For the organizations that want to take leverage of the characteristics of Azure Public Cloud, but they want to work on private, Azure Stack is for you! Azure Stack is an extension of Azure that you can deploy physically in your datacenter. In turn, this builds a hybrid environment, in which you can use the PaaS (Platform as a Service) and IaaS (Infrastructure as a Service) models on Azure Stack. You will experience consistency on management and administration for your services, meaning you can use the same deployment model (ARM), portal, templates, policies, permissions, and services integration between the Azure Public Cloud and Azure Stack.
Physical Unit
Azure Stack comprises a set of redundant power supplies, redundant high speed switches and a set of compute nodes depending on the client needs. There are multiple vendors approved that will be responsible for the hardware part and Microsoft is responsible for the software.

Once that you have your hybrid environment, you can decide where do you want deploy a specific resource.
If you are interested in learning more about Microsoft Azure or Azure Stack, visit our website at https://www.fastlaneus.com/microsoft-azure-training!
References:
https://docs.microsoft.com/en-us/azure-stack/operator/azure-stack-overview