Ignite 2025: Azure Local Goes Big

I’ve been to my fair share of Microsoft Ignite events over the years, and while each one has its share of announcements, some years just land differently. Ignite 2025 in San Francisco is one of those years, at least from an Azure Local perspective. The volume and significance of announcements this week is unlike anything I’ve seen for this platform since its original launch. Let me walk through what matters and why.

Azure Local at Scale: Hundreds of Servers

This is the headline, and it’s a big one. Azure Local has supported single clusters of up to 16 physical servers since inception. That’s been sufficient for many deployments, but it’s been a hard blocker for large enterprise data centre scenarios. Managing dozens of separate 16-node clusters to cover a large environment is operationally painful and architecturally limiting.

At Ignite, Microsoft announced that Azure Local can now scale to hundreds of servers using multi-rack deployments. This is not an incremental change. The architecture underpinning this capability is fundamentally different from what came before.

Multi-rack Azure Local uses separate aggregation racks for network and storage, and compute racks where the workloads run. The compute nodes are exposed as bare-metal machines, which are first-class Azure resources. And here’s the really interesting part: the infrastructure runs on Azure Linux rather than the Windows-based Azure Stack HCI OS, and uses a Kubernetes-based orchestration model instead of the traditional Failover Cluster and Hyper-V approach.

If this architecture sounds familiar, it should. It bears a striking resemblance to Azure Operator Nexus, which was Microsoft’s large-scale infrastructure platform targeted at telecommunications operators. It appears that the engineering investment in Nexus is now being brought to the broader Azure Local customer base.

For enterprise customers who have been limited by the 16-node boundary, this opens up entirely new deployment models. Large scale private cloud, big data workloads, dense container environments, all become achievable within a single Azure Local deployment rather than requiring federation across multiple small clusters.

SAN Support

The second major announcement is SAN support for Azure Local. This is something that enterprise customers have been requesting for years.

Azure Local now supports Fiber Channel connectivity to external SAN storage from leading vendors including Dell, Pure Storage, NetApp, Lenovo, HPE, and Hitachi. This means customers can connect their existing, trusted SAN infrastructure to Azure Local clusters and use it for workload storage.

A few important details: this is Fiber Channel first, with additional storage protocols on the roadmap. It’s currently supported for greenfield deployments only, you can’t attach a SAN to an existing Azure Local instance yet. And you still need Storage Spaces Direct alongside SAN, it’s not a SAN-only deployment model. S2D handles the infrastructure storage, while SAN provides additional capacity for workloads.

For Dell customers specifically, this means PowerStore and other Dell storage platforms can now be connected to Azure Local clusters. I’ll be writing more about the Dell PowerStore integration specifically in a follow-up post, because there’s a broader Dell Private Cloud story here that deserves its own treatment.

The enterprise significance of this cannot be overstated. Many large organisations have invested millions in SAN infrastructure over decades. Telling them they need to abandon that investment to adopt Azure Local was a non-starter. Now they can bring their existing storage with them.

NVIDIA RTX PRO 6000 Blackwell Server Edition

Microsoft announced support for NVIDIA’s latest RTX PRO 6000 Blackwell Server Edition GPU on Azure Local. This GPU is purpose-built for high performance AI workloads in on-premises and sovereign environments.

The capability claim is impressive: support for running over 1,000 AI models including GPT OSS, DeepSeek-V3, Mistral NeMo, and Llama 4 Maverick. For organisations building sovereign AI capabilities where data and models must remain on-premises, this is a significant enablement.

Combined with the GPU support that’s been maturing on Azure Local over the past year, the Blackwell GPU support positions Azure Local as a serious platform for on-premises AI workloads. This is no longer a future roadmap item, it’s a current capability.

Microsoft 365 Local

Microsoft announced general availability of Microsoft 365 Local, bringing core M365 server workloads to Azure Local. Exchange Server, SharePoint Server, and Skype for Business Server can now run natively on Azure Local in a connected mode, with a disconnected option for complete isolation coming early 2026.

This is fascinating from multiple angles. Microsoft spent the better part of a decade moving customers from on-premises Exchange and SharePoint to Microsoft 365 in the cloud. Now they’re providing a path to run those same workloads back on-premises. The driver isn’t a change of heart about cloud, it’s sovereignty. Government, defence, and regulated industry customers need these productivity workloads but can’t always consume them from a public cloud service.

Disconnected Operations GA

Disconnected operations for Azure Local have reached general availability. This means Azure Local can now operate in fully air-gapped environments with no connectivity to Azure. Deployment, management, and lifecycle operations can all be performed locally.

For sovereign and classified environments, this has been the missing piece. Azure Local now supports the full spectrum from fully connected to completely disconnected, with various levels of intermittent connectivity in between.

Dell at Ignite

Dell’s announcements at Ignite complement the Azure Local news. The integration of Azure Local with Dell Private Cloud and Dell PowerStore was announced, representing a new chapter in the Dell and Microsoft partnership. Dell AX nodes are validated for the new SAN support capability, and Dell is working with NVIDIA on validated GPU configurations for the Blackwell GPUs on AX hardware.

I’ll be covering the Dell Private Cloud and PowerStore story in detail in my next post. There’s a lot to unpack there, and it deserves focused attention.

The Big Picture

What strikes me about the totality of the Ignite 2025 announcements is the ambition. Eighteen months ago, Azure Stack HCI was a hyperconverged infrastructure platform for small to medium clusters. Today, Azure Local is a comprehensive private and sovereign cloud platform that can scale to hundreds of servers, integrate with enterprise SAN storage, run cutting edge AI workloads on the latest NVIDIA GPUs, host Microsoft 365 workloads, and operate fully disconnected from the internet.

The pace of evolution is remarkable, and it shows no signs of slowing down. If you’re in the hybrid infrastructure space, this is the most exciting time to be working in it that I can remember.