Windows Virtual Desktop On-Premise: Practical Guide for 2025
A bank in Frankfurt needed traders to run a latency-sensitive Bloomberg terminal while keeping transaction records inside Germany. Shifting everything to Azure conflicted with BaFin retention rules, so the infrastructure team turned to Windows Virtual Desktop on-premise. Stories like this are common. Whether it is HIPAA, CJIS, or a board that simply refuses to lose physical control, the request lands on the desk: "Make virtual desktops work, but keep them here." That is exactly what an Azure Stack HCI cluster running Windows Virtual Desktop delivers. We have built similar environments for hospitals and design studios, and the recurring theme is a tight mix of control, compliance, and performance that public cloud alone cannot always satisfy.
Cloud, on-premise, or both? Understanding the architectural fork
Windows Virtual Desktop started as a cloud service, but Microsoft quietly opened the door for on-premises deployment through Azure Stack HCI. The control plane remains in Azure; session hosts, user profiles, and data can live inside your racks. This split keeps management familiar while satisfying data-sovereignty requirements.
Choose pure cloud when seasonal scaling, global reach, or minimal capital expense dominates the brief. Choose on-premise when regulators demand local storage or when graphics-heavy workloads choke on WAN latency. Hybrid often wins: keep sensitive workloads local, burst development desktops to Azure after hours.
Key differences you will notice on day one
- Provisioning speed: Azure spins VMs in minutes. On-premise speed depends on your hyper-converged nodes, usually longer until storage replicas settle.
- Maintenance rhythm: You patch physical hosts and firmware yourself. Azure abstracts that away.
- Licensing nuance: Windows 10 or 11 Enterprise per user remains mandatory, but you need additional Datacenter‐edition cores for the HCI nodes.
Infrastructure and licensing checklist
Many proof-of-concepts stall when the bill of materials turns up late. Below is the condensed version we run through with clients before any purchase order.
Compute: Two or more Azure Stack HCI certified nodes, typically dual-socket Xeon or EPYC with at least 384 GB RAM per node for mixed office and CAD workloads.
Storage: NVMe SSD tier for OS disks; capacity tier on SATA SSD or HDD can work, but watch IOPS. ReFS with deduplication lowers footprint roughly 20 percent in practice.
Networking: Redundant 25 Gbps links per node keep PCoIP or RDP Shortpath snappy. We insist on Network ATC in 2022 HCI builds to automate traffic segregation.
Licensing: Windows 11 Enterprise E3 or E5 per named user, plus Remote Desktop Services CAL with Software Assurance. The HCI cluster itself needs Windows Server Datacenter per core. Budget another 15 percent for Veeam or Commvault backup agents.
Time investment: A mid-size deployment (400 desktops) usually spends three weeks on hardware staging and two weeks on image optimization, provided group policies are already documented.
Security considerations that cannot wait until go-live
• Enable Credential Guard inside the golden image to cut off token theft.
• Place the HCI cluster behind a next-gen firewall; we have seen misconfigured east-west traffic expose SMB shares during testing.
• Use Conditional Access in Azure AD even though sessions run locally. It keeps stolen credentials from opening your front door.
Compliance, cost, and performance trade-offs
Running desktops in your own racks satisfies auditors, but it is not automatically cheaper. Hardware amortization and power add up, yet Spiceworks numbers show up to 30 percent lower operational costs after three years because data-egress fees disappear and admins patch a fixed footprint rather than a fleet of cloud VMs.
Performance is where on-premise can shine. A design firm we support renders 4K textures locally at 90 FPS because GPUs sit next door, not 80 milliseconds away. Conversely, if you expect hundreds of new contractors each quarter, public cloud elasticity beats any on-premise cluster you can afford.
Compliance remains the top driver. Healthcare providers cite HIPAA, finance teams mention PCI DSS and GLBA, while government agencies deal with FedRAMP equivalency. Locating the session hosts in a controlled facility simplifies evidence gathering: physical access logs, CCTV footage, and chain-of-custody records exist in one place.
What often surprises new adopters is ongoing firmware management. Azure auto-patches its hosts; your cluster does not. Allocate maintenance windows and budget a secondary node for rolling updates.
When a hybrid model makes financial sense
Keep baseline staff on local hardware and burst interns or seasonal testers to Azure. A 70/30 split frequently maximizes license utilization while capping peak power draw below your data-center lease threshold.
Pulling the threads together
Windows Virtual Desktop on-premise is not a relic from pre-cloud days; it is a grounded response to sovereignty, performance, and sometimes plain board-level risk appetite. Teams that map real regulatory language to technical controls, size hardware correctly, and automate patching enjoy a stable platform that sits comfortably beside Azure services. We recommend starting with a week-long assessment workshop, then decide whether a pilot or a full cluster makes sense. The organizations that succeed take a phased path and keep security baked in from the first image build.
Frequently Asked Questions
Q: How does Windows Virtual Desktop run locally if the control plane lives in Azure?
Azure manages brokering and diagnostics, while session hosts, profile containers, and FSLogix storage remain on your Azure Stack HCI cluster. Clients authenticate against Azure AD, receive a connection string, then establish an RDP Shortpath channel directly to your data center.
Q: What sizing rule works for graphics-heavy workloads?
We allocate one NVIDIA A16 GPU profile (4 GB vRAM) per simultaneous user running Autodesk Revit or similar. Memory rarely bottlenecks; GPU VRAM and storage IOPS are the usual choke points, so start load testing there.
Q: Can existing VDI licenses transfer to Windows Virtual Desktop on-premise?
Citrix or VMware Horizon licenses do not transfer. You still need Windows 10 or 11 Enterprise plus RDS CALs. However, existing Microsoft Software Assurance often covers the server cores, so check your agreement before buying new licenses.
Q: What is a realistic deployment timeline for 500 users?
Assuming rack space, power, and cooling already exist, hardware lead time now averages six weeks. Build, image tuning, and pilot groups add four more. Ten to twelve weeks from purchase order to first production logon is typical in 2025.