• Cloud PCs will take longer to wake up, but that'll get you 20% off your bill
• Microsoft says there's no performance disruption when they're up and running
• With OEMs rising hardware prices, Microsoft hopes more SMBs will switch to Cloud PCs

Microsoft will be cutting prices for its Windows 365 Cloud PC services by a staggering 20% despite ongoing memory shortages, with the change coming into effect from May 1 2026.

The company hopes that, by making cloud desktops more attractive, especially for SMBs, it would be able to increase its customer base and recuperate costs that way.

It's also an interesting time for companies to get into cloud PCs, with physical device costs continuing to rise.

Microsoft is making Cloud PCs cheaper amid rising prices

"DRAM and storage bill of materials costs increased $122-$237 from Q1 2025 to Q2 2026," Omdia noted, with those costs being pushed onto consumers and commercial customers with device price hikes.

The company is also setting out a two-stage plan to reduce resource wastage, which may impact performance but will have a welcome improvement on the bill. Cloud PCs will only stay active fro one hour after sign-out.

Once they begin to hibernate, they can be slightly slower to reconnect than before. Introduced to cut costs and reduce wastage, Microsoft says that performance remains the same once reconnected.

In other words, the revision "helps deliver a lower price point while preserving the full Windows 365 Business value and capabilities partners and customers expect."

New users, and existing users renewing their subscriptions, will see the changes.

The "20% list price decrease for Windows 365 Business, along with a new on demand start experience," makes "Cloud PCs more accessible for small and medium business customers," the company added in an update.

More broadly, it signals a change in behavior with Microsoft targeting lower performance in the name of cost efficiency, much as a number of OEMs (including Raspberry Pi) have done by introducing mid-spec tiers of devices below high-end flagships.

Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button!

And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!