Marked Lack of Detail around Microsoft 365 Local

Microsoft’s June 16 announcement about “sovereign solutions empowering European organizations” (Figure 1) is obviously an attempt by Microsoft to reassure European customers that continuing to use Microsoft (U.S.-based) technology is a safe choice at a time when many question the policies of the current U.S. administration.

To be fair to Microsoft, they’ve been on the path to respect data sovereignty for many years, starting with the original “Black Forest” implementation of Office 365 for German customers to a point where multiple national-level datacenter regions are available within Europe. Microsoft’s continued efforts to provide comfort to customers who want their data stored in-country and under the control of European law is commendable.

However, the announcement of Microsoft 365 Local confused everyone. According to the announcement, “Microsoft 365 Local provides customers with additional choice by bringing together Microsoft’s productivity server software into an Azure Local environment that can run entirely in a customer’s own datacenter.”

Apart from the Name, No Trace of Microsoft 365

Applying the Microsoft 365 branding to the offering implies some form of connection to Microsoft 365. But apart from a need to connect to Azure., this solution seems to have nothing much to do with Microsoft 365 cloud services. Instead, it appears to be the on-premises versions of Exchange Server, SharePoint Server, and Skype for Business Server running on an Azure Local instance, defined as “a machine or a cluster of machines running the Azure Stack HCI operating system and connected to Azure.”

At this point, Microsoft hasn’t shared details of how the services connect together, but I assume that Active Directory is in the mix too. We also don’t know if the Azure-based local infrastructure operates as a separate deployment, can be integrated into an existing on-premises organization, or operate as part of a hybrid organization.

In other words, Microsoft 365 Local is a modernized example of a packaged Azure-based installation of Exchange, SharePoint, and Skype for Business built according to a reference architecture and accessed via the same kind of clients that people use today to connect to on-premises servers. Unsurprisingly, Microsoft 365 Local doesn’t include Teams because Teams relies so heavily on services from Exchange, SharePoint, OneDrive, Planner, and a bunch of Azure microservices.

The packaging might be innovative, and Microsoft marketing will certainly call the announcement a triumph for branding, but it has nothing to do with Microsoft 365. Anyone who steps back from using Exchange Online with its close integration with SharePoint Online will quickly discover how different things are.

Some Organizations Will Love Microsoft 365 Local

Although I hate the name, a place exists for a solution like Microsoft 365 Local. Some companies want to control their own destiny, which is why they continue running on-premises software; others don’t have sufficient external network capacity to be dependent on cloud services.

Other companies simply want to not have to deal with the blizzard of changes that Microsoft 365 customers have to cope with, or the constant nagging from Microsoft to adopt and use its AI-based tools like Microsoft 365 Copilot. European customers have a strong track record of respecting user privacy, and solutions like the recently-launched AI-powered People Skills are unlikely to be popular with unions or works councils.

Being able to purchase a packaged solution that is hopefully better integrated out-of-the-box is a nicer option than having to convince Exchange Server and SharePoint Server (for instance) to work together, an exercise that is usually guaranteed to frustrate. Presumably the solution leverages the subscription version of the three on-premises servers and will be paid for via an Azure subscription in the same manner as Azure Local.

Lack of Detail is Frustrating

The trouble is the total lack of detail currently available about Microsoft 365 Local. The above is inspired guesswork based on reading between the lines of Microsoft’s announcement. Many questions remain unanswered. Customers will need pricing and availability details from the various hardware vendors listed in the announcement are before they can decide if Microsoft 365 Local is for them. Migration from current on-premises deployments is another issue to resolve as is deployment alongside existing deployments.

The lack of detail is frustrating, but this is a classic marketing playbook: announce a product to gauge interest and follow up if the interest is there. It will be interesting to see what Microsoft 365 Local can deliver and at what cost.

Insight like this doesn’t come easily. You’ve got to know the technology and understand how to look behind the scenes. Benefit from the knowledge and experience of the Office 365 for IT Pros team by subscribing to the best eBook covering Office 365 and the wider Microsoft 365 ecosystem.