The possibilities for running Azure in a private environment are becoming much greater. With the general availability of Azure Local and 365 Local, organizations can choose to run their applications, including AI tooling, offline.
Microsoft hopes this will give customers control over their IT infrastructure. In other words, organizations can now strengthen data sovereignty by using completely closed environments. Everything from critical systems to productivity apps and AI models is available locally. Data, identity, and systems remain entirely within their own operational boundaries, according to Microsoft. For governments, defense, critical infrastructure, and regulated industries, this means they can still choose the cloud without letting their data leave their own IT environment.
Azure Local disconnected operations makes it possible to run mission-critical infrastructure locally with Azure governance and policy control, without cloud connectivity. Microsoft 365 Local Disconnected brings Exchange Server, SharePoint Server, and Skype for Business Server entirely within this sovereign environment, similar to the on-premises Azure Local approach that organizations are already familiar with. These services will be supported until at least 2035. Support is never infinite, so a timeframe like this is a big step forward.
The minimum configuration for this appears to be three nodes, with 96GB of memory per node, 24 cores, a 2TB NVMe drive per node, and 960GB of boot disk storage. This is a very compact entry-level configuration, and organizations will likely choose to roll out more than this. It also appears that the basic requirement remains that organizations may be up to six months behind with their updates.
Large-scale AI models locally
Foundry Local further expands its offering with support for multimodal, large-scale AI models. Organizations can run these models locally on their own hardware, including modern GPU infrastructure from partners such as Nvidia. Other parties are not mentioned, but we suspect that AMD is or will be an option as well. This brings enterprise AI capabilities to on-premises systems, with local inferencing and APIs operating entirely within customer-controlled boundaries.
The solution supports both fully disconnected and connected modes. Organizations with strict sovereignty requirements can operate completely offline, while other customers retain the flexibility to switch between different connectivity modes based on mission, risk, and regulations. Azure Local disconnected operations, Microsoft 365 Local, and Foundry Local help organizations choose where workloads run and how environments are managed, with standardized governance and operational practices.
A new answer
Microsoft is taking a big step with this release. Sovereignty with the capabilities of the public cloud is also the goal of AWS European Sovereign Cloud, where the thinking is that the offering is as European as possible, knowing that the company remains a US hyperscaler. Microsoft offers similar options and has the same limitations. However, if, like AWS, it cannot access customers’ physical data, the latter group can breathe a sigh of relief. Although US cloud services are at best dubiously sovereign and metadata remains a point of discussion, today’s release has increased freedom of choice.