Azure Local 23H2: Redefining the Future of Hybrid Cloud

In the ever-evolving world of hybrid cloud infrastructure, Microsoft continues to innovate to meet the demands of modern IT environments. With the release of Azure Local (version 23H2), organizations using Azure Stack HCI (version 22H2) now have a powerful path forward.

But this isn’t just another OS upgrade—it’s a strategic transition into a more integrated, automated, and cloud-connected platform that aligns your on-premises environment with Azure’s future.

In this blog, I’ll walk you through what Azure Local is, why the upgrade matters, and how to prepare for a smooth transition.

What is Azure Local?

Azure Local is the next evolution of Azure Stack HCI, delivering modern hybrid cloud infrastructure with deeper Azure Arc integration, streamlined management, and enhanced security. Built on a foundation of Infrastructure as Code (IaC) and lifecycle automation, Azure Local represents a shift in how on-premises environments are provisioned, configured, and maintained.

Rather than treating infrastructure as static, Azure Local introduces Lifecycle Manager (LCM) and Azure Arc as core components. Together, they ensure your systems are always in a known, desired state—backed by automation and central control from the Azure Portal.

Why Upgrade from Azure Stack HCI 22H2?

The upgrade from Azure Stack HCI 22H2 to Azure Local is more than just a feature update—it’s a transformation in infrastructure operations. Here’s what makes the upgrade worth considering:

• Deeper Azure Integration: Azure Arc provides consistent policy, monitoring, and security across hybrid resources.
• Automated Lifecycle Management: LCM automates updates, configuration drift correction, and overall system health.
• IaC-Driven Management: Provision and manage infrastructure using templates for repeatability and control.
• Security Enhancements: Take advantage of new capabilities like Windows Defender Application Control and BitLocker encryption.
• Future-Proofing: Azure Stack HCI 22H2 reaches end of support in May 2025.

Fig: Azure Local Version 23H2 components

Source: About Azure Local upgrade to version 23H2 – Azure Local | Microsoft Learn

Understanding the Upgrade Process

 Understanding the Upgrade Process

Upgrading to Azure Local involves two key phases:

1. Operating System Upgrade

• Upgrade from version 22H2 to 23H2 using standard upgrade tools.
• No disruption to your existing workloads, thanks to rolling cluster updates.

2. Azure Arc Enablement (Solution Upgrade)

• A guided experience through the Azure Portal activates Azure Arc and the full Azure Local platform.
• This enables centralized management, policy enforcement, and solution-level automation.

 Prepare with the Environment Checker

Before initiating the upgrade, use the updated Environment Checker tool. This will:

• Identify if your system has unsupported configurations or preview Arc components.
• Verify host networking setups (e.g., Network ATC).
• Provide actionable guidance to remediate any issues.

Running this tool in advance ensures you’re ready when the upgrade becomes available.

 Security & Compatibility Considerations

Your existing Group Policy Objects (GPOs) and security configurations remain intact after the upgrade. However, version 23H2 lays the foundation for more robust security postures, including:

• Support for BitLocker to encrypt disk volumes.
• Enablement of Windows Defender Application Control.
• Improved compliance with Microsoft’s security baselines.

One important caveat: Stretched clusters and Storage Replica are no longer supported in Azure Local. These configurations will need to remain on the OS-only upgrade path or be re-architected in the future.

Key Timeline: End of Support for 22H2

Azure Stack HCI 22H2 will reach its end of service in May 2025. After that, clusters will no longer receive monthly security and quality updates. Upgrading ensures your environment stays protected and supported.

Final Thoughts

Upgrading from Azure Stack HCI 22H2 to Azure Local is an opportunity to modernize your infrastructure with cloud-powered capabilities while maintaining control on-premises. It’s not just about new features—it’s about aligning with a future-ready model built on automation, integration, and scalability.

Take the first step today:

• Run the Environment Checker
• Review your system configurations
• Plan for a smooth rollout when Azure Local becomes available in your region

The future of hybrid cloud is here—and it’s local. WS-013T00-A: Azure Stack HCI Certification Course

About CloudThat

CloudThat is a leading provider of Cloud Training and Consulting services with a global presence in India, the USA, Asia, Europe, and Africa. Specializing in AWS, Microsoft Azure, GCP, VMware, Databricks, and more, the company serves mid-market and enterprise clients, offering comprehensive expertise in Cloud Migration, Data Platforms, DevOps, IoT, AI/ML, and more.

CloudThat is the first Indian Company to win the prestigious Microsoft Partner 2024 Award and is recognized as a top-tier partner with AWS and Microsoft, including the prestigious ‘Think Big’ partner award from AWS and the Microsoft Superstars FY 2023 award in Asia & India. Having trained 650k+ professionals in 500+ cloud certifications and completed 300+ consulting projects globally, CloudThat is an official AWS Advanced Consulting Partner, Microsoft Gold Partner, AWS Training Partner, AWS Migration Partner, AWS Data and Analytics Partner, AWS DevOps Competency Partner, AWS GenAI Competency Partner, Amazon QuickSight Service Delivery Partner, Amazon EKS Service Delivery Partner,  AWS Microsoft Workload Partners, Amazon EC2 Service Delivery Partner, Amazon ECS Service Delivery Partner, AWS Glue Service Delivery Partner, Amazon Redshift Service Delivery Partner, AWS Control Tower Service Delivery Partner, AWS WAF Service Delivery Partner, Amazon CloudFront, Amazon OpenSearch, AWS DMS, AWS Systems Manager, Amazon RDS, and many more.