Microsoft brings 365 suite on-prem as part of sovereign cloud push

Microsoft has created a version of its 365 productivity suite that runs on-premises, as part of a move to satisfy European regulations.

"Microsoft 365 Local" only runs on Azure Local, the subset of Redmond's cloud that brings the same hypervisor used in cloudy Azure on-prem. Microsoft suggests Azure Local as the environment in which to run applications that perform better on-prem due to requirements for low latency or security.

The software giant on Monday pitched Microsoft 365 Local as offering customers the chance to run the service "in environments they fully control."

A canned quote from Microsoft executive veep and chief commercial officer Judson Althoff states "Microsoft 365 Local enables customers to deploy Microsoft productivity workloads like Exchange Server and SharePoint Server in their own datacenters or sovereign cloud environments - with full control on security, compliance and governance."

The main audience for Microsoft 365 Local appears to be European customers, as Microsoft announced it in the context of what Althoff described as "comprehensive sovereign solutions empowering European organizations."

Those solutions include "Data Guardian," an offering that means only Microsoft staff based in Europe can access the company's cloud infrastructure on the continent. Microsoft already operates an EU Data Boundary that aims to ensure European customers' data doesn't leave the bloc's boundaries. Althoff wrote that the Guardian means "All remote access by Microsoft engineers to the systems that store and process your data in Europe is approved and monitored by European resident personnel in real time and will be logged in a tamper-evident ledger."

Microsoft' also extended its External Key Management to Azure Managed (Hardware Security Module), which means customers can store the keys they use for Azure on-prem. This one seems more aspirational than ready-to-roll, as Althoff wrote that Microsoft "is working with major HSM manufacturers such as Futurex, Thales and Utimaco to ensure their support."

Althoff's post also noted that Microsoft's sovereign cloud service is currently in preview and "set to be generally available in all European cloud regions later this year."

And that appears to be the nub of his post and the announcement of the services mentioned above, as European laws such as the General Data Protection Regulation aim to guarantee data sovereignty for EU citizens and Microsoft needs to comply. The Register has also reported that European users are increasingly concerned that changes to the US/Europe relationship brought on by the second Trump administration's policy changes mean working with US hyperscalers now involves heightened risks.

More on-prem offerings and tighter controls that ensure data doesn't leak outside Europe might satisfy some buyers. ®