by Alex Zagury, CVP, Global Channel Sales
Hosting and hybrid cloud partners are making infrastructure decisions today that will shape how their businesses evolve and grow for years to come. Rising costs, licensing shifts, and platform uncertainty are adding pressure to existing operations, while customers are looking to you for modernization and AI readiness. The challenge is finding opportunities to grow while strengthening the business you already have.
In previous blogs, we explored the pressures and opportunities facing hosting businesses and shared a phased path for hosting modernization with Microsoft Adaptive Cloud. Now the conversation shifts from how to modernize to where to grow, and how that modernization can become the foundation for new managed services and recurring customer value.
The Three Horizons framework from the Microsoft Datacenter Optimization (DCO) initiative gives you three independent paths to consider: operate infrastructure better, modernize what you run, and turn data into intelligence. This isn't a sequential journey. You can start with the horizon that fits your priorities today and pursue others as customer needs evolve.
Wherever your business is today, there is a place to start, one that builds on your infrastructure investments, expertise, and customer relationships.
Horizon 1, Modern Hosting Provider: Operate infrastructure better
Many hosting partners, including those using the Services Provider License Agreement (SPLA) or Cloud Solution Provider (CSP) offering, manage customer workloads across mixed hypervisors, licensing models, and support arrangements. Horizon 1 focuses on getting more from that existing infrastructure by connecting it to Azure while workloads remain in your datacenter.
Azure Arc extends Azure management and governance to the environments you already operate. You can strengthen security with Microsoft Defender for Cloud and use connected Azure services to bring greater consistency to monitoring, patching, and policy management.
Azure Arc also creates opportunities to review licensing, including pay-as-you-go for Windows Server 2025, SQL Server and Extended Security Updates for eligible out-of-support workloads. For example, SQL Server instances licensed through SPLA can transition to Azure pay-as-you-go billing through CSP-managed subscriptions, with the required Azure Arc onboarding and recurring billing consent.
If you're responding to cost or licensing pressure, Horizon 1 can be a practical starting point. It also provides a foundation for recurring security, governance, and operations services that expand the value you deliver on infrastructure you already manage.
Horizon 2, Modern Application Platform: Modernize what you run
Horizon 2 focuses on the applications, desktops, and platforms your customers depend on. You can choose deployment options across Azure, Azure Local, and Azure Arc-enabled infrastructure based on workload requirements, data residency, and your modernization plans.
With Azure Local, you can run traditional Windows and Linux virtual machines alongside containerized applications on supported infrastructure in your datacenter. Azure Arc brings a consistent management approach across environments, while Azure Migrate provides discovery, dependency analysis, and readiness assessments so you can decide which workloads to modernize first.
Desktop modernization creates another service opportunity. Azure Virtual Desktop offers deployment options in Azure and on Azure Local. Azure Virtual Desktop Hybrid extends the service to supported existing on-premises infrastructure through Azure Arc. The right option depends on operating system, licensing, and deployment requirements.
You can also build managed SQL, Azure Kubernetes Service (AKS), and AI offerings around supported deployment options that meet customer needs. Each creates opportunities to extend a modernization project into ongoing platform management, governance, and optimization services.
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