Microsoft 365 Alert – Service Degradation – Windows 365 – Users may experience intermittent failures and issues signing-in when connecting to Cloud PC sessions – RESOLVED

14/01/2026 09:08:00 AM

NHSmail Reference: INC46723535

Microsoft Reference: WP1217671

Issue Status: RESOLVED

Issue Description: Users may experience intermittent failures and issues signing-in when connecting to Microsoft 365 Cloud PC sessions.

More info: If you were impacted, please use one of the following connection options as a workaround:
Use the Remote Desktop client for Windows to connect to Azure Virtual Desktop here (What’s new in the Remote Desktop client for Windows – Remote Desktop client | Microsoft Learn)
Connect using the Windows App Web Client at windows.cloud.microsoft

To resolve this issue fully, users may consider the below Known Issue Rollback (KIR) instructions for resolving authentication errors and connection failures when connecting to AVD (Azure Virtual Desktop) & W365:

Please note that it might take up to 24 hours (starting from January 14, 2026, at 03:00 11:00 AM UTC) for the resolution to propagate automatically to consumer devices and business devices that are not managed by IT departments. Restarting your Windows device might help apply the resolution to your device more quickly.

For enterprise-managed devices managed by IT departments that have installed the affected update and encountered this issue, IT administrators can resolve it by installing and configuring the Group policy listed below. The special Group Policy can be found in Computer Configuration > Administrative Templates > .

For information on deploying and configuring this special Group Policy, please see How to use Group Policy to deploy a Known Issue Rollback.

Group Policy downloads with Group Policy name:

Download for Windows Server 2022: Windows Server 2022 KB5073457 20260114_10101 Known Issue Rollback
Download for Windows Server 2025: Windows Server 2025 KB507339 20260114_08001 Known Issue Rollback
Download for Windows 11 25H2 and Windows 11 24H2: Windows 11 25H2 and Windows 11 24H2 KB5074109 20260114_09501 Known Issue Rollback
Important: You will need to install and configure the Group Policy for your version of Windows to resolve this issue. You will also need to restart your device(s) to apply the group policy setting.

Final Update: 14/01/2026 15:19:00 PM– Microsoft have deployed the fix to the affected environments and additional steps to fully resolve impact may be required by affected users. They have provided additional information in the More info section of this communication to provide guidance on how to fully resolve impact..

Scope of impact: Any user may be affected be affected and experience intermittent failures and issues signing-in when connecting to Cloud PC sessions.

Root cause: A recent Windows 365 update intended to further improve security functionality is causing failed connection attempts to Cloud PC sessions.

Next steps: Microsoft are reviewing their update procedures to better identify similar issues during our development and testing cycles.