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Azure Stack. How Does It Stack Up?

There have been some interesting changes within the hybrid cloud space recently, with Microsoft releasing their Azure Stack platform which allows you to run your own Azure compatible environment within your data centre.

I have previously discussed the cost of public and private cloud infrastructure for static environments. So how does Azure Stack, stack up?

We strongly believe that in the short and medium term most organisations will have workloads sat on premise and in the public cloud. This is because some applications require scale of the public cloud, while also minimising cost for other applications. IT are then left trying to balance these requirements, which often leads to two independent and disparate systems.

We have been analysing Azure Stack use cases to determine where it might fit best for businesses. Microsoft use the following typical scenarios: Edge and disconnected compute, regulatory requirements and cloud application on premise (further information can be found on their website). However, we aren't focusing on those - instead we will be looking at two other uses cases: Corporate hybrid cloud and phased cloud transition.

Corporate Hybrid Cloud

Corporate hybrid cloud involves building a platform that is both scalable and cost effective. Azure Stack fits this wonderfully as it offers the cost effectiveness of on premise compute, whilst allowing you to use the same management interface and scale of the public Microsoft Azure cloud.

Phased Cloud Transition

Phased cloud transition is for businesses who want to migrate to the public cloud, but whose applications are not suitable. However, they require a platform that will allow them to redevelop their applications using the same APIs and tools that they would use in the public cloud, whilst not costing them a vast amount of money to do so.

Scaling Azure Stack

The basis for these two use cases comes from the costing of Azure Stack as it scales; Azure Stack requires an upfront capital hardware cost, and an ongoing cost to run the virtual machines (VMs). However, the cost of these VMs is roughly 62% lower than running on demand in the public cloud.

So, at what scale does it become more cost effective to run virtual machines within an Azure Stack, compared to the public cloud?

Our first calculation looked at the per VM cost of a single instance in the Azure Public Cloud - a small, medium and large Azure Stack, with the environments at capacity. We looked at the costs at year zero through to year five with power, cooling and racking costs considered.

Azure Stack 5Y.png

Interestingly, after five years Azure Stack is cheaper no matter what size platform you are looking at. You may be thinking that five years is a long period of time, but many customers are running Windows Server 2008 or 2012 virtual machines - both of which can be over five years old.

If you are operating at a larger scale, Azure Stack can make sense after as little as 15 months. Therefore, even if your end goal is public cloud, it can offer a very effective stop gap to allow you to replatform your applications whilst preparing to move to the public cloud.

Running at Capacity

One of the concerns around Azure Stack is the upfront capital investment. Whilst there are ways of turning this into operational expenditure, the breakdown of the cost of running Azure Stack over five years at full capacity tells a very different story:

Azure Stack Costs.png

After five years the capital cost of the small Azure Stack is only 21% of the overall solution, dropping to 11% for the largest platform. This allows businesses to gradually transform to a model that is based much more on operational costs, rather than traditional large capital investments in infrastructure and perpetual licensing.

Hybrid Cloud Pivot Point 

It is clear to see how the first use case can be made, as Azure Stack provides a more cost effective platform for Infrastructure as a Service virtual machines than the Azure Public cloud - assuming the workload is static. However, Azure Stack allows you to leverage the same management dashboard to run and manage your on premise Azure Stack as your public cloud instances.

The second use case is not purely about cost; whilst the cost of transition needs to be minimised which Azure Stack helps achieve, there is also the requirement to have the same APIs and tooling as a public cloud environment. This is something that Azure Stack excels in - you can run your traditional applications as standard VMs whilst you write or redevelop applications using Web Apps or API apps, amongst other capabilities, to make them optimised for a cloud environment.

We believe that Azure Stack is a pivot point for hybrid cloud; being an affordable platform with the integration and capabilities of the public cloud.

We have a demonstration environment ready to help our customers realise the value they can get from deploying Azure Stack - and see its capabilities first hand.

Azure Stack Dashboard.png

If you would like to understand more around Azure Stack then please contact your Ultima account manager or contact us.


  • All costings for Azure Stack are based on an assumed achievable discount level and are not a guarantee of pricing
  • The small Azure Stack environment is suitable of running 256 D1v2 virtual machines; the medium 760 D1v2 virtual machines and large 1704 D1v2 virtual machines
  • Power, cooling and racking costs are considered with the Azure Stack costings
  • Azure public cloud costings use Azure Compute pre-paid

- By Matthew Beale (Storage Solutions Specialist) 


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