Microsoft has revealed that its on-prem cloud offering, Azure Local, is now scalable up to thousands of servers.

This means that customers can create a single sovereign environment within large-scale footprint data centers.

To date, Azure Local has typically been marketed as an on-prem or Edge offering, in which customers put Microsoft hardware in their own data centers, thus creating a sovereign and private cloud solution.

In November 2025, the company announced it had expanded Azure Local, with it previously being able to support up to 16 servers. As of that expansion, it could scale into the hundreds.

Now, according to a Microsoft blog post, it can scale to the thousands.

Microsoft explained that this development comes as "digital sovereignty postures evolve and regulatory requirements tighten across regions, infrastructure strategies are increasingly shaped by the need to maintain jurisdictional control over data, operations, and dependencies.

"At the same time, AI and data-intensive applications are moving closer to where data is generated, requiring infrastructure that can scale to support larger deployment footprints while maintaining operational control, compliance, and data residency requirements within sovereign environments."

Azure Local can reach this scale within a single sovereign boundary, and without architectural redesign, according to the company.

Customers already using large-scale Azure Local deployments include AT&T, the Netherlands' land registry and mapping agency Kadastar, and FiberCop in Italy.

“As a government agency responsible for some of the Netherlands’ most sensitive data, we need infrastructure that gives us full control over where our data lives and how it’s governed. Azure Local has been a consistent foundation for that – and as our workloads grow in scale and complexity, the platform has grown with us,” said Maarten van der Tol, general manager of Kadaster.

Azure Local is available with compute and enterprise storage platforms from partners including DataON, Dell Technologies, Everpure, Hitachi Vantara, HPE, Lenovo, and NetApp, allowing organizations to integrate existing Storage Area Networks (SAN). It also has AI capabilities with the Intel Xeon 6 processors, and in late 2025 brought in the Nvidia RTX Pro 6000 Blackwell Server Edition GPU to the platform.

While Azure Local is scaling up, it is still retaining its roots in smaller footprints. At the start of this month, Microsoft and Armada teamed up to bring Azure Local to Armada's ruggedized Galleon modular Edge data centers. The largest "Galleon" is dubbed Leviathan, and offers up to 1MW of compute. Most are smaller-scale and containerized data centers.