As organizations accelerate digital transformation across datacenters, sovereign environments, and edge locations, infrastructure architectures must evolve to meet new operational and regulatory demands.
The first feature update of Azure Local in CY 2026 (version 2604) marks a significant step forward—expanding Azure Local as a platform for sovereign private cloud infrastructure, introducing larger scale, disaggregated deployment architectures, expanded storage ecosystem partnerships, and simplified identity capabilities that unlock entirely new infrastructure scenarios from edge locations to enterprise-scale environments.
This release is focused on enabling:
- Sovereign private cloud deployments at scale from single node up to multi-rack infrastructure
- Infrastructure modernization through SAN reuse and disaggregated architectures
- Simplified edge deployment without Microsoft Active Directory dependencies
- Faster lifecycle operations across deployment and update workflows
Introducing disaggregated larger scale deployments using SAN storage
Azure Local now supports a disaggregated infrastructure architecture, allowing customers to deploy compute and storage resources independently—while continuing to benefit from an Azure-consistent management and operational experience. This enables organizations to scale infrastructure more flexibly separating compute and storage to align with workload demands and long-term growth.
This architecture enables:
- Independent scaling of compute nodes and storage infrastructure
- SAN‑only and hybrid storage architectures for Azure Local infrastructure and workloads
- Fibre Channel (FC) connectivity support beginning with 2604 (iSCSI coming soon)
With disaggregated deployments and SAN storage, Azure Local clusters can now scale from a single node at the edge to multi-rack environments spanning beyond 16 nodes and up to thousands of nodes, addressing growing demand for large-scale deployments across sovereign, government, defense, and regulated environments. This unlocks new class of Azure -consistent infrastructure deployments at sovereign scale.
This unlocks a new class of Azure-consistent infrastructure deployments at sovereign scale. This new capability is generally available with the release of Azure Local 2604.
General Availability of SAN Support for Azure Local
Support for attaching SAN storage to Azure Local was introduced as public preview back in November 2025. Today this brownfield expansion capability is generally available and allows external SAN devices to be introduced into already deployed Azure Local instances via Fibre Channel (FC)—supporting virtual machines, Kubernetes environments, and Azure Virtual Desktop workloads without requiring disruptive infrastructure changes or full system refresh.
Azure Local instances now support the coexistence of Storage Spaces Direct volumes and external SAN volumes.
Support for SAN-attached deployments allows organizations to:
- Reuse existing enterprise SAN investments
- Modernize infrastructure without replacing existing storage estates
- Manage rising disk costs associated with hyperconverged architectures
- Enable workload scenarios that depend on massive storage requirements
These innovative capabilities supporting disaggregated deployments and SAN storage are supported by a strong ecosystem of hardware partners.
DataON, Dell Technologies, Everpure, HPE, Hitachi Vantara, Lenovo and NetApp are working with Microsoft to deliver configurations, giving customers more flexibility in how they design and scale their infrastructure.
General Availability of Local Identity with Azure Key Vault
While disaggregated architectures primarily target sovereign and centralized datacenter deployments, Azure Local 2604 also introduces a major advancement for distributed and edge scenarios.
With the General Availability of Local Identity with Key Vault, Azure Local can now be provisioned without infrastructure dependencies on Microsoft Active Directory, enabling simplified deployment in disconnected, air-gapped, and regulated environments.
This simplifies deployment and adoption, by removing the need for extra hardware running domain controllers and removing the complexity of firewall configurations when installing in isolated network environments.
Azure Local 2604 adds support for deploying rack-aware clusters using Local Identity with Azure Key Vault. This combines reduced requirements with the high availability that customers demand across manufacturing, energy, and other industries. This capability removes one of the key barriers to deploying Azure-consistent infrastructure in sovereign and edge environments.
Pricing Changes
Pricing for multi-rack and sovereign-scale deployments is being introduced as part of this release. Customers should connect with their Microsoft account team to learn more about pricing, configuration options, and early access programs as these offerings continue to actively evolve.
Getting started
Release 2604 is available for both existing and new Azure Local instances.
- Review the release note for Azure Local 2604 release here
- Learn more about disaggregated deployments here
- Learn more about SAN attach here
- Learn more about Local Identity with Azure Key Vault here.
- Learn more about hardware configurations that support disaggregated deployments using the solutions catalog or learn directly from our partners:
o DataON: “DataON Premier Solutions for Azure Local provide a premium Azure Local experience that includes deployment, integration, training, and white glove service & support. Our goal is to not only get you up and running quickly but also to help your team to be confident in managing Azure Local.”
o Dell Technologies: “Coming Soon, Dell Private Cloud–Microsoft enables a modern disaggregated architecture, simplifying operations across Dell PowerEdge compute, Dell PowerStore storage, and Azure Local.”
“Available now, Dell PowerStore delivers high-performance, scalable, and resilient storage for Azure Local, with support for Dell Private Cloud coming soon to make it easier to streamline operations for storage, compute, and your Azure Local license.”
o Everpure: “Azure Local now supports external storage with Everpure FlashArray, offering Azure Local customers unprecedented levels of scale, performance and efficiency with the added benefit of seamless hybrid cloud integration with Everpure Cloud in Azure.”
o Hitachi Vantara: “Hitachi Vantara VSP and VSP One Block, fully validated to meet Microsoft's Azure Local storage requirements, deliver enterprise SAN reliability for Azure Local.”
o HPE: “HPE ProLiant Compute Premier Solutions for Azure Local enable customers to gain full control over data residency, and accelerate innovation with industry-leading performance, security, and management automation.”
“HPE Alletra Storage MP B10000 integrated with Azure Local delivers a unified, Azure managed experience with the simplicity of Azure Local plus the advanced data services of a modern enterprise storage platform.”
o Lenovo: “Lenovo is expanding its Azure Local portfolio to support disaggregated infrastructure designs that deliver greater choice across compute and storage. The ThinkAgile Disaggregated Solution for Microsoft Azure Local with new compute-only configurations on ThinkAgile MX Series enables customers to integrate ThinkSystem DM, DS, and DG Series storage arrays or bring their own Azure Local validated third party SAN arrays into new or existing Azure Local environments, allowing fully disaggregated, independent scaling using enterprise class Lenovo solutions for sovereign private cloud deployments and emerging AI workloads.”
o NetApp: “With Azure Local, NetApp delivers support across NetApp® AFF, ASA, and FAS systems.”
Thank you!
This first feature release of 2026 is packed with innovation for Azure Local, and we can’t wait for you to try it and share feedback. We are committed to listening to your feedback and delivering the next wave of capabilities in a continuously evolving world. Thank you to all our customers who trust Azure Local to run their business—and to our engineering partners for the incredible collaboration in building solutions together.
Microsoft