Azure Local
Azure Local, formerly Azure Stack HCI, is Microsoft's infrastructure software for customer-owned servers that runs VMs, AKS clusters, Azure Virtual Desktop and selected Azure services on-premises, managed from Azure through Azure Arc. It can also run disconnected and is billed per physical core.1
Also known as Azure Stack HCI (former name), Azure Local instance (formerly Azure Stack HCI cluster)
- Intended for
- Infrastructure and datacenter teams, Edge and branch IT teams (retail, manufacturing, energy), Organizations with sovereignty or disconnected-site requirements, VMware and Hyper-V customers planning a migration
- Runs on
- Customer datacenters, Branch and edge sites, Sovereign private clouds, Disconnected sites (with approved disconnected operations), Azure Government (US Gov Virginia; US Gov Arizona in preview)
At a glance
- What is it?
- Azure Local is Microsoft's distributed infrastructure solution that brings Azure capabilities to hardware the customer owns, in datacenters, branch sites or sovereign locations. It is sold through a catalog of validated hardware from Microsoft partners, uses Azure Arc as its control plane, and is managed with the Azure portal, Azure CLI and ARM templates. The product was previously called Azure Stack HCI: Microsoft's release notes record the Azure Stack HCI OEM license being renamed to the OEM license for Azure Local, and the Azure Stack HCI name still appears in the OS image and in resource and cmdlet names.12
- What does it do?
- Azure Local hosts Azure Local VMs (Windows and Linux) with GPU acceleration, Azure Kubernetes Service clusters (AKS on Azure Local), Azure Virtual Desktop session hosts and Azure IoT Operations, side by side. You can onboard Azure Policy, Microsoft Defender for Cloud, Azure Monitor and Copilot for Azure to manage and secure the infrastructure. Deployment types include hyperconverged clusters with Storage Spaces Direct, external SAN storage (Fibre Channel and iSCSI), disaggregated deployments that scale storage and compute separately, rack aware clusters and disconnected operations with a local control plane. Azure Migrate moves VMware and Hyper-V VMs onto it.123
- Who needs it?
- Organizations whose compute must stay on-premises: sites that must keep running through network outages (factories, warehouses, stadiums, transit), control systems with tight latency needs, local AI inferencing at stores or pipelines, and regulated sectors such as defense, intelligence and energy that must keep data under local control. It also fits teams that want to replace an existing virtualization platform while managing it from Azure.1
- What does it need?4
- An Azure subscription (pay-as-you-go, EA or CSP) and permissions to register machines with Azure Arc
- Hardware from the Azure Local catalog, with TPM 2.0, Secure Boot and at least 32 GB ECC RAM per machine
- Registration in a supported Azure region (for example East US, West Europe, Australia East, Southeast Asia, India Central, Canada Central, Japan East, South Central US, or US Gov Virginia)
- Outbound connectivity to required Azure endpoints (minimum 10 Mbit) unless you qualify for disconnected operations
- Active Directory or local identity with Azure Key Vault for deployment
- What it is not
- Azure Local is not Azure in a box: only select Azure services run on it, and it runs on validated hardware you buy and operate, not on Microsoft-owned equipment. Microsoft support may only be provided for hardware listed in the Azure Local catalog. It is not a public cloud region and it is not Azure Arc itself (Arc is the management plane it uses). Disconnected operations are not a standard purchase: they require an eligible agreement, a support plan, a business need to run disconnected, Premier Solutions hardware and a dedicated management cluster, and Microsoft approves access.45
Availability and licensing. Generally available, sold through validated partner hardware; monthly releases (2610 in October 2026). Checked 26 October 2026: billed per physical core plus Azure services used, with a 60-day free trial after registration. The pricing page lists host fee tiers L1 to L3 (L3 for disconnected operations, by quote), shows USD 23.3 per physical core per month for the optional Windows Server guest subscription, includes AKS (2402 and later) at no extra charge, and lets eligible Windows Server Datacenter customers with Software Assurance waive the L1 fee via Azure Hybrid Benefit.6
The problem it solves
Some workloads cannot move to a public cloud region: they need low latency next to machines, must survive network outages, or must keep data inside a site or a country. Running them on traditional on-premises virtualization means a separate set of tools, patching processes and security controls from the cloud estate.
Azure Local runs those workloads on local hardware while giving operators the same Azure portal, policy, monitoring and security services they use in Azure, and, where needed, a fully local control plane.
How it works
Azure Local combines validated hardware, an operating system based on Windows Server technology, and cloud management:
- Hardware: Premier Solutions, Integrated Systems or Validated Nodes from the Azure Local catalog, from 1 to 16 machines in a hyperconverged cluster and up to 64 machines in disaggregated SAN deployments. Each machine needs TPM 2.0, Secure Boot and at least 32 GB of ECC memory.
- Operating system and updates: monthly releases (the October 2026 release is 2610, version 12.2610.1004.41) delivered and updated from Azure.
- Control plane: Azure Arc registers each machine in Azure, and workloads are created as Azure resources (Azure Local VMs, AKS clusters, logical networks) from the portal, CLI or templates. With disconnected operations, a virtual appliance on a dedicated management cluster provides a local Azure portal, Azure Resource Manager, RBAC, Key Vault, Container Registry and Azure Policy.
Charges for the host and any Azure services you add go to your Azure subscription.2345
Diagram as a list
Copilot & business apps
- Azure portal, CLI and ARM templatesProvision and manage infrastructure and workloadsConnects to Azure Arc control plane
- Azure Virtual Desktop session hostsLocal desktops and apps brokered by the AVD service in Azure
Data & analytics
- Azure IoT OperationsEdge data services running on AKS on Azure Local
Security, identity & governance
- Azure Policy, Defender for Cloud, Azure MonitorGovernance, threat protection and monitoring for the instanceConnects to Azure Local instance on validated hardware
Cloud & hybrid infrastructure
- Azure Arc control planeRegisters machines and projects workloads as Azure resourcesConnects to Azure Local instance on validated hardware
- Azure Local instance on validated hardwareCustomer-owned machines running the Azure Local OS, storage and networking
- Azure Local VMsWindows and Linux VMs, including GPU-accelerated VMs
- AKS on Azure LocalKubernetes clusters for containerized appsConnects to Azure IoT Operations
- Disconnected operations appliance (optional)Local control plane on a dedicated management cluster for sites without Azure connectivityConnects to Azure Local instance on validated hardware
Capabilities
Azure Arc-managed VMs2
Create and manage Windows and Linux Azure Local VMs from Azure, with Marketplace images, RBAC and GPU passthrough or partitioning.
Why it matters: On-premises VMs follow the same management model as Azure resources.
Limits: Performance depends on the hardware you choose; VM features vary by release.
AKS on Azure Local2
Run Kubernetes clusters managed from Azure next to VMs on the same hardware.
Why it matters: Containers and VMs share one platform at the site.
Limits: Windows Server 2019 node pool support ended in March 2026.
Azure Virtual Desktop session hosts on-premises9
Deploy AVD session hosts on Azure Local while host pools and brokering stay in Azure.
Why it matters: Keeps desktops close to users and data with Windows multi-session.
Limits: Needs a connection to the AVD service in Azure; a host pool cannot mix Azure and Azure Local session hosts.
Flexible storage and scale2
Storage Spaces Direct, external SAN over Fibre Channel or iSCSI, and disaggregated deployments that scale beyond 16 nodes.
Why it matters: Lets customers reuse SAN investments and size storage and compute separately.
Limits: SAN arrays must come from supported vendors.
Resilience across racks2
Rack aware clustering defines local availability zones based on physical racks; it became generally available in release 2601.
Why it matters: Protects workloads against the loss of a rack.
Limits: Rack aware clusters with SAN are in preview as of release 2610.
Disconnected operations5
A local control plane provides an Azure-like portal, ARM, RBAC, Key Vault, Container Registry and Policy without a connection to Azure public cloud.
Why it matters: Supports sovereign, remote or high-security sites.
Limits: Approval-based access, eligible agreement, support plan, Premier Solutions hardware and a dedicated management cluster required; Arc-enabled Kubernetes in this mode is in preview.
Security baseline2
Secure defaults with a security baseline that grows to 429 evaluated settings in release 2610, plus confidential VMs with AMD SEV-SNP now generally available.
Why it matters: Hardened configuration out of the box for regulated workloads.
Limits: Confidential VMs require AMD Genoa platforms.
Practical use cases
Stores need self-checkout and loss-prevention AI that keeps working if the WAN goes down.
- Approach
- Run inference containers on AKS on a small Azure Local cluster in each store, managed centrally from Azure.
- Role of Azure Local
- Azure Local supplies local compute and Arc-based management.
- Data, infrastructure and skills
- Validated hardware per site, AKS skills, a model packaged as containers.
- Type of benefit
- Resilience and low latency
- Caveats
- Each site is hardware to buy and maintain.
- First step
- Pilot one store with a single-node or two-node instance.
A defense or energy operator cannot connect certain sites to the public cloud.
- Approach
- Apply for disconnected operations and run VMs and AKS from a local control plane.
- Role of Azure Local
- Azure Local with disconnected operations provides Azure-style management on-site.
- Data, infrastructure and skills
- Eligible agreement, support plan, Premier Solutions hardware and a management cluster.
- Type of benefit
- Sovereignty and control
- Caveats
- Access requires Microsoft approval and some services in this mode are in preview.
- First step
- Complete the disconnected operations prequalification form with your account team.
Users in a remote region get poor desktop performance from cloud-hosted desktops.
- Approach
- Place Azure Virtual Desktop session hosts on Azure Local near those users.
- Role of Azure Local
- Azure Local hosts the session hosts; AVD in Azure brokers connections.
- Data, infrastructure and skills
- Azure Local 23H2 or later, eligible Windows licenses, AD DS for session host join.
- Type of benefit
- Better user experience
- Caveats
- AVD for Azure Local adds a per-vCPU service fee and still needs Azure connectivity.
- First step
- Create a host pool with a few multi-session hosts on the local instance.
Works with
Requires
- Azure ArcAzure Local uses Azure Arc as its unifying control plane.
Optional integration
- Azure Kubernetes Service (AKS)AKS on Azure Local is part of the platform and included at no extra charge.
- Azure Virtual DesktopAzure Virtual Desktop session hosts can run on Azure Local.
Complementary tools
- Azure Kubernetes Service (AKS)AKS on Azure Local brings the AKS engine to on-premises hardware and is included with Azure Local.
- Azure IoT OperationsAKS on Azure Local is a generally available platform for IoT Operations.
Same family
- Azure ArcAzure Local uses Azure Arc as its unifying control plane; both belong to Microsoft's adaptive cloud approach.
Optional integration for
- Azure Virtual DesktopAVD session hosts can run on-premises on Azure Local.
Relationship labels follow Microsoft's documentation. "Alternative approaches" does not mean one is better: each profile says when it fits.
Getting started
Map workloads and sites
Decide which workloads must stay on-premises and whether each site can stay connected to Azure or needs disconnected operations.
Check: Each site has a connectivity model and a target deployment type (hyperconverged, SAN, disaggregated).
Choose hardware
Pick a Premier Solution, Integrated System or Validated Nodes from the Azure Local catalog with a partner.
Check: The hardware model appears in the Azure Local catalog.
Register and deploy
Register machines with Azure Arc in a supported region and deploy the instance from the Azure portal.
Check: The Azure Local instance shows as deployed in the portal and machines are connected.
Create workloads
Create an Azure Local VM from a Marketplace image and an AKS cluster on the instance.
Check: Both resources appear in the resource group and respond on the local network.
Plan migration (optional)
Use Azure Migrate to replicate VMware or Hyper-V VMs to Azure Local.
Check: A test VM migrates and keeps its Arc tags and policies.
Official resources
Deciding whether you need it?
Three free tools apply Microsoft's own published guidance to your situation, and say when Azure Local or any new technology is not needed.
Sources
Each statement above links to the source it comes from. Labels say who reported it.
- What is Azure Local? Overview and key benefits (opens in a new tab)
- What's new in hyperconverged deployments of Azure Local (opens in a new tab)
- Azure Local product page (opens in a new tab)
- System requirements for Azure Local (opens in a new tab)
- Disconnected operations for Azure Local (opens in a new tab)
- Azure Local pricing (opens in a new tab)
- What is AKS Hybrid and Edge? (opens in a new tab)
- Azure Arc overview (opens in a new tab)
- Azure Virtual Desktop on Azure Local (opens in a new tab)
- Azure IoT Operations deployment overview (opens in a new tab)
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