Microsoft Corp. today made good on its promise to release a version of its Azure Stack on-premises cloud platform for U.S. government agencies.

The initial release of the hardware/software combination stack gives Microsoft an opening into the on-premises government cloud market. That may give it more of a chance at winning some of the highly lucrative contracts U.S. agencies like to hand out.

The Azure Stack is an on-premises version of Microsoft’s Azure public cloud infrastructure. It was announced back in May 2015 before finally being released in September last year. It bundles the company’s cloud software with integrated hardware systems from companies such as Dell EMC and Hewlett-Packard Enterprise Co., and allows organizations to run a smaller version of the Azure cloud from inside their own data centers.

The government version of Azure Stack helps to address the tough regulatory, connectivity and latency requirements that government agencies must adhere to, Microsoft’s Natalia Mackevicius wrote in a blog post. It’s being offered to existing Azure Government customers, and will provide them with the ability to add local cloud installations alongside their existing public cloud deployments, the executive added.

When it announced Azure Stack for Azure Government, Microsoft touted use cases such as field offices for government embassies, where officials cannot take the risk of sending sensitive data over possibly tapped internet connections.

“Azure Stack extends the best of our intelligent edge and cloud innovation and delivers those services anywhere in the environment through a hybrid approach,” Mackevicius said.

Analyst Holger Mueller of Constellation Research Inc. said Azure stack is “an important piece of Microsoft’s Azure strategy, especially as data localization is more important to governments than most enterprises. It will be interesting to see what kinds of next-generation applications its government customer will be able to build.”

Microsoft has been pushing its Azure Government offering hard in recent months in order to compete with rivals such as Amazon Web Services Inc. Last May, Microsoft Azure was granted clearance to provide cloud services to 17 different U.S. intelligence agencies.

One of the lucrative contracts Microsoft is keen to land is the $10 billion Joint Enterprise Defense Infrastructure program, which is currently being tendered by the U.S. Department of Defense.

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