Azure Partner Update — December 2025 & January 2026

What CSP Indirect Resellers Need to Know

As we stepped into the final months of 2025 and the start of 2026, Microsoft delivered a steady stream of Azure enhancements, previews, and announcements that matter to partners scaling cloud engagements. These updates span AI integration, security features, platform capabilities, marketplace offers and regional availability, and they directly influence how you position Azure solutions with your customers.

Below we unpack the most important developments from December 2025 and January 2026—with guidance on what matters for reseller partners.

1. Azure Copilot & Intelligent Cloud Automation (Private Preview)

One of the major narratives from late 2025 was the arrival of Azure Copilot in private preview. Designed to embed agent-driven automation directly into the Azure portal, PowerShell, and CLI workflows, Azure Copilot helps simplify cloud operations with intelligent assistance.

Key capabilities include:

• AI-driven guidance tailored to migration, assessment, and modernization tasks.
• Workflow automation that supports governance and compliance best practices.
• Integrated insights that can reduce effort and operational overhead.

Why it matters for CSP partners:

• This is a value-add conversation starter with customers evaluating cloud modernization.
• Azure Copilot can accelerate migrations and cut down on manual effort—making Azure more compelling vs competitors.
• Early access or demos can help partners build offerings that include intelligence-powered automation.

2. Microsoft Foundry & Expanded AI Models

Another highlight from December was the evolution of Microsoft Foundry, the AI development and orchestration platform within Azure.

What's new:

• Anthropic Claude models are now supported inside Microsoft Foundry, increasing the choice of AI engines for advanced reasoning and workflow automation.
• Foundry Control Plane and Foundry IQ entered public preview, offering unified governance and knowledge automation layers across agent networks.

Partner implications:

• Partners building AI solutions (custom agents, intelligent apps) now have more flexibility and governance capabilities, reducing risk for enterprise customers.
• For resellers specializing in data and AI services, this broadens the set of tools for proof-of-concepts and customer accelerators.

3. Azure Marketplace Resale Offers Expand

A strategic commercial update in December is that resale-enabled offers are now available in nearly all supported Marketplace regions.

What this means for CSP Indirect Resellers:

• You can now resell third-party applications and services as part of your customer solutions—even when you didn’t build them yourself.
• This opens a new revenue line and helps expand service portfolios without heavy development overhead.
• Cross-sell/multi-sell motions with SaaS and Azure integrated solutions are now easier.

Practical partner action:

• Evaluate key ISV solutions in the Marketplace and include them in packaged offers.
• Train your sales teams on resale procedures and co-sell incentives.

4. Azure Virtual Desktop (AVD) & Networking Changes

While not an official Azure update page entry per se, community and partner content highlighted some important technical developments affecting Azure Virtual Desktop and networking behavior:

Outbound Connectivity Change

• Default outbound access on Azure VNets is now being retired—extended to March 31, 2026—requiring explicit NAT Gateways or other configurations.

Why this matters:

• Customers leveraging Azure Virtual Desktop or Batch without NAT or explicit outbound connectivity may experience failures once the retirement hits.
• CSP partners should review and advise customers ahead of changes.

AVD Improvements

• December focused on stability enhancements to session reliability, quicker workspace operations, and better identity-driven access.

Action for partners:

• Communicate to customers the need to assess their networking configurations ahead of the retirement date.
• Highlight AVD readiness improvements, positioning AVD as a robust desktop cloud platform.

5. Storage and Data Services Enhancements

The tail end of 2025 brought updates impacting Azure storage and data operations:

Azure Blob Migration Preview

• A public preview for Azure Storage Mover now adds simpler blob-to-blob container migration across accounts/regions.

Why partners should care:

• Simplifies large-scale data migrations—especially pertinent for customers modernizing from on-prem or other clouds.
• Position this capability as part of migration planning engagements.

Zonal Support & Placement for Azure Files

• Zonal placement for Azure Files Premium LRS is now generally available in select regions—improving resilience and alignment with architecture requirements.

Opportunity:

• Use this to advise customers on resilient file share strategies and cross-region continuity planning.

6. Security & Governance Features in Azure Data Services

January 2026 kicked off with important security updates and new capabilities:

Dynamic Data Masking for Cosmos DB

• Now in public preview, this policy-based capability masks sensitive fields at query time using identity context.

Why it’s important:

• Helps customers with compliance, data privacy, and least-privilege access models.
• A security talking point for customers in regulated industries.

Auditing for Fabric SQL Databases

• Auditing support is now available, letting organizations log activity and monitor data access.

Partner use case:

• Audit and compliance assessments can now include these built-in capabilities, saving custom tooling.

7. Microsoft Entra Internet Access for Government Community Cloud (GCC)

From a broader partner ecosystem update, Microsoft Entra Internet Access for GCC will be transactable starting January 1, 2026.

What partners should know:

• Federal-focused customers or GCC-aligned entities can now procure this service through CSP channels starting January.
• This expands identity and access networking options for government customers.

8. Partner-Focused Programs & Forums

Azure Arc Server Forum

Microsoft announced the continuing monthly Azure Arc Server Forum starting January 2026, offering demos, Q&A and roadmap sessions for hybrid management.

Why enable this for your teams:

• A great platform for technical practitioners in your organization to stay sharp on hybrid trends and capabilities.
• Helps position your hybrid solutions with current best practices.

9. Patch & Platform Stability (Supporting Updates)

Though not strictly Azure product announcements, partners should note impactful platform updates from the ecosystem that affect cloud workloads as well:

• Windows update patterns and cumulative patch changes—including naming schema changes in late 2025—affect on-prem and hybrid environments connected to Azure Update Manager.
• Community signals indicated a recent Windows update (KB5074109) introduced issues launching AVD sessions on Windows 11 devices.

Actionable guidance:

• Advise customer admin teams to monitor patch impacts on critical services like AVD, and coordinate testing/rollbacks where needed.

10. How Partners Can Capitalize on These Updates

Here’s a quick checklist you can use immediately:

Strategic Enablement

• Train sales and technical teams on Azure Copilot and Foundry tools to build intelligent cloud offerings.
• Update solution briefs to include Storage Mover and outbound connectivity planning changes.

Customer Outreach

• Proactively alert customers to networking changes (default outbound retirement).
• Offer migration assessments that leverage new Blob migration previews.

Marketplace Growth

• Identify high-value resale offers and bundle them with your core services.

Security & Compliance Conversations

• Use the new data masking and auditing features to up-sell customers in regulated industries.

Continuous Learning

• Register technical teams for Azure Arc Server Forums and partner AI readiness sessions to stay ahead of the curve.

Closing Thoughts

Microsoft continues to push Azure forward across AI, security, governance, storage, and partner-enabled commerce. December 2025 and January 2026 updates reflect a trend toward intelligent automation, simplified management, and expanded partner opportunities.

For CSP Indirect Resellers, these changes don’t just improve Azure—they expand your toolkit for customer conversations, packaged services, and technical differentiation. Reach out to us at This email address is being protected from spambots. You need JavaScript enabled to view it. to discuss the impact and opportunity brought by these key updates.