Dive Brief:

• Microsoft is offering a new service that allows customers to put its cloud technology on in-house servers, according to reports ZDNet and Reuters. Known as Azure Stack, the hybrid computing solution is now available for order from the company’s three server partners — Dell EMC, Hewlett Packard Enterprise and Lenovo. Microsoft announced the new service Monday at its Inspire partner conference in Washington.

• Microsoft hasn't actually made the final code available to its partners yet, but the company is expected to deliver it in September. Cisco, Huawei and Avanade are all expected to supply Azure Stack appliances soon as well, according to ZD Net.

• Companies will be able to use Azure Stack services on a consumption basis.  

Dive Insight:

For companies that want all the benefits of the cloud without actually migrating to the cloud, Azure Stack may be the answer. The new service could be a good fit especially for companies in regulated industries that are prevented from using off-prem cloud services, or for companies that simply prefer to use their own data center infrastructure. With hybrid cloud, companies get all the perks of cloud but keep their data in-house.

Microsoft cloud rivals Amazon Web Services (AWS) and Google both already offer similar services, so Microsoft is looking to keep pace with them. Microsoft is currently considered number two in the cloud market behind AWS. But Microsoft has been coming on strong and rallying to close AWS' lead. The new offering gives companies looking for Microsoft cloud-type solutions without the full cloud commitment another option.

The move should also help strengthen Microsoft’s hybrid cloud strategy, an area where the company is already well-regarded. Gartner’s most recent Magic Quadrant report noted "many customers that are pursuing a multi-cloud strategy will use Azure for some of their workloads, and Microsoft's on-premises Azure Stack software may potentially attract customers seeking hybrid solutions."