Thank you for reaching out on Microsoft Q&A. After reviewing your case, we identified that the issue is related to the Windows Server Core image used during the VM deployment.
Issue explanation:
This behavior occurred because the virtual machine was deployed using the Windows Server Datacenter – Azure Edition (Core) image. Server Core installations do not include the Windows Desktop Experience (GUI) and are intended to be managed through command-line tools, PowerShell, or remote management utilities, rather than a full graphical RDP session.
As a result, when attempting to connect via RDP, the connection fails and the Boot Diagnostics display appears stuck at LogonUI.exe / Ctrl+Alt+Del. This is expected behavior for Server Core and is not related to a password mismatch or any VM-level issue.
Microsoft provides two Windows Server installation options in Azure VM images:
- Server Core
- No graphical user interface (GUI) or Windows Explorer
- Managed using CMD, PowerShell, or remote administration tools
- Server with Desktop Experience
- Includes the full Windows graphical desktop
- Supports standard GUI-based RDP sessions
In this case, the selected image was Server Core, which does not support a full desktop login via RDP.
To resolve the issue, the VM must be redeployed using a Windows Server image that includes the Desktop Experience.
References:
What is the Server Core installation option in Windows Server?
Server Core vs Server with Desktop Experience install options
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