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  • 8 min read

Advancing hybrid cloud to adaptive cloud with Azure

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The need for a unified platform and system to address these challenges is evident. We believe Azure is the platform that can help, and we have been investing in Azure Arc to solve these problems. We see an opportunity to do more by bringing together agility and intelligence so that our customers can proactively adapt to change, rather than react to it and maintain a competitive edge in a dynamic landscape. 

The pace of change in the world around us is incredible. Between the impact of new, transformational technology, fluctuations in the economic landscape, and the hybrid nature of the post-COVID-19 world—we see customers across every industry taking action to innovate and adapt at this important inflection point. Entering the era of AI, the pace of change will only accelerate.

Our customers constantly innovate to keep pace with rapid market shifts and technological advancements, but they require a common innovation and operations platform that spans business initiatives. They’re finding that in the rush to innovate, they’ve spun up different projects and initiatives throughout the organization—each with its own approach. Specifically, they are asking us for help in three large areas: 

  • Sprawling systems: Most companies are dealing with an explosion of resources. Servers and devices in the operational edge and IoT, in addition to multicloud deployments, can be overwhelming. Basic tasks like patching, configuring, and securing get exponentially harder with every new location and technology.
  • Siloed teams: Rapid innovation is happening in every business unit—usually in an uncoordinated way. Often, there’s little chance to share work or learnings. Compounding matters, IT, development, and operational technology (OT) teams also tend to run separate technology initiatives and roll out new technology in an uncoordinated manner resulting in duplicated effort and increased financial and security risk. Over time, the silos unintentionally entrench talents in a single project or tech stack, artificially limiting their impact.
  • Technical debt: Short-term solutions, without a comprehensive long-term strategy, often result in systems incompatibility that keeps valuable data trapped where it’s created and can’t be leveraged to improve the business.
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Boost innovation with Azure

Leverage cloud-native and AI technologies to work simultaneously across hybrid, multicloud, edge, and IoT.

The need for a unified platform and system to address these challenges is evident. We believe Azure is the platform that can help, and we have been investing in Azure Arc to solve these problems. We see an opportunity to do more by bringing together agility and intelligence so that our customers can proactively adapt to change, rather than react to it and maintain a competitive edge in a dynamic landscape. 

The adaptive cloud approach for Azure

We are excited about the momentum we have with Azure Arc. There are over 21,000 active customers, and we’re continuing to see excellent growth. With Azure Arc, we crossed the boundaries of existing market categories, whether that is hybrid, multicloud, edge, or IoT. Customers aspire to the next level of modularity, integration, and simplicity. We believe that our customers can achieve this aspiration with a new approach which we call adaptive cloud.


The adaptive cloud approach unifies siloed teams, distributed sites, and sprawling systems into a single operations, security, application, and data model, enabling organizations to leverage cloud-native and AI technologies to work simultaneously across hybrid, multicloud, edge, and IoT.

An adaptive cloud approach shifts organizations from a reactive posture to one of proactive evolution, enabling people to anticipate and act upon changes in market trends, customer needs, and technological advancements ahead of time. This strategic foresight enables businesses to pivot quickly, embrace continuous improvement, and integrate new technologies seamlessly. By building resilience into their operational models, businesses can optimize resource usage and mitigate security and business risks before they manifest.

Innovative Azure capabilities

Azure is adopting the adaptive cloud approach by building on the work we have started with Azure Arc, as an extension of Azure Resource Manager (ARM). Azure Resource Manager keeps track of a rich set of configurations, logs, and metrics for every resource in Azure. It is a single source of truth for your Azure investments. Azure Arc enables you to project hybrid, multicloud, edge, and IoT resources to Azure Resource Manager. Not only can you create a single source of truth, but you can easily apply cloud services across your globally distributed digital estate. For example, observability tools in Azure, like Azure Monitor, give you visibility across thousands of assets in one place. Our security offerings and features, like Microsoft Defender for Cloud, Microsoft Sentinel, or Azure Policy for security enforcement, enable you to develop and improve your security posture. You can accomplish a lot with Azure Arc today but you will be able to do even more as we are envisioning a world where you can leverage AI to amplify your impact across existing and new scenarios.

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Figure 1: A mix of Azure and Azure Arc enabled servers in Microsoft Defender for Cloud

Operate with AI-enhanced central management and security

Over the last few years, we’ve been investing in making many core Azure management and security capabilities available through Azure Arc. Having central visibility and security is the most common scenario our customers are taking advantage of. Features and services like role-based access control, Azure Policy, Key Vault, Microsoft Defender for Cloud, Microsoft Sentinel, and Azure Monitor are all available today to use across your digital estate.

We just announced the preview of Microsoft Copilot for Azure. Going forward, Copilot will be able to reason over the information you put directly into Azure Resource Manager or other services, like Azure Monitor, regardless of the location of those resources.

From there, you will be able to transform the way you work across the digital estate. Troubleshooting, for example, can be tedious. Going through logs, sending emails, and reading documentation can be monotonous. Copilot enables you to analyze the resource metrics and explore resource configuration and status at scale. Copilot also enables deeper exploration and intelligent assessment, such as anomaly detection of unexpected changes, and provides recommendations to address the issues from cloud to edge.

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Figure 2: Using Copilot to get status across heterogeneous environments during active troubleshooting.

For example, with Azure Stack HCI version 23H2 preview, you can use Microsoft Copilot for Azure (preview) to identify problems and get information about your Azure Stack HCI clusters. When you ask Copilot for information about your edge infrastructure, it automatically pulls context when possible, based on the current conversation or based on the page you’re viewing in the Azure portal.

At VMware Explore EU, we announced the general availability of VMware vSphere capabilities enabled by Azure Arc. Customers can simplify the management of their VMware vSphere resources with the Azure Resource Manager functionality.

AI-enhanced management significantly elevates IT, enabling teams to discover new capabilities and new scenarios, so they can focus on strategic tasks and less on administrative chores. Copilot is your universal AI assistant that facilitates a streamlined and consistent set of functionalities for collaboration and is integrated seamlessly with the Azure portal and a variety of management tools.


The World Bank is one of the companies whose vast and distributed operations really called for a central and standardized approach. They are among the world’s largest sources of funding and financial knowledge for 189 developing countries. The World Bank employs a diverse workforce representing more than 170 countries in more than 130 locations. Recognizing an opportunity to improve efficiency and reduce costs, they were looking for a cloud-based solution that would offer centralized monitoring, performance, resource consumption, and security management—all in a single package. They chose Azure Arc to build their solution—in particular, because of their investment in SQL Server.

“We wanted to implement Azure Arc so we could utilize all the features and manage all our on-premises and cloud servers, including AWS, from one location,” Kala Macha explains. “With Azure Arc, we can manage everything at the operating system level and on the SQL Server side as well—all from a single pane of glass. It’s made a huge difference in our efficiency.”

Rapidly develop and scale applications across boundaries

We aim to break free from outdated system limitations and make it effortless for you to adopt advanced, flexible technologies. The ability to easily use your choice of cloud-native tools, containers, and other services will help accelerate digital transformation throughout your organization. With a standardized application model, with Kubernetes and Azure services, you can scale applications from the massive cloud platforms to on-site production without complex rewrites. A unified application deployment strategy, complemented by streamlined DevOps integration processes promotes collaboration and efficiency.

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Figure 3: Connect, manage, and operate Kubernetes from Azure

New applications are increasingly being packaged and distributed as container images, making Kubernetes clusters among the most popular Azure Arc-enabled resources. Today, you can use Azure Arc to connect Cloud Native Computing Foundation (CNCF) Kubernetes to Azure to be operated centrally and at scale. Azure Kubernetes Service (AKS) has been enabled by Azure Arc to provide options to run a managed Kubernetes solution at the edge, with built-in support for Linux and Windows containers.

At Ignite we announced more deployment options for AKS to run with significantly reduced overhead when creating clusters. Every AKS cluster provisioned through Azure Arc is automatically configured with the Kubernetes agents inside, enabling access to extensions like Microsoft Defender, Azure Monitor, GitOps, and others. You can easily provision and manage Kubernetes clusters in the Azure portal, directly from the Azure Kubernetes Services resource view, Azure CLI, or (ARM)/Bicep templates for automation. You can also provision AKS clusters from the Azure Stack HCI resource view, and in the future from third-party infrastructure that has been enabled using Azure Arc.

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Recently we spoke with one of our cutting-edge customers who’s driving innovation at scale, DICK’S Sporting Goods, a leading retailer with over 800 locations. DICK’S Sporting Goods is enhancing in-store experiences through apps—such as one that analyzes golf and baseball bat swings and recommends products best suited to each individual athlete. By integrating their stores with Azure, they can swiftly roll out new features built in the cloud to customers everywhere. Watch here to learn more.

“Our unified store strategy is all about rapid innovation. It lets us respond to market shifts and customer feedback in minutes, ensuring our stores are always current,” says Jon Hathaway, Sr Director – Platform and Infrastructure.

Cultivate data and insights across physical operations

Physical operations environments, like factories and retail storefronts, are the backbone of many businesses. Given the dispersed nature of these sites, customers are eager to deploy AI on a global basis to enable higher levels of productivity, efficiency, and sustainability. A unified data foundation cultivates data and insights across physical operations, driving more efficient workflows, predictive insights, and resource optimization.

For customers across industries, the ability to connect the physical world to the digital world is a foundational step in the digital transformation journey. To help them scale the transformation of their physical operations, we are announcing a new offering in public preview called Azure IoT Operations. Enabled by Azure Arc, Azure IoT Operations expands on our IoT portfolio with a composable set of services that help organizations onboard IT and OT assets, capture, evolve, and unify insights, and take actions to drive transformation at scale.

Azure IoT Operations empowers our customers with a unified, enterprise-wide technology architecture and data plane that supports repeatable solution deployment and comprehensive AI-enhanced decision-making. It enables a cloud-to-edge data plane with local data processing and analytics to transfer clean, useful data to hyperscale cloud services such as Microsoft Fabric, Azure Event Grid, and Azure Digital Twins. A common data foundation is essential to democratize data, enable cross-team collaboration, and accelerate decision-making.

One of the customers we are working with on their physical operations data strategy is Grupo Bimbo. Bimbo Bakeries USA (BBU), part of Grupo Bimbo a multinational food company with 217 plants in 34 countries globally. BBU takes pride in its product, zealously safeguarding high standards and quality. To turn out millions of loaves every day, they depend on metrics that illustrate everything from machine speeds and temperatures to downtime. Bimbo is always looking for innovative ways to produce the quality products their customers expect from them. 

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BBU is leveraging Azure IoT Operations to improve its current Industrial IoT (IIOT) solution and tackle the challenge of IT/OT convergence. Azure IoT Operations provides seamless data flow from process and equipment; everything from machine speeds and oven temperatures to equipment downtime. This new platform will enable robust data processing so that BBU can get visibility into near real-time production data that allows them to make timely adjustments, therefore maximizing production efficiencies.

The future is now

Customers can start applying the adaptive cloud approach to drive seamless transformation from cloud to edge today. Experience the latest offerings below and see them in action by visiting Azure Arc Jumpstart where you can learn and try many different scenarios.