Azure Local or just Azure?

Four reasons come up again and again. Latency: anything talking to machines, tills, scanners or local users benefits from compute in the building. Data: large datasets are expensive to move to the cloud and expensive to pull back out, so workloads with heavy local data often cost less on-prem. Steady-state economics: a VM that runs flat out around the clock for years is usually cheaper on hardware you own than on hourly cloud pricing. And compliance or sovereignty: some contracts and regulators want data on premises you control. Azure Local gives you those benefits while keeping Azure's management, monitoring and services.

Elasticity and lifecycle. If your demand is spiky, seasonal or growing unpredictably, paying hourly for what you use beats buying peak capacity that idles. There's no hardware to buy, host, power, patch or replace in five years, and no capital outlay. You also get the full Azure service catalogue next to your VMs: managed databases, AI services, global regions. For bursty workloads, dev/test estates and anything internet-facing, native Azure usually wins.

Azure Local (formerly Azure Stack HCI) is Microsoft's on-premises Azure platform: validated server nodes in your building running VMs, containers (AKS) and Azure services, managed through the same Azure portal as your cloud estate. Storage comes from the flash inside the nodes rather than a separate SAN, and you pay a per-core subscription through your Azure bill instead of buying perpetual Windows licences. It's how you keep workloads local without giving up cloud tooling.

Azure Local is billed per physical core per month through Azure: a host fee, plus an optional Windows Server subscription that covers unlimited Windows VMs on the cluster. If you already own Windows Server Datacenter licences with Software Assurance, Azure Hybrid Benefit waives both fees, which changes the economics dramatically. The traditional three-tier route instead buys Windows Server Datacenter perpetual licences per host core, which cost more up front but nothing monthly. The calculator models all of this, including the Hybrid Benefit toggle.

Azure Local uses Storage Spaces Direct: the flash inside each node is pooled and mirrored across the cluster, so there's no SAN to buy, zone or support. A traditional three-tier design keeps compute and storage separate, which some teams prefer for familiarity or because they refresh them on different cycles. The mirror overhead means you buy more raw flash with Azure Local, but you drop the array, the fabric and the SAN support contract. One licensing catch to know: if you want Azure Local's management with an external SAN behind it, Microsoft bills roughly double the per-core rate for that tier and Azure Hybrid Benefit doesn't apply to it. The calculator prices all of this honestly, including a SAN sizing estimate, so you can see which way your numbers fall.

Yes to both. AKS runs on Azure Local at no extra platform charge; the worker nodes are just VMs on the cluster, managed through Azure Arc like any other AKS cluster. For disaster recovery, Azure Site Recovery works in both directions: replicate your on-prem VMs up to Azure for a cloud DR site without owning a second data centre, or replicate Azure VMs back down to your Azure Local cluster if you want the recovery site on your own kit. The calculator includes both directions at their different per-VM rates.

Azure Local runs on validated nodes from the mainstream vendors. We work directly with Dell, HPE and Lenovo to spec, price and supply the right kit, including the switches, and the same applies to hosts and SANs for a three-tier build. One quote, one delivery, one team doing the design, installation and the 24×7 support afterwards.

Yes. We run and support all three routes: Azure Local clusters, traditional three-tier estates and native Azure. The calculator's defaults are honest list-price ballparks, but a real recommendation needs your actual workload profile, your existing licences and your connectivity. Send us the numbers you put in the calculator and we'll sanity-check them for free.