Azure Local is essentially the new name for Azure Stack HCI. Azure Local targets organizations who continue to have the need to run workloads upon on-premises infrastructure for compliance, security or other needs. Azure Local is often evaluated by organizations pursuing hybrid cloud strategies.
Azure Local is hyperconverged infrastructure software that runs directly on bare metal hardware validated by OEM partners. With it, you can run containers, virtual machines (both Linux and Windows VMs), and some Azure services at distributed locations with central management from the cloud, enabled by Azure Arc. Microsoft provides and supports the complete software stack, so you don’t need separate tools or vendors for the underlying virtualization or storage.
Azure Local is a hybrid product that connects the on-premises system to Azure for cloud-based services, monitoring, and management.
Azure Local can only be run upon hardware validated by Microsoft OEM partners, this means that it usually requires a dedicated hardware purchase to deploy. Many OEMs will provide their compatible hardware with Azure Local pre-installed.
Azure Stack HCI is now part of Azure Local. The same features and functionality continue to be offered in Azure Local. Azure Local provides additional flexibility: it supports smaller and larger deployments, more hardware, disconnected operations, and other capabilities such as new supported Azure services. Azure Local is essentially support for Azure Stack HCI in a wider range of configurations and scenarios.
Architecturally little has changed and a large amount of the Microsoft documentation continues to describe and explain the product using the “Azure Stack HCI” nomenclature / naming.
Azure Arc is a bridge that extends Azure to other environments and other clouds. Azure Local is an infrastructure solution that includes the capabilities of Azure Arc built-in and sets up automatically. Use Azure Local when you need new or refreshed infrastructure at distributed locations. Use Azure Arc when your environment already has infrastructure.
No, customers own the hardware and have full responsibility for its day-to-day operations.
Some Azure Local customers choose to outsource some or all of the operational management to professional services providers or similar.
The hardware compatibility lists for Azure Local are available in a catalogue maintained by Microsoft. See: Azure Local Solutions | Catalog.
Azure Stack HCI can combine the following:
Remembering that Azure Local is built upon Azure Stack HCI, common use cases for Azure Local are:
Azure Local offers an on-prem technology that suits certain needs particularly well, such as:
Organizations already invested in Microsoft technologies
If your environment is Microsoft-centric, Azure Local benefits include:
Typical examples:
Hybrid Cloud and Edge Deployments
If you need to keep some workloads on-premises (for latency, data residency, or regulatory reasons) and already use or plan an Azure integration, Azure Stack HCI is ideal.
Example use cases:
Modernization of Legacy On-prem Virtualization Environments
Organizations using old Hyper-V clusters or VMware and SAN architectures may find the underling HCI stack of Azure Local an easier to scale alternative based around software defined infrastructure (compute + storage + networking). Features such as Storage Spaces Direct may appeal.
Azure Hybrid Cloud Strategy
If your IT strategy already includes Azure, Azure Local may be the natural choice, especially if you are:
In these scenarios Azure Local / Stack HCI gives you the “Azure experience” locally — same APIs, billing, and even unified policy enforcement.
VDI (Virtual Desktop Infrastructure) or Remote Workloads
Azure Local works particularly well for delivering AVD (Azure Virtual Desktop), closely integrated Microsoft technologies, it’s a good choice for those looking for a one-stop VDI solution for:
AVD is often evaluated as an alternative to Citrix Virtual Apps & Desktop (CVAD) and Omnissa Horizon.
Azure Local is often evaluated alongside solutions from Nutanix. Nutanix also offer HCI (Hyper Converged Infrastructure). The following table covers some of the similarities and differences between the two solutions and may help you evaluate which may be the best fit for your organization.
| Azure Local | Nutanix | |
| Hybrid Cloud Integration | Very strong; built to integrate with Azure services (monitoring, backup, Site Recovery, Arc, etc.) | Strong multi-cloud and hybrid support; can extend on-prem to Azure or other clouds via Nutanix Clusters etc. |
| Ecosystem Fit | Good fit if already invested in Microsoft stack (Windows Server, Azure, Active Directory) | More agnostic; supports mixed environments and flexibility in hypervisor choice |
| Management & Operations | Uses Windows Admin Center, Azure management tools, and native Azure tooling | Provides its own management plane (Prism), unified for compute, storage, networking |
| Hypervisor Options | Windows/Hyper-V + HCI stack | Offers AHV (its own hypervisor) or supports VMware ESXi, Hyper-V, etc. |
| Flexibility & Portability | Good for workloads that stay local with cloud integration; less abstraction from Azure | More flexibility, especially in moving workloads across clouds or data centers, because it’s more vendor-neutral |
| Performance & Scalability | Strong performance for many workloads; Microsoft validates hardware and configurations | Very mature performance, especially in environments with heavy I/O, because Nutanix optimizes storage, caching, data locality |
| Cost Model | Subscription/licensing tied to Microsoft and Azure usage; you may get benefits if you already have Azure agreements | More freedom of hardware/software choice; but licensing costs, support, and scale economics are key considerations |
| Vendor Lock-in Considerations | Strong tie to Microsoft’s ecosystem; easier to leverage Azure but also more bound to it | Less tied to a single cloud vendor; easier to shift across different hypervisors or clouds |
