Azure Local is Microsoft’s virtualized infrastructure platform that extends the power of Azure across virtually any location, whether in on-premises data centers, at the edge, or in fully sovereign environments. Azure Local delivers ultra-low latency for real-time applications, strict data sovereignty and regulatory compliance, and the ability to operate where a public cloud isn’t economically or regulatorily feasible. It supports fully connected, intermittently connected, and disconnected and air-gapped deployments. This allows organizations to run modern cloud-native and AI workloads alongside traditional and legacy applications within the same Azure environment while keeping data, identity, policy, and operations under their own governance.
Evolution from Storage Spaces and Hyper-V to Azure Local
Azure Local didn’t just come out of nowhere. Its development spans well over a decade starting with the introduction of Storage Spaces (converged storage) in Windows Server 2012 R2, which enabled organizations to virtualize storage by pooling industry-standard disks on JBODs into storage pools and creating resilient virtual disks.
Windows Server 2016 Datacenter Edition advanced it with Storage Spaces Direct, which enabled a highly scalable hyper-converged infrastructure (HCI) that integrated compute, storage, and networking on the same cluster, scaling from two to sixteen nodes. It also added integration with Hyper-V, containers through Kubernetes integration, software-defined networking (SDN), and access to a handful of Azure services.
In late 2019, Microsoft introduced the early phase of Azure Stack HCI, which referred to validated hardware running Windows Server with Hyper‑V, Storage Spaces Direct, and SDN.
Released in late 2020, Azure Stack HCI 20H2 shifted from being a feature of Windows Server to a dedicated, standalone operating system focused on hybrid cloud computing with integrated Azure services. Clusters would be managed by Azure Arc for single-pane-of-glass management for mixed ecosystems and multi-clouds.
In late 2024, Microsoft repositioned Azure Stack HCI as Azure Local, aligning it more directly with the broader Azure ecosystem and its “one stack” distributed infrastructure vision. This wasn’t just a name change. Azure Arc capabilities became more deeply embedded, shifting the platform from being cloud-connected to Arc-enabled at its core, using the Azure portal for primary single-pane-of-glass management.
One of the big game changers was the introduction of Azure-native services being built for on-premises use with Azure Local. This benefits companies and organizations with data locality, governance, and latency requirements.
- Azure Virtual Desktop (AVD) for Azure Local allows you to run Microsoft’s cloud-based VDI on-premises, using Azure Local to host remote user sessions rather than using public Azure cloud.
- Azure Kubernetes Service (AKS) enabled by Azure Arc on Azure Local is built in and included with Azure Local as a core component. Cloud‑native Kubernetes apps can be managed from Azure while running on‑premises in Azure Local clusters, giving you a single, streamlined control plane for hybrid operations.
With the recent introduction of features like disconnected operations and SAN support, Microsoft has positioned Azure Local as more than just a complete hybrid cloud solution; it is now a key part of its new Sovereign Private Cloud portfolio.
Top Features of Azure Local
Azure Local represents Microsoft’s vision for hybrid and distributed computing and sovereign private cloud, delivering robust infrastructure capabilities.
- Complete Hybrid Cloud Platform: Azure Local is a hybrid cloud solution that delivers a complete on-premises virtualization platform, seamlessly extending Azure to customer-owned infrastructure. Organizations can run AVD for Azure Local, containers via AKS on Azure Local, Microsoft 365 Local, and Foundry Local on-premises, along with Azure services like Azure Monitor, Azure Backup, Azure Site Recovery, Microsoft Defender for Cloud, Azure Policy, Azure Migrate, and more. All of these features are managed in the Azure portal for single-pane-of-glass simplicity.
- Unified Management and Control Plane: Manage, monitor, update, secure, and govern your entire environment through the Azure portal and Azure Arc. Azure Arc serves as the single control plane across on-premises, edge, sovereign, and multi-cloud environments.
- Simplified Updates: With Azure Update Manager and DataON Solution Builder Extension (SBE), you can update software and hardware updates across your entire Azure Local infrastructure with just a few clicks. This means significantly reduced administrative overhead to manage and maintain clusters.
- Extreme Scalability: Deploy from single-node edge setups all the way to multi-rack sovereign environments without requiring a full architectural redesign.
- Switchless Deployments: Switchless deployments enable organizations to cut complexity, cost, and latency by eliminating the need for a switch in two- to four-node clusters.
- Disaggregated Deployments (New): Moves beyond traditional hyper-converged infrastructure limitations. Supports disaggregated architectures using external Fibre Channel SAN storage, enabling independent scaling of compute and storage for large enterprise and sovereign deployments. This also lets organizations reuse select existing storage arrays.
- Full Air-Gapped and Sovereign Support (New): Designed for disconnected and fully air-gapped operations with complete data residency, customer-controlled hardware, and local control capabilities. Works seamlessly in connected, disconnected, and air-gapped networks while maintaining consistent Azure management and security experiences.
- Simplified Local Identity (New): Uses Azure Key Vault for local identity services, removing the dependency on Active Directory for branch office and edge scenarios.
- Enhanced AI Workloads: Delivers robust AI and GPU‑accelerated performance, even in sovereign or fully disconnected environments.
Why Organizations Should Use Azure Local
There are many reasons for organizations to migrate and deploy Azure Local.
- Hybrid Cloud Strategy: Many organizations want a complete ‘one stack’ solution for on-premises, cloud, multi-cloud, legacy and edge environments in mixed ecosystems. The Azure stack delivers virtualization, virtual desktop infrastructure (VDI), Kubernetes, Azure services, and single pane of glass management through the Azure portal.
- Consolidating Existing Infrastructure: Some organizations are looking for a software-defined storage solution that can easily and affordably scale up and out, in addition to wanting better performance. Azure Local support for disaggregated architectures gives them the option to use external Fibre Channel SAN storage, or in some cases, continue to use existing storage arrays.
- VMware vSphere Exodus: Customers are overwhelmingly frustrated with changes at VMware after being acquired by Broadcom. Massive price hikes, forced bundling, loss of perpetual licenses, reduced support flexibility, and aggressive contract enforcement: these changes have pushed many organizations to consider abandoning VMware entirely and look at alternatives such as Azure Local.
- Omnissa Horizon and Citrix DaaS Exodus: Users of these VDI offerings are also looking for new solutions after VMware sold Horizon to Omnissa and Citrix was sold to a private equity firm. They are facing the same price hikes seen with VMware vSphere, which is driving them to look for solutions that reduce high per-user licensing costs. AVD for Azure Local provides them with a unified management experience and lets them take advantage of exclusive features like Windows 11 Enterprise multi-session.
- Data Locality, Sovereignty and Regulatory Compliance: Many organizations have strict data locality, sovereignty, regulatory, or national security requirements (especially government, defense, finance, and healthcare verticals) and are limited or prohibited from using public clouds. Azure Local offers disconnected, intermittent, and fully air-gapped operations to meet these needs and complement Microsoft 365 Local and Foundry Local deployments.
- Low-Latency Requirements: Some organizations require low-latency or high-performance processing such as manufacturers, retail, and telecommunications. Running Azure Local on-premises minimizes latency by processing data directly at the source rather than sending it to a public cloud region. This removes Internet bottlenecks, enabling near real-time performance for critical applications.
How Can I Buy Azure Local
Azure Local solutions are available from select Microsoft partners such as DataON. You can see the full catalog of validated solutions in the Microsoft Azure Local Catalog. There are two tiers of Azure Local solutions.
- Microsoft recommends choosing Premier Solutions for Azure Local. They’re turnkey solutions built through deep collaboration with Microsoft partners to deliver the highest level of integration and validation. This ensures higher reliability, minimal downtime, coordinated full stack updates, support services, and streamlined end-to-end deployment workflows. Microsoft recently released new features that are designed specifically for Premier Solutions: disconnected operations, Microsoft 365 Local, and support for Fibre Channel SAN storage.
- Integrated Systems for Azure Local are single-purposed systems with pre-installed Azure Local software. They feature optimized hardware with regular testing between the hardware partner and Microsoft for ongoing reliability, with validated full-stack updates and native hardware management tools.
Learn more about Azure Local solution tiers
DataON Premier Solutions+ for Azure Local
DataON Premier Solutions+ for Azure Local is DataON’s exclusive offering that goes beyond Microsoft’s Premier Solution tier requirements for a premium Azure Local experience. It’s a more complete experience with:
- DataON hardware with Azure Local
- Deployment, migration, and training services included
- DataON’s renowned white glove service & support
DataON Premier Solutions+ provide the fastest time-to-value for you. Our goal is to not only get you up and running quickly but also make sure you’re confident in managing Azure Local.
Learn more about DataON Premier Solutions+ for Azure Local
Chat with us if you’d like to learn more about Azure Local and DataON solutions for Azure Local.