoft 365 A3 and A5 also qualify. The licences can be bought separately too, but for most small and mid-sized organisations a single Microsoft 365 plan is simpler to buy and to manage.

Why Business Standard is not enough on its own

Microsoft 365 Business Standard is a popular plan because it includes the desktop Office apps, email and storage. It does not include Microsoft Intune or Microsoft Entra ID P1. Business Basic and Business Standard come with the free tier of Microsoft Entra ID and rely on security defaults rather than Conditional Access.

That means Business Standard alone does not meet the Windows 365 Enterprise requirements. You can add the missing licences, or move the Cloud PC users to Business Premium. Compare both in one quote before deciding, because the answer depends on how many people need Cloud PCs and what they already have.

Adding Microsoft Copilot

Microsoft Copilot Business is the version of Microsoft Copilot licensed for smaller organisations. Microsoft describes it as an add-on for up to 300 users per tenant, sold with an annual commitment, that can be added to Microsoft 365 Business Basic, Business Standard, Business Premium, Microsoft 365 Apps for business and Microsoft Teams Essentials. Organisations with more than 300 users use Microsoft's enterprise Copilot licensing instead.

On a Cloud PC, Copilot works inside the same Microsoft 365 apps your people already use. Before switching it on, check your sharing settings: Copilot only surfaces content a user can already open, so files shared too widely become easier to find. Our article on Copilot and oversharing covers what to check.

Frequently asked questions

Does a Windows 365 Cloud PC include Microsoft Office?

No. The Windows 365 licence covers the Cloud PC. Office apps, email and storage come from a Microsoft 365 plan, such as Business Premium, E3 or E5.

Which licences does Windows 365 Enterprise require?

Each user needs Windows 11 Enterprise or Windows 10 Enterprise, Microsoft Intune and Microsoft Entra ID P1, as well as the Windows 365 licence. Microsoft 365 Business Premium, E3, E5 and F3 include all three.

Can I use Windows 365 with Microsoft 365 Business Standard?

Windows 365 Business has no licensing prerequisites, so it can run alongside Business Standard. Windows 365 Enterprise cannot rely on Business Standard alone, because Business Standard does not include Intune or Microsoft Entra ID P1.

Is Microsoft 365 Business Premium limited to 300 users?

Yes. Microsoft's business plans, including Business Premium, are for organisations of up to 300 users. Larger organisations usually license Microsoft 365 E3 or E5.

Can we add Copilot for Cloud PC users?

Yes. Microsoft Copilot Business can be added for up to 300 users on eligible Microsoft 365 business plans, with an annual commitment, and it works in the Microsoft 365 apps on the Cloud PC.

Where to start

1. Count the Cloud PC users and note which Microsoft 365 licence each one has today.
2. Choose the edition. If you need policies enforced on the Cloud PC itself, plan for Windows 365 Enterprise.
3. Check the licence underneath. Business Premium, E3 or E5 meet the Enterprise requirements; Business Standard does not on its own.
4. Size the Cloud PCs for the applications people actually run.
5. Decide on Copilot and review sharing settings before it goes live.
6. Get one quote that covers the Cloud PC, the Microsoft 365 plan and how the desktops will be managed.

Onprem2Cloud IT Solutions Co. is a Microsoft CSP partner based in Muntinlupa City, Metro Manila. Our Seatvane bundles combine a Windows 365 Enterprise Cloud PC, Microsoft 365 Business Premium and Seatvane, our portal for running Cloud PCs, with options to add Posturis and Microsoft Copilot Business, billed in pesos with official receipts. See our other in-house software on the software page, read what a managed Cloud PC service should let your administrator do, or contact us for a bundle quote.