The VM has to be added to your O365 account domain only then the user accounts present within the O365 domain gets validated. Only after you add your laptop to @microsoft.com domain, your MS username & password gets validated. If you are not added to MS domain (example when you first install the OS to your laptop & boot, it is still not added to domain) at the time, MS account wont' get validated for login. You need to use local account only.
Logging into VM with work account
I'm just trying to get my feet wet with Azure VMs. I've set up a Windows Desktop VM and can log in with a local account. I added my O365 work account as an administrator in the VM and within access control in the VM dashboard. When I try to log in, I get a "wrong user name or password" error at the Windows login (after RDPing to the site). I'm at a loss how to troubleshoot this and hoping someone is familiar with this problem. Thanks!
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Sumarigo-MSFT 47,366 Reputation points Microsoft Employee
2019-12-09T04:26:17.4+00:00 -
Emerson Caro 86 Reputation points
2019-12-19T04:01:49.467+00:00 By default, you're only allowed to use the credentials you inputted upon the creation of the VM. Unless if you connect it to a Domain Controller/Azure AD Domain Services or if the machine is a Domain Controller.
You can also use your Office 365 account if is connected to your Azure Active Directory tenant.