Traditional cloud infrastructure isn’t enough to meet the increasing demands of modern businesses. Enterprises want more agility, scalability, and efficiency, which is difficult within the four walls of a traditional data center or a singular public cloud environment.
To modernize their IT operations, the trend of hybrid and multi-cloud solutions is becoming popular among enterprises. Hybrid cloud solutions offer business executives the best of both worlds: the scalability of public cloud platforms and security of private cloud infrastructure.
But there are several hybrid cloud solutions from different cloud managed services providers. Azure Arc and AWS Outposts are Microsoft and Amazon’s answers to the hybrid cloud challenge. These platforms promise consistent infrastructure, security, and development environments across diverse operating environments.
But how do they compare? In this article, we’ll compare the two biggest players in the hybrid cloud industry, their pros and cons, and which one is suitable for your needs.
What is a hybrid cloud?
Initially, hybrid cloud infrastructure just meant using at least one public and one private cloud environment. But today, managed cloud service providers define hybrid cloud as a cloud computing environment that combines private cloud infrastructure with public cloud services, ensuring full integration that allows data and applications to move between them.
Hybrid cloud solutions are useful when:
- Legacy platforms are still required for business operations
- Cloud migration is difficult due to any constraints
- Firms want to modernize their cloud infrastructure incrementally
What is a multi-cloud?
Multi-cloud infrastructure shares many similarities with hybrid cloud solutions, but they are not the same. Multi-cloud refers to the use of two or more public cloud services from different vendors without necessarily connecting them to on-prem infrastructure.
The primary reasons why business opt for multi-cloud solutions include:
- Using unique features of different public cloud providers like Azure, AWS, and Google Cloud
- Avoiding vendor lock-in and maintaining balance
- Adopting a platform-agnostic approach and optimizing costs
What is Azure Arc?
Azure Arc is Microsoft’s hybrid and multi-cloud management platform designed to extend Azure’s management and services to any infrastructure, whether on-premises, in other public clouds, or at the edge. Azure Arc provides hybrid and multi-cloud abilities even if those environments aren’t running on Azure.
Key features of Azure Arc
- Management Anywhere: Connects and manages servers, Kubernetes clusters, and databases outside of Azure using a single control plane.
- Azure Services On-Premises: Bring Azure services like Azure SQL Managed Instance and Azure App Services to on-prem environments.
- Unified Governance: Uses Azure Policy, Azure Monitor, and Defender for Cloud across all connected resources.
- Kubernetes-Native: Integrates well with GitOps, DevOps pipelines, and CNCF-compliant Kubernetes clusters.
Pros
- Cloud-agnostic (supports AWS, Google Cloud, and on-prem)
- Seamless integration with Azure tools
- Strong developer and CI/CD ecosystem
- Great for complex, multi-cloud environments
Cons
- Requires deep Azure knowledge for optimal use
- Performance may depend on connected infrastructure and configuration
What is AWS Outposts?
AWS Outposts is Amazon’s fully managed infrastructure offering that extends AWS cloud services, APIs, and tools to on-premises locations. Outposts delivers a physical rack of AWS hardware to your data center, preconfigured to run AWS services locally, making it highly relevant for professionals pursuing a DevOps course.
Key features of AWS Outposts
- Consistent AWS Environment: Same AWS EC2, EBS, ECS, and RDS services available on-prem
- Fully Managed Hardware: Amazon installs and maintains the infrastructure
- Integrated Security and Monitoring: Works with AWS Identity & Access Management, CloudWatch, and other services
Pros
- Seamless AWS experience on-premises
- Tight integration with AWS services and tools
- Ideal for low-latency, data residency, or regulatory workloads
- Fully managed hardware eliminates operational overhead
Cons
- Expensive and limited to the AWS ecosystem
- Less flexibility for multi-cloud strategies
- Requires physical space and installation
AWS Outposts vs Azure Arc: Head-to-head comparison
AWS Outposts vs Azure Arc bring cloud solutions closer to where the data lives. But they both take different approaches to how they get there.
Azure Arc doesn’t require new servers or branded racks. Instead, it extends Azure’s management, policy, and security layer across any environment, including on-prem, edge, or even competitor clouds like AWS and GCP.
On the other hand, AWS Outposts delivers physical AWS-branded hardware directly to your location, which is preloaded with EC2, EBS, RDS, and more. It looks like AWS, feels like AWS, and most importantly, runs exactly like AWS, except it’s sitting in your on-prem data center.
The core difference between the two approaches is what they extend and how they do it. Azure Arc turns your existing infrastructure into something manageable through Azure, while Outposts brings physical AWS hardware to your location.
Here is a comparison table showing core features of both:
| Feature | Azure Arc | AWS Outposts |
| Approach | Software-based control plane | Hardware-based deployment |
| Deployment Model | Runs on existing infrastructure | Requires AWS-managed physical servers |
| Multi-Cloud Support | Yes (Azure, AWS, GCP, on-prem) | No (AWS-only) |
| Services Available | Azure SQL, App Services, AKS, Functions, etc. | EC2, ECS, EBS, RDS, EKS (limited subset on-prem) |
| Latency Optimization | Moderate (depends on setup) | Excellent (local compute) |
| Edge Capabilities | Arc-enabled Kubernetes + Azure Stack Edge | AWS Local Zones, Wavelength, Outposts |
| Target Audience | Enterprises with hybrid/multi-cloud needs | Enterprises tied deeply to AWS |
| Cost Structure | Pay-as-you-go for services + existing hardware | Subscription/contract for hardware and services |
| Operational Model | You manage the infrastructure | AWS manages everything (hardware + updates) |
Use case scenarios
Choosing when to use AWS Outposts or Azure Arc depends on your use case. The strengths and weaknesses of both make them suitable for different kinds of cloud workloads.
Choose Azure Arc if you
- Operate in a multi-cloud environment
- Want to modernize legacy infrastructure without moving everything to the cloud
- Need Kubernetes-native tooling with GitOps
- Require governance and security across diverse platforms
Choose AWS Outposts if you
- Are an AWS-first organization
- Need real-time processing with low latency
- Have strict data residency or regulatory requirements
- Want a hands-off approach to infrastructure management
What’s next in hybrid cloud?
Who’s winning the hybrid cloud war? It depends on how you define “winning.”
- Market penetration: AWS leads in overall cloud market share, but Microsoft has gained significant traction in hybrid and enterprise sectors.
- Flexibility: Azure Arc’s software-based, cloud-agnostic model makes it better suited for multi-cloud strategies and hybrid governance.
- Performance and simplicity: AWS Outposts wins when low latency, tight AWS integration, and fully managed infrastructure are priorities.
Gartner ranks Microsoft ahead of AWS in hybrid cloud capabilities as of 2024, largely due to Azure Arc’s flexibility and ecosystem.
Both Microsoft and AWS are also heavily investing in:
- AI-powered management and observability tools
- Edge computing capabilities
- Integration with 5G and IoT
- Industry-specific hybrid solutions (finance, healthcare, manufacturing)
Final thoughts
Azure Arc and AWS Outposts represent two fundamentally different approaches to solving the same challenge. They bridge the gap between cloud innovation and on-premises realities.
AWS Outposts vs Azure Arc aren’t direct replacements for each other—they’re purpose-built tools that solve different problems. If you want flexible control and governance across diverse environments, Azure Arc is leading. But if you’re committed to AWS and need hybrid infrastructure that works out-of-the-box, AWS Outposts is winning your corner of the war.
Choosing the right platform comes down to how your organization prioritizes flexibility, integration, governance, and latency. There’s no universal winner; only the right fit for your operational needs.
Partner with Xavor’s cloud managed services to navigate the complexities of hybrid cloud computing. Our cloud experts are certified across both Azure and AWS stacks. We simplify the journey to architect your cloud infrastructure that works across workloads and boundaries.
Contact us at [email protected] for a free consultation session.
