I remember MS talking about this. At the time it was in the context of a private cloud shipping container, but this sounds more feasible.
Couple years back, Microsoft started talking about the “mystical” Azure Appliance and entire community thought they finally found the Holy Grail solution for running their services/applications securely on cloud. The idea was that Microsoft was to give all Windows Azure goodness in “one box” and enterprises can run their stuff from behind their fire walls using all awesome things that Azure provides. Azure Compliance never happened. Nobody knows why.
Meanwhile Scott Guthrie – The Rockstar performer – was asked to govern and own Windows Azure organization. Scott with his technical brilliance and roots being firmly buried into community completely shifted the momentum and Windows Azure became this cool, “open” technology. Scott Gu quickly realized the pulse and got no. of features onboarded one after another. One of the most important being a huge release they did called Infrastructure As Service (IaaS). Suddenly Microsoft was talking about the Cloud…
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All your cloud are belong to us 