Part of the big news out of Microsoft (MSFT) this week was the launch of an Azure-based private cloud appliance designed to enabler customers’ hybrid IT environments. Company executives unveiled the Cloud Platform System Oct, 20, as well as several other important elements to the growing Microsoft cloud portfolio.

It’s another big step for Microsoft in the hybrid cloud space. Although the Cloud Platform System is being described as a private cloud-in-a-box solution based on Azure APIs, the real story is in how the appliance fits into hybrid IT and could further Microsoft’s cloud agenda in both the private and public cloud spaces.

The new private cloud-in-a-box was unveiled by CEO Satya Nadella and Scott Guthrie, Microsoft’s executive vice president of Cloud and Enterprise. Jason Zander, corporate vice president of Microsoft Azure, provided a few more details and comments about the announcements, including Cloud Platform System,in a blog post.

“CPS is an Azure-consistent ‘cloud-in-a-box’ that takes our learnings from running Azure in the public cloud and builds that into a pre-integrated solution with hardware from Dell and software from Microsoft so that you and your partners can get many of Azure benefits in your datacenter, on your terms,” Zander wrote.

Guthrie added in his own blog post: “The Microsoft Cloud Platform System, powered by Dell, is the next step in hybrid cloud and brings all our learnings running Azure to your data center.”

The launch of Cloud Platform System could be critical to Microsoft’s positioning in the private/hybrid cloud market.

“Microsoft CPS is exactly the sort of solution Microsoft needs to effectively bring Azure into the private/hybrid marketplace,” Charles King, principal analyst at Pund-IT, told Talkin’ Cloud. “The fact is that the company’s positioning of Azure focused too much on public cloud applications which, I believe, made it less relevant as organizations firmly shifted their sights to deploying private and hybrid cloud environments.”

King added that since the solution is being developed and delivered by Dell, which has strong ties to the business markets and customers Microsoft is targeting, the perceived value of Cloud Platform System is even greater.

“Dell’s clear focus on both technical performance and customer experience will also help set CPS apart from other pre-integrated cloud solutions,” King said.