LinkedIn has set aside an effort to relocate its data center technology out of its physical facilities and into Microsoft’s Azure cloud, according to people familiar with the matter.

The decision not to proceed with the project, code-named “Blueshift,” marks a major reversal for LinkedIn, which announced its plan to move to Azure in 2019, three years after Microsoft acquired the company for $27 billion. LinkedIn had been using Azure for specific tasks.

The U-turn represents a setback for Microsoft, which is chasing Amazon Web Services in the lucrative cloud infrastructure market and has been counting on cloud technology and services to fuel much of its growth. Microsoft CEO Satya Nadella ran the cloud business before elevation to his current job in 2014.

Mohak Shroff, LinkedIn’s vice president of engineering, wrote in a 2019 blog post announcing Blueshift that “moving to Azure will give us access to a wide array of hardware and software innovations, and unprecedented global scale.”

Staffers started to learn of the decision not to follow through with the Azure migration last year, said the sources, who asked not to be named because of confidentiality. Executives stressed that the project was being put on hold, rather than getting canceled altogether, they said.

In a memo to research and development employees in June 2022, LinkedIn Chief Technology Officer Raghu Hiremagalur said LinkedIn would continue to use some Azure services and will “focus our efforts on scaling and innovating our on-prem infrastructure.” A different internal document, viewed by CNBC, says LinkedIn and Microsoft together agreed to hold off on trying to get LinkedIn’s website running on Azure.

“With the incredible demand Azure is seeing and the growth of our platform, we’ve decided to pause our planned migration of LinkedIn to allocate resources to external Azure customers,” Hiremagalur wrote in his memo.

A LinkedIn spokesperson confirmed that the Microsoft subsidiary changed direction on Blueshift and said LinkedIn continues to use Azure.

“We are using both Azure to complement our infrastructure needs and further investing in our data centers,” the spokesperson said in an email. “This includes our running 100 employee-facing applications on Azure, leveraging Azure FrontDoor and ongoing work to consolidate our datacenter locations that are currently spread across multiple buildings under a single roof. Azure has been crucial to support and scale collaboration and productivity for our teams and to deliver value to our members.”

Azure Front Door is a content delivery network that keeps information stored in a variety of places around the world so it can quickly be sent to devices.

Issues with the planned migration arose from LinkedIn attempting to use its own software tools instead of those readily available on Azure, one of the people said. LinkedIn is in the process of constructing an additional data center to handle its computing needs, the person said.

Under the leadership of Nadella, Microsoft has moved some of its acquired assets to Azure, including GitHub and Minecraft developer Mojang.

More recently, Azure has gained attention because of Microsoft’s investment in OpenAI, which uses Azure infrastructure for running the large language models powering ChatGPT and other products. Nadella told Wired that he first saw the GPT-4 LLM from OpenAI in the summer of 2022, a few months before OpenAI released the ChatGPT chatbot.

Microsoft said in October that third-quarter revenue from Azure and other cloud services grew 29%, while LinkedIn revenue was up 8%. LinkedIn said in November that it had reached 1 billion members.