BLOG: Explaining Azure Local additions to licensing and hardware ecosystem -June 2026

 

Changelog:
1.2 - improved readability in licensing comparison section, adding sources.
1.1 - corrections for S2D + SAN / or SAN only, added link for solution comparison.
1.0 - initial version


In this blog I will inform you about noteable additions and changes in terms of Azure Local Licensing and changes to the qualified, certified hardware required. Some of these changes also making it much easier re-using existing hardware with Azure Local, such as SANs.
As this blog uses a couple of acronyms, please make yourself familiar with these in the terminology section at the end of this post, as it differs a bit from what is used with Windows Server.

🆕Change 1 - Licensing updates:

Microsoft has released an addition to their all-known Azure Local pricelist and licensing conditions.

What's new?
Host Servicing Fee and revoked Azure Hybrid Benefits for Azure Local have been clarified based on its deployment decisions, when used with S2D + SAN  or SAN and ALDO. Formerly revoked for M365 Local through product terms changes.

With this Microsoft has introduced a new tier model for Azure Local Host fees based on the specific assignment of the deployed instance.

Tier 1: Azure Local using Storage Spaces Direct (default)

Tier 2: Azure Local for disaggregated deployments or hyperconverged deployments with external storage.

Tier 3: Azure Local with disconnected operations, locally hosted control plane.

Learn more about the the new Azure Local pricing tiers.
Important note: Please always consult Microsoft Product Terms preferably over other pages, slides etc., understanding the definitive terms that apply. 
Any licensing statements written or displayed outside Product Terms - including this blogpost - are considered complementary. They might be incomplete or outdated given the context and respective licensing program that applies.

🆕Change 2 - Azure Local Solutions - hardware and ecosystem changes:

Microsoft Azure Local Solutions page, formerly Azure Local Solution page (catalog), has seen a subtle but major overhaul some time ago. I would like to elaborate on these.

The previously well-known "pyramid" of hardware certification and defined feature and support set for Azure Local has been revised.

Tier 1: Premier Solutions

Tier 2: Integrated Systems

Tier 3: Validated Nodes

The new hardware certification and defined feature and support sets:

Tier 1: Premier Solutions

Tier 2: Integrated Systems

𝗪𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝗲𝗱 𝗼𝗿 𝘄𝗶𝗹𝗹 𝗵𝗮𝗽𝗽𝗲𝗻 𝘁𝗼 𝘆𝗼𝘂𝗿 𝗩𝗮𝗹𝗶𝗱𝗮𝘁𝗲𝗱 𝗡𝗼𝗱𝗲𝘀?

First, Validated Nodes not to confuse with Azure Local validated hardware - have been entirely removed from the Azure Local Solutions | Microsoft, formerly Azure Local Catalog, as a selectable solution category. Given the indications and filtering options - to my understanding - it is very unlikely that future hardware refreshes will be provided by the OEMs based on the Validated Systems. Thus I consider Validated Systems phased out / deprecated based on the readings on the Solution page, while there is no official announcement I am aware of.

𝗗𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝘃𝗼𝗶𝗱 𝘆𝗼𝘂𝗿 𝘃𝗮𝗹𝗶𝗱𝗮𝘁𝗲𝗱 𝗻𝗼𝗱𝗲𝘀 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝗱𝗲𝗽𝗹𝗼𝘆𝗲𝗱 𝗮𝗻𝗱 𝗿𝘂𝗻𝗻𝗶𝗻𝗴?

I'd say no in most cases based on the age of the hardware and would like to advise the following:

1. Brace and keep calm. 🙏🏻 Please consult the Azure Local Catalog for changes at your pace, identifying your deployed hardware. Checking for supportability (limited support or end of support statements). Validated Nodes are still visible in the Azure Catalog when choosing the filter options as shown in the picture, while the category filter itself has been removed.
   
   
2. Please check with your Microsoft Partner and OEM, if deployed and still supported Validated Solutions actually got upgraded / or are upgradeable to Premier Nodes. I have been informed some are upgradeable from Validated Solution directly to Premier Nodes but this requires a redeployment of the nodes.
   
   
3. How can I find my running Validated Nodes, when not listed (upgraded) in Premier Solutions or Integrated Systems?
   There is a selector on this in the Azure Local Solutions overview, call qualification generation.
   
   

Wait, is that a kind of upselling?

Speaking about the hardware for Azure Local, in my understanding this consolidation from a 3-tier model to a 2-tier model was long overdue and in my personal opinion I welcome it based on the technical changes and requirements Azure Local 23H2 and 24H2 implied. I wouldn't describe it as upselling and here is a pointer why:
Some time ago, most Integrated Systems (Nodes) have been upgraded to Premier Solutions at no additional cost to partners and customers by Dell Technologies. While Dell took the lead, many OEMs followed suit.
This also means that all fully supported deployed Azure Local nodes consistently support Quick Reboot, skipping lenghty BIOS POST time, when no UEFI firmware is pending for installation.

Thankfully though, the inital Azure Local 23H2 approach by Dell, which involved pairing Premier Nodes with a mandantory layer of OEM provided software, has been dismissed. This approach required customers accepting the benefits of Premier Solutions billing, storage capacity, CPU and RAM in return for a OEM specific management software and other OEM provided benefits. Vae victis, early adopters. While these remain support, this is no longer the case for Premier Solutions of neither OEM offering these.

What are your benefits when after the change potential upgrade? Please find this verbose comparison and also check the tabs on the top of the linked page: 
Comparison of Azure Local solutions. The benefits are huge, beneficial and practical for everyday operation, troubleshooting and support.

Why the change?

Microsoft has drastically improved the servicing workflow by using Azure Update Manager, Cluster Aware Update mechanisms and healthchecks, with the goal to near one-click automate the download, deployment and installation of SBE while also maintaining the Azure Local solution and keeping it up-to-date, with a friction-less and production-safe upgrade mechanism.

This means monthly patching for Azure Local, since version 12.x builds based on Windows Server 2025 kernel were introduced, upgrade and monthly update reliability has finally met and exceeded expectations. Note that 11.x builds starting from 23H2 had some 'first release issues', but all teams at Microsoft worked extremely hard to overcome these. Learn more about the Azure Local releases and their update, upgrade and supportability terms.

Azure Local Licensing Changes - Azure Hybrid Benefits for Windows Server Datacenter

sources:

https://www.microsoft.com/licensing/terms/productoffering/MicrosoftAzure/MCA#clause-2250-h3-1 (primary)

https://learn.microsoft.com/en-us/azure/azure-arc/servers/windows-server-management-overview (complementary)

https://azure.microsoft.com/en-us/pricing/details/azure-local/ (complementary)

https://learn.microsoft.com/en-us/windows-server/get-started/azure-hybrid-benefit?tabs=azure-local (complementary)

 

Azure Local Terminology

Missed anything, spotted wrong? Let me know in the comments below.