Power Automate Desktop vs Cloud Flows - When to Use Each

April 15, 2026•11 min read•Michael Ridland

One of the most common points of confusion we see with Australian businesses adopting Power Automate is understanding the difference between Desktop flows and Cloud flows. They share a name, but they solve fundamentally different problems. Choosing the wrong one wastes time and money. Choosing the right one - or the right combination - is where the real value sits.

Here's how we explain it to our clients.

The Core Difference

Cloud flows automate processes that happen in cloud applications. They connect cloud services to each other via APIs. Think: when an email arrives in Outlook, extract the attachment, save it to SharePoint, send a Teams notification, and create a task in Planner. Everything happens in the cloud, no desktop involved.

Desktop flows automate processes that happen on a Windows desktop. They interact with applications the same way a human would - clicking buttons, typing text, reading screen elements. Think: open a legacy accounting application, log in, navigate to the invoices screen, enter data from a spreadsheet, click submit. The automation physically controls a computer.

Aspect	Cloud Flows	Desktop Flows
What they automate	Cloud services and APIs	Desktop applications and legacy software
How they work	API calls between services	Screen recording, UI automation (RPA)
Where they run	Microsoft's cloud infrastructure	On a Windows machine (physical or virtual)
Trigger types	Events in cloud services, schedules, HTTP requests	Called from cloud flows, manual, schedule
Licensing	Included in M365 (basic) or Premium	Requires Premium or Process license
Reliability	High - API-based, doesn't depend on UI	Moderate - can break if UI changes
Speed	Fast - milliseconds between steps	Slower - simulates human interaction
Maintenance	Low - APIs are stable	Higher - UI changes require updates

When to Use Cloud Flows

Cloud flows should be your default choice. They're more reliable, faster, easier to maintain, and cheaper to license. Use cloud flows when:

Your process involves cloud applications with connectors

Power Automate has 1,000+ connectors to cloud services. If the applications in your workflow have connectors, use cloud flows. Common examples for Australian businesses:

Microsoft 365 workflows: Outlook, SharePoint, Teams, OneDrive, Planner, Forms
CRM processes: Dynamics 365, Salesforce, HubSpot
Accounting integration: Xero, QuickBooks, MYOB (via API)
Communication: Twilio (SMS), SendGrid (email), Slack
Project management: Jira, Asana, Monday.com

Your process is triggered by events in cloud services

Cloud flows excel at event-driven automation:

When a new email arrives, do something
When a SharePoint item is created or modified, do something
When a Forms response is submitted, do something
When a Dynamics 365 record changes, do something
On a schedule (daily, weekly, monthly)

You need the automation to run unattended in the cloud

Cloud flows run on Microsoft's infrastructure. They don't need a computer to be switched on, a user to be logged in, or any physical resource. They just run. This makes them more reliable and easier to manage than desktop flows.

Examples of good cloud flow use cases

Approval workflows. Someone submits a request via Forms or SharePoint, the flow routes it for approval, sends notifications, and updates the status. All cloud-based, all via APIs.

Data synchronisation. When a record is created in Dynamics 365, create a corresponding entry in Xero. When a SharePoint list is updated, sync changes to a SQL database.

Email processing. Monitor a shared mailbox, extract attachments, process them with AI Builder, and route based on content.

Notifications and alerts. When a KPI exceeds a threshold in your data source, send a Teams message to the relevant manager.

When to Use Desktop Flows

Desktop flows are for situations where cloud flows can't reach. The trigger is usually the same: the application you need to automate doesn't have an API or a Power Automate connector. Use desktop flows when:

You need to automate legacy Windows applications

This is the primary use case. Many Australian businesses still run critical processes through legacy software that was built before APIs were standard. We've seen:

Old accounting packages with no API (desktop-only software from the 2000s)
Custom-built internal tools running on Windows Forms or older frameworks
Government compliance portals that only work through a browser with specific UI interactions
Legacy ERP modules that haven't been updated in years
Mainframe terminal emulators

If the only way to interact with the software is through the screen, desktop flows are your option.

You need to automate tasks in Citrix or Remote Desktop environments

Some applications are only accessible through Citrix or Remote Desktop. Desktop flows can automate within these virtual environments, though it requires careful configuration and is more fragile than direct application automation.

You need to work with local files in specific ways

While cloud flows can work with OneDrive and SharePoint files, some processes require working with local files on a machine - reading from a local network drive, processing files with a desktop application, or interacting with hardware-connected devices.

You need to automate web applications without APIs

Some web applications don't have APIs but need to be automated. Desktop flows can control a web browser, filling in forms, clicking buttons, and extracting data from web pages. This is essentially web scraping with automation built on top.

Examples of good desktop flow use cases

Legacy system data entry. Extract data from a SharePoint list or Excel file, then enter it into a legacy application that only accepts keyboard and mouse input.

Report generation from legacy software. Open a legacy application, navigate to the reports section, generate a report with specific parameters, save or export the result.

Government portal submissions. Some Australian government portals (ATO, state revenue offices, regulatory bodies) require manual interaction through their web interfaces. Desktop flows can automate these submissions.

File format conversions. Open a file in a desktop application, save it in a different format. Common when legacy systems require specific file formats that cloud tools can't produce.

Combining Desktop and Cloud Flows

The real power comes from combining both. In our experience, this is the most common pattern for Australian businesses with a mix of modern and legacy systems.

The typical pattern

Cloud flow handles the trigger and orchestration. An email arrives, a form is submitted, or a schedule fires.
Cloud flow does everything it can in the cloud. Extract data, validate, route for approval - all via APIs.
Cloud flow calls a desktop flow for the legacy step. When the process needs to interact with a legacy application, the cloud flow triggers a desktop flow.
Desktop flow completes the legacy interaction. Enters data, generates a report, or whatever the legacy system requires.
Desktop flow returns results to the cloud flow. The cloud flow continues with notifications, logging, or next steps.

Real-world example - Invoice processing with a legacy accounting system

One of our Melbourne clients processes invoices that need to be entered into a legacy accounting system with no API. Here's how we built it:

Cloud flow monitors the invoices mailbox for new emails with attachments
Cloud flow extracts the invoice PDF and processes it with AI Builder
Cloud flow validates the extracted data and routes for approval via Teams
Cloud flow calls a desktop flow after approval
Desktop flow opens the legacy accounting application, logs in, navigates to the invoice entry screen, enters all the extracted data, and submits
Desktop flow captures the confirmation number and returns it to the cloud flow
Cloud flow logs the result, updates the SharePoint tracking list, and sends a confirmation notification

The cloud flow handles 90% of the work. The desktop flow handles the one step that requires interacting with a legacy application. This hybrid approach is far more maintainable than building the entire process as a desktop flow.

Attended vs Unattended Desktop Flows

An important distinction within desktop flows:

Attended flows

Run on a machine where a user is logged in
The user can see the automation happening on their screen
The user triggers the flow manually or it runs alongside their work
Good for: processes where the user needs to provide input partway through, or where the automation assists the user rather than replacing them
Licensing: Included with Power Automate Premium per-user license

Unattended flows

Run on a machine without a user being logged in
The automation runs in the background, typically on a dedicated virtual machine
Triggered by cloud flows on a schedule or by events
Good for: batch processing overnight, high-volume data entry, processes that run outside business hours
Licensing: Requires Power Automate Process or Hosted Process license ($225-310 AUD/month per flow)

For most Australian businesses, unattended flows on a dedicated virtual machine is the recommended approach for production desktop automation. It doesn't interrupt anyone's work, runs reliably on a schedule, and can be monitored centrally.

A practical tip about virtual machines for Australian businesses: If you're running unattended desktop flows, you need a Windows machine that's always available. Options include:

Azure Virtual Machine: $80-200 AUD/month depending on spec. Good if you're already on Azure.
Power Automate Hosted Process: Microsoft manages the machine for you at ~$280-310 AUD/month. Simpler but more expensive.
On-premises server: If you have existing infrastructure, you can use a dedicated machine. No additional hosting cost, but you manage it.

Decision Framework

Here's the framework we use with our clients:

Step 1: Does the application have a Power Automate connector?

Yes - Use a cloud flow. Stop here.
No - Go to Step 2.

Step 2: Does the application have an API?

Yes - Use a cloud flow with a custom connector or HTTP action. Stop here.
No - Go to Step 3.

Step 3: Can the task be done through a web browser?

Yes (and the website has no API) - Desktop flow is likely needed, but consider if a cloud-based web automation tool might work first.
No - Go to Step 4.

Step 4: Is it a Windows desktop application?

Yes - Desktop flow is your option.
No - You may need a different approach entirely.

Step 5: Does it need to run without a user present?

Yes - Unattended desktop flow.
No - Attended desktop flow.

Common Mistakes We See

Building everything as desktop flows. Some businesses or consultants default to desktop flows because they're familiar with screen recording. But desktop flows are harder to maintain, slower, and less reliable than cloud flows. Always use cloud flows where possible and reserve desktop flows for genuine legacy scenarios.

Not planning for UI changes. Desktop flows break when applications update their interface. A button moves, a field name changes, a menu is reorganised - and the flow fails. Build desktop flows with element identification that's resilient to minor UI changes, and budget for periodic maintenance.

Ignoring the licensing implications. Desktop flows require Premium or Process licensing. We've seen businesses build desktop flows only to discover they need to significantly increase their licensing spend. Understand the licensing before you design the solution.

Running attended flows for unattended work. If a process needs to run without human oversight, use unattended flows on a dedicated machine. Running attended flows on an employee's workstation means the automation competes with their regular work and fails when they log out.

Not combining them effectively. The biggest missed opportunity is not using cloud and desktop flows together. The hybrid approach - cloud for orchestration, desktop for legacy steps only - gives you the best of both.

Licensing Considerations for Australian Businesses

Understanding the licensing for each type helps with budgeting:

Scenario	What You Need	Approximate AUD/Month
Cloud flows only (standard connectors)	Microsoft 365 license (existing)	$0 additional
Cloud flows with premium connectors	Power Automate Premium per user	$22-25/user
Attended desktop flows	Power Automate Premium per user	$22-25/user
Unattended desktop flows	Power Automate Process per flow	$225-250/flow
Unattended desktop flows (hosted machine)	Power Automate Hosted Process	$280-310/flow

For most Australian mid-sized businesses, a combination of a few Premium user licenses and one or two Process licenses covers a practical automation program. Budget $5,000-$15,000/year for licensing, depending on scope.

Getting Started

If you're trying to work out the right mix of cloud and desktop flows for your business, reach out to our team. We'll assess your applications, processes, and existing infrastructure and recommend the approach that delivers the best results for your budget.

Learn more about our Power Automate consulting services, explore our automation offerings, or read about how we help Australian businesses with AI and automation strategy.