Microsoft Ignite: AI, New Cloud PC, & Windows Coming to VR

At Microsoft’s annual IT conference, the company focused on security and AI, but also made an intriguing VR announcement for Meta’s Quest 3 and launched a small cloud client PC. (Here is Microsoft’s summary blog post.)

Copilot and Security

Most of Ignite was focused on improved security in Windows 11 and giving developers APIs for building custom agents around Copilot. We also got new details on AI features coming to Copilot+ PCs including the eventual rollout of Recall (initial coverage here), Click to Do, enhanced Search, and Super Resolution in Teams.

Windows 365 Link

Small PCs aimed at consumers are fairly niche (sometimes tasked as home media servers), as consumers prefer the flexibility of laptops, and gamers looking for a desktop need larger cases with room for more GPU, power, and cooling. Apple is the exception that proves the rule: it does sell the Mac mini in volume, and the once small Mac mini is now positively tiny with the Apple silicon M4 generation. However, the Mac mini serves primarily as an entry point for MacOS on the desktop – Apple just really likes minimalist design as part of its brand ethos.

Small computers make a lot of sense in the enterprise as easier-to-manage desktops either with local resources (like Lenovo’s ThinkStation) or entirely web-based like (such as Chromeboxes). Microsoft is now getting into this market with what looks like a tiny Surface desktop, the Windows Link 365 arriving April 2025. However, this $350 box is not intended to compete with other small enterprise Windows PCs (or Apple’s Mac mini). The Windows Link 365 has an un-named Intel processor, no fans, and only the RAM and storage needed to run a stripped-down, hardened version of Windows for Windows 365 Cloud, select video conferencing apps (ex: Teams and Webex), and a browser. The Windows Link 365 supports dual 4K monitors and has both USB (x4) and Bluetooth 5.3, so it should work with nearly any accessory.

No files are stored locally, and while IT managers can manage it easily with Intune, end users can’t configure a thing. Essentially, this is Microsoft’s version of a Chromebox, and its existence says less about Microsoft’s competitive position vs Google and more about how Microsoft wants to grow its subscription cloud software and sees a market for secure, purpose-built hardware to run it. The $350 price point for the hardware is actually on the high side, though the selling point is security and TCO, so Microsoft is likely to get a pass.

Anyone without rock solid Internet access would be better served with an actual PC, but this solution should be appealing to heavy Microsoft 365 Cloud users and could eat into thin clients from Lenovo and Dell. Microsoft seems to admit as much, promising that once it “gets the product experience right,” it will allow partners to build their own Windows 365 Link boxes.

Windows 11 on Meta Quest 3/3S

Microsoft is abandoning its HoloLens mixed reality hardware, but under Satya Nadella, the company is all about pushing Microsoft software and services on any platform. It was therefore entirely unsurprising that Microsoft had Office apps for the Meta Quest 2 (and 3), and was a launch partner for the Apple Vision Pro with native Microsoft 365 office apps there as well. The next step is bringing Windows 11 to the Meta Quest 3 family where the headset acts as the monitor for your local PC or virtual Windows 365 Cloud PC. Microsoft is calling this a multi-monitor workstation, probably to head off people thinking that they can use it for latency-dependent gaming.

Using a headset as a private, large or multi-monitor setup is definitely a good use case, and opening it up to all of Windows rather than just a browser and select Windows 365 apps adds a lot of utility. Still, there are limitations with today’s mcirodisplay technologies in terms of resolution and field of view, and it can be uncomfortable to wear a headset for the amount of time you might be working on a project. The Apple Vision Pro has higher resolution but it’s less comfortable than the Quest 3 or 3s.

Compounding these issues, some users – particularly older users – may struggle with focusing on fine text at the headset’s fixed distance focal length – and users who need vision correction lenses added inside the headset can find the edges of the display distorted. I love working in VR, but compared to a physical multi-monitor setup it isn’t quite as productive and it gives me a headache. That said, I’ve been covering this space for years, and each iteration gets better. Large virtual monitors are a key use case for investing in head-mounted displays, whether that’s a mainstream headset like the Quest 3, a high end spatial computing platform like the Apple Vision Pro, or a pair of display glasses from XREAL that plug into your phone or laptop.

To discuss the implications of this report on your business, product, or investment strategies, contact Techsponential at avi@techsponential.com.