Microsoft 365, Teams and OneDrive on AVD

Microsoft 365 Apps on AVD — shared computer activation

Deploying M365 Apps for shared activation

Install Microsoft 365 Apps using the Office Deployment Tool (ODT) with a configuration XML:

Key settings in the configuration:

Setting	Value	Why
SharedComputerLicensing	1	Enables shared computer activation (mandatory for multi-session)
Channel	MonthlyEnterprise or Current	Update channel — MonthlyEnterprise is recommended for AVD
ExcludeApp	Teams, OneDrive, Access (optional)	Exclude apps that are deployed separately or not needed
Display Level	None	Silent installation for image builds

Install M365 Apps in the golden image, not per session host. When you update the image, all hosts get the new version.

💡 Exam tip: SharedComputerLicensing is mandatory

If the exam asks about deploying Microsoft 365 Apps to multi-session hosts and SharedComputerLicensing is not mentioned in an answer, that answer is wrong. Without shared activation, only one user can activate Office on the machine — all other users get a “Product Activation Failed” error.

Remember: single-session (personal) host pools do NOT need shared computer activation — the machine is dedicated to one user. Shared activation is only for multi-session / pooled scenarios.

OneDrive on multi-session AVD

OneDrive needs special handling on multi-session hosts because multiple users share the same machine.

Per-machine installation (ALLUSERS mode)

OneDrive must be installed in per-machine mode (ALLUSERS=1) on multi-session hosts:

• Standard OneDrive installs per-user in %localappdata% — this does not work well on shared machines
• Per-machine installation puts OneDrive binaries in Program Files and runs for all users
• Updates are handled centrally (no per-user update processes)

Key OneDrive features for AVD

Feature	What It Does	Why It Matters for AVD
Known Folder Move (KFM)	Syncs Desktop, Documents, Pictures to OneDrive	Users’ files are backed up and available across sessions
Files On-Demand	Files appear in Explorer but download only when opened	Saves profile size — files are not stored in the FSLogix VHD(X)
Silent sign-in	Automatically signs users into OneDrive using their Windows credentials	No manual sign-in needed each session
Per-machine install	One installation serves all users	Mandatory for multi-session — avoids per-user installs

Files On-Demand and FSLogix

Files On-Demand is critical for AVD profile sizing:

• Without Files On-Demand: all synced files are downloaded to the profile VHD(X) — a user with 50 GB of OneDrive data needs a 50 GB+ profile
• With Files On-Demand: files show as placeholders and download only when opened — profile stays small
• Configure via Group Policy or Intune: FilesOnDemandEnabled = 1

🌐 Priya’s OneDrive rollout: “Our first attempt without Files On-Demand was a disaster — profiles ballooned to 40 GB because everyone’s OneDrive content was syncing. We enabled Files On-Demand and average profile size dropped to 8 GB. Ben’s creative team has 200 GB of assets in OneDrive, but only the files they actually open get downloaded to their session.”

Microsoft Teams on AVD — media optimisation

Teams on AVD requires special attention because audio and video processing is resource-intensive.

The problem without media optimisation

Without optimisation, Teams runs entirely on the session host:

1. User’s microphone audio is sent via RDP to the session host
2. Session host processes the audio and sends it to the Teams service
3. Incoming audio from the Teams service is processed on the session host
4. Processed audio is sent back via RDP to the user’s speakers
5. Same for video — webcam capture, encoding, decoding all on the session host

This creates: high CPU usage on session hosts, poor audio/video quality, echo, delay, and a terrible user experience — especially with multiple users on the same VM.

The solution: WebRTC Redirector (media optimisation)

Teams media optimisation offloads audio/video processing to the client device:

1. The WebRTC Redirector Service runs on the session host
2. When a Teams call starts, audio/video streams are redirected to the client
3. The client device captures microphone, processes audio, encodes/decodes video
4. Media streams flow directly between the client and the Teams service
5. Session host CPU is freed — it only handles the Teams chat and UI

Component	What It Does	Where It Runs
New Teams client	Teams app with built-in AVD optimisation	Session host
WebRTC Redirector	Intercepts media and redirects to client	Session host (service)
Windows App / native client	Handles media processing locally	Client device

Requirements for Teams media optimisation

• New Teams client (the latest Teams built on Edge WebView2)
• WebRTC Redirector Service installed on session hosts
• Windows App or supported native client on the user’s device
• Web client does NOT support media optimisation

🌐 Priya’s Teams transformation: “Before media optimisation, every Teams call consumed 40% CPU per user on the session host. With 10 users in calls, the VM was maxed out. After enabling the WebRTC Redirector, Teams media runs on the user’s laptop. Session host CPU dropped to 5% per user during calls. Yuki, our compliance officer, was thrilled — call quality finally met our SLA.”

ℹ️ Deep dive: New Teams vs classic Teams on AVD

The new Microsoft Teams client (built on Edge WebView2) has significantly better AVD integration than classic Teams:

• Better resource usage (up to 50% less memory)
• Built-in optimisation support without separate MSI installers
• Faster startup times
• Improved meeting experiences (gallery view, Together mode)

Classic Teams on AVD required a separate “Teams Machine-Wide Installer” MSI with a specific registry key (IsWVDEnvironment=1). The new Teams simplifies this — it detects the AVD environment automatically.

For the exam, know that the new Teams is the recommended version. Classic Teams on AVD is being deprecated.

Browser considerations

Microsoft Edge — the recommended browser

• Pre-installed on Windows 11 session host images
• Supports multimedia redirection (MMR) for optimised video playback
• Enterprise management via Intune or Group Policy (ADMX templates)
• Extensions can be centrally managed and enforced

Browser multimedia redirection

MMR works with Edge and Chrome to offload browser-based video to the client:

Aspect	With MMR	Without MMR
Video decoding	Client device	Session host
CPU usage	Low on session host	High on session host
Video quality	Native playback quality	Re-encoded through RDP
Supported sites	YouTube, Vimeo, and compatible streaming	All sites (but poorly)

Question

What is shared computer activation, and when is it required?

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Answer

Shared computer activation is a licensing mode where each user activates their own Microsoft 365 licence on a shared machine. It is required when deploying Microsoft 365 Apps on multi-session AVD session hosts (pooled host pools). Personal host pools do not need it.

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Question

Why must OneDrive be installed in ALLUSERS mode on multi-session AVD hosts?

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Answer

Standard OneDrive installs per-user in the local AppData folder, which does not work well on shared machines. ALLUSERS (per-machine) mode installs OneDrive in Program Files so it serves all users with centralised updates.

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Question

How does Files On-Demand help with FSLogix profile sizing?

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Answer

Files On-Demand shows OneDrive files as placeholders that download only when opened. Without it, all synced files download into the user's FSLogix profile VHD(X), potentially causing massive profile sizes. With it, profiles stay small because only accessed files consume disk space.

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Question

What does the WebRTC Redirector Service do for Teams on AVD?

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Answer

It intercepts Teams audio/video streams on the session host and redirects them to the client device for local processing. This offloads CPU-intensive media encoding/decoding from the session host, dramatically improving call quality and reducing server load.

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Knowledge Check

Raj is deploying Microsoft 365 Apps to TerraStack's pooled multi-session host pool. He installs Office in the golden image but forgets to enable SharedComputerLicensing. What happens when the second user tries to open Word?

AWord opens normally — each user's licence is handled by Entra IDBWord shows a 'Product Activation Failed' error for the second userCWord opens in read-only mode for all users after the firstDThe installation fails during image build without shared activation

Check Answer

Knowledge Check

Priya notices that OneDrive is consuming 30 GB in user profiles. Users have large OneDrive libraries with video assets. What should Priya enable to reduce profile size?

AOneDrive Known Folder Move to redirect folders to OneDriveBOneDrive Files On-Demand so files download only when accessedCOneDrive selective sync to limit which folders syncDIncrease the FSLogix profile container size to 100 GB

Check Answer

Knowledge Check

Mia's clinicians report terrible Teams call quality — echo, delay, and choppy video. They connect through the AVD web client. What should Mia change?

AInstall the WebRTC Redirector Service on session hosts — it fixes quality for all clientsBSwitch clinicians from the web client to the native Windows App for Teams media optimisationCUpgrade session host VMs to GPU-enabled NV-series for better video processingDEnable RDP Shortpath to reduce latency for Teams traffic

Check Answer

🎬 Video coming soon

Microsoft 365, Teams and OneDrive on AVD

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Next up: App Attach: Dynamic Application Delivery — deliver apps separately from the OS image using VHD, CIM, and MSIX packages that mount at sign-in.