Setting Up Azure Local: Complete Guide
Hyper-V / Microsoft

Setting Up Azure Local: Complete Guide

Welcome to the world of Azure Local!

Azure Local (the artist formerly known as “Azure Stack HCI”) lets you run VMs, containers and a handful of PaaS services on-prem while Azure Arc keeps everything in the same control plane. Think of it as cloud super-powers wrapped in a 2U pizza box – minus the pineapple. (learn.microsoft.com)

1. What You’ll Need Before You Even Think About Powering On

AreaKey checklist items
HardwareVendor-validated nodes (1 – 16), TPM 2.0, 32 GB ECC RAM min, 200 GB OS drive, ≥ 1 Gb mgmt NIC + 2 × 10/25/40 Gb for data (learn.microsoft.com)
NetworkManagement VLAN, (optionally) storage VLANs, routable DNS, outbound 443 to Azure, accurate NTP
Active DirectoryNew OU, unique hostnames, domain functional level 2016+ (learn.microsoft.com)
Azure sideSubscription owner, resource group, registered resource providers, RBAC roles (Azure Connected Machine Onboarding, etc.) (learn.microsoft.com)
Time~ 2 hrs for a single node, ~ 2.5 hrs for a 2-node cluster (excluding coffee) (learn.microsoft.com)

Pro tip: Do the prerequisites once in a build runbook; future clusters become copy-paste easy.

2. Stage 0 – Lay Down the Azure Local OS

  1. Download the ISO from the Azure portal (free 60-day trial if you need it).
  2. Boot each node and run the Install Azure Stack HCI wizard → Custom install → pick the blank drive.
  3. First boot asks for a new local admin password (12+ chars, upper/lower/number/special).
  4. Reboot happens twice – totally normal.
  5. Install vendor firmware/drivers; drop the Solution Builder Extension in C:\SBE if your OEM ships one. (learn.microsoft.com)

3. Stage 1 – Baseline Config with SConfig

Immediately after login, SConfig pops up automatically:

# Handy menu numbers
1) Domain/Workgroup  8) Network Settings
7) Remote Desktop    12) Reboot
  • Configure each NIC with the right VLAN/IP, gateway and DNS that points to your AD.
  • Set a valid NTP server: w32tm /config /manualpeerlist:"pool.ntp.org" /syncfromflags:manual /update
  • Rename the computer if you like, but do NOT join the domain yet. (learn.microsoft.com)

4. Stage 2 – Register Nodes with Azure Arc

On every node (run as local admin):

# 1. Log in & set context
Connect-AzAccount -SubscriptionId "<subId>" -TenantId "<tenantId>" -DeviceCode
$token = (Get-AzAccessToken).Token
$id    = (Get-AzContext).Account.Id

# 2. Kick off Arc bootstrap
Invoke-AzStackHciArcInitialization `
  -SubscriptionID "<subId>" `
  -ResourceGroup  "rg-azlocal" `
  -TenantID       "<tenantId>" `
  -Region         "westeurope" `
  -ArmAccessToken $token `
  -AccountID      $id

When the script finishes, each server shows up in Azure as Machine – Azure Arc. (learn.microsoft.com)

5. Stage 3 – Run the Azure Local Deployment Wizard

In the Azure portal → Azure Arc | Azure Local → Get started → Deploy:

  1. Select machines you just registered → Install extensions → Validate.
  2. Key Vault – create or reuse; secrets & BitLocker keys live here.
  3. Networking – choose an Intent template (e.g., “Mgmt + Compute” on two 25 Gb NICs, “Storage” on two RDMA NICs).
  4. Management – point to your AD domain, OU, and supply deployment + identical local admin creds.
  5. Security – pick Recommended unless you enjoy sleepless nights.
  6. Volumes – let the wizard create one infra + one thin workload volume per node (you can fine-tune later).
  7. Validation → Review + create → Create.

Grab another coffee; single-node finishes in ~ 90 min, two-node in ~ 150 min. (learn.microsoft.com)

6. Stage 4 – Post-Deployment TLC

TaskWhy / How
Verify ResourcesResource Group should show: 1 × Azure Local, 1 × Arc Resource Bridge, Key Vault, Custom Location, Storage accounts, plus one Machine resource per node. (learn.microsoft.com)
Enable Health AlertsTurn on capacity alerts when Storage Pool hits 70 %.
Enable RDP (if needed)Enter-PSSession <node>; Enable-ASRemoteDesktop – disable again when done. (learn.microsoft.com)
RBAC configurationAssign Azure Stack HCI Administrator / VM Contributor etc. to your ops team. (learn.microsoft.com)
Create extra volumes / VM imagesUse Arc-enabled VM or AKS-H commands once infra is green.

7. Keeping It Fresh – Updates & Upgrades

  • Monthly cumulative & semi-annual feature updates land via the Azure Update Manager; do not use SConfig, WAC or cluster-aware updating for the OS anymore. (learn.microsoft.com)
  • Stay within 6 months of the latest feature build; October 31 2025 is end-of-support for 23H2.
  • The orchestrator patches OS, Arc agents and (when your OEM participates) firmware in one go

8. Troubleshooting & “Oops” Recovery

  • Deployment failed? Hit Resume deployment in the portal; it’s idempotent.
  • Arc registration wrong tenant? Only fix is to re-image the node. (learn.microsoft.com)
  • Logs live under C:\ClusterStorage\Volume1\Logs on the resource bridge VM and are downloadable from the portal.

Wrapping Up

By following the four big stages—

  • OS install,
  • Baseline config,
  • Arc registration,
  • Portal deployment

You transform commodity servers into a fully Azure-managed edge cloud.

Happy hybrid hacking! 🛠️

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