Every organization I talk to is trying to answer a variation of the same question: How do we modernize infrastructure and take advantage of cloud innovation without giving up control of our data, existing investments, or operational flexibility?
For many enterprises, the answer is no longer simply "move everything to the public cloud."
Some workloads must remain close to factories, hospitals, offices, or users. Some data must stay within a country or regulatory boundary. Some applications depend on predictable performance and availability. And many organizations already have years of investment in enterprise storage, data protection, and operational processes that they do not want to replace simply because the virtualization platform is changing.
At the same time, IT teams still want what the cloud has taught them to expect: consistent operations, automation, centralized management, APIs, policy-driven infrastructure, and faster access to new services.
The challenge is giving organizations the freedom to place applications and data where they make the most sense while operating them consistently. That's where Azure Local and NetApp come together.
The best of Azure, where you need it
Think about what people love about Azure. They love the consistency. The automation. The management tools. The ability to modernize infrastructure without constantly reinventing the wheel.
Azure Local extends the Azure operating model into customer-controlled environments, allowing organizations to run workloads in their own datacenters and distributed locations while using Azure-based management, governance, monitoring, and automation. Microsoft is increasingly positioning Azure Local as a foundation for sovereign and private cloud environments where control, compliance, and operational consistency matter most.
In simple terms, Azure Local gives organizations more freedom to decide where workloads run without creating an entirely separate operational model for each location.
Modernization shouldn't require rebuilding the data layer
For enterprise customers, however, infrastructure modernization often creates another problem: Why should changing the compute or virtualization platform require changing the storage architecture too?
Many organizations already operate mature enterprise SAN environments supporting large estates of business-critical workloads. Those environments represent more than storage capacity. They include operational knowledge, resiliency practices, data protection policies, security controls, and years of infrastructure investment.
Support for external enterprise storage with Azure Local creates a different modernization path. Customers can modernize the virtualization and operational layer while continuing to use enterprise storage for the workloads and data that depend on it.
This ability to separate compute and storage is particularly important in large datacenters, where compute capacity and storage capacity rarely grow at the same rate. Rather than forcing both to scale together, customers gain greater flexibility to evolve each layer according to business requirements.
But infrastructure is only half the story
Anyone who has worked in IT knows the infrastructure isn't usually the hard part.
The hard part is the data. How do you protect it? Replicate it? Govern it? Move it between environments? Keep it secure while supporting new applications and AI initiatives?
That's where NetApp becomes strategically important.
NetApp allows customers to modernize the compute and virtualization layer without forcing a simultaneous redesign of the data layer.
ONTAP provides enterprise storage capabilities for availability, efficiency, protection, security, replication, and lifecycle management that many organizations already depend on for mission-critical workloads. And because NetApp spans on-premises and Microsoft Azure environments, customers can build a data strategy that extends beyond a single infrastructure platform.
The result is a cleaner separation of concerns: Azure Local provides the cloud-connected infrastructure and operational model, while NetApp provides the enterprise data foundation underneath it.
Customers can decide where applications should run while maintaining consistent capabilities for managing and protecting the data those applications depend on.
A practical path for virtualization modernization
This becomes particularly relevant as organizations reassess their virtualization strategies.
Many enterprises considering alternatives to their existing virtualization platforms already run their most important workloads on shared enterprise storage. For those customers, replacing the hypervisor, servers, networking, storage, backup architecture, and operational processes simultaneously creates unnecessary cost and risk.
Azure Local with NetApp offers another approach: modernize the virtualization platform while preserving the enterprise data architecture where it still makes sense.
That can reduce the number of variables customers must change at once and allow infrastructure teams to modernize incrementally rather than treating virtualization transformation as a complete datacenter rebuild.
Diagram: NetApp ONTAP intelligent data infrastructure.
Azure Local and NetApp give organizations the flexibility to modernize compute and virtualization while maintaining an enterprise data foundation that extends across on-premises and Azure environments for HPC and AI-driven insights, real-time analytics, and secure, scalable workflows.
A modernization deployment we're seeing more often
Imagine a global manufacturer running thousands of virtual machines across regional datacenters and production sites.
Central IT wants to standardize infrastructure operations around Azure, while individual countries must meet local requirements for data residency, security, and availability. At the same time, the company has already invested heavily in enterprise storage, SAN networking, data protection, and operational processes.
A virtualization modernization should not require replacing all those layers at once.
With Azure Local, the organization can introduce a cloud-connected operating model for infrastructure in its own datacenters. With NetApp, it can continue using an enterprise data platform designed for the availability, protection, efficiency, and lifecycle requirements of business-critical data.
The company can modernize the compute and virtualization layer while preserving the data architecture where doing so provides operational and economic value.
And over time, it can decide workload by workload which applications remain local, which use Azure services, and which move to the public cloud.
Instead of choosing between cloud innovation and infrastructure control, the organization gains the flexibility to evolve each layer on its own timeline.
And increasingly, this matters for AI
AI initiatives often depend on large volumes of proprietary data that cannot simply be copied into every compute environment. In many cases, organizations will need to bring compute and AI services closer to governed enterprise data rather than continually moving that data toward compute. A flexible infrastructure and data architecture lets organizations place compute where it is needed while retaining control over the data that differentiates their business.
Why this matters now
The conversation around hybrid cloud has changed. A few years ago, hybrid cloud was primarily about migration. Today, it's about flexibility.
Organizations want the freedom to decide where applications run and where data resides. They want to meet sovereignty and regulatory requirements without slowing innovation. They want to preserve investments that still provide value rather than replacing infrastructure simply because another layer of the stack is changing.
And increasingly, they want infrastructure architectures that allow compute and data to evolve independently. Azure Local and NetApp fit naturally into that model. Azure Local provides a cloud-connected infrastructure and operational experience. NetApp provides the enterprise data foundation. The most important benefit isn't simply that Azure Local runs on-premises or that NetApp connects on-premises and cloud storage.
It is architectural choice.
Customers can modernize compute without automatically replacing storage. They can adopt a cloud operating model without forcing every workload into the public cloud. They can preserve enterprise data services while changing virtualization platforms. And they can decide over time which applications and data belong locally, in Azure, or across both.
Enterprise modernization should not require customers to choose between a cloud operating model and the data architecture they already trust.
Azure Local and NetApp give organizations another path: modernize what needs to change, preserve what continues to deliver value, and evolve the architecture at the pace the business requires.
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