SQL Server 2016 is the first "cloud first" release of SQL Server, as told to us by Remus Rusanu, former Microsoft SQL Server development team member. The features and enhancements in SQL Server 2016 have been running in the Azure SQL Database cloud for some time before they will be packaged up and released as the on-premise SQL Server product that most of us expect to work with.
There are a number of items about this worth discussing, but one stands out to me. The idea of using large numbers of feature flags and deploying code to the "cloud" for use by customers and internal Microsoft people is interesting. On one hand, it's really just a faster way of having beta software examined by users other than developers, with no install/uninstall/upgrade for users. Speed is good, but being on the bleeding edge and having systems break isn't necessarily what any of us want. However the use of these flags to turn features off quickly means that disruptions can be minimized for individual customers.
Some of the engineering process changes made to be cloud first were important for Microsoft to have one main branch of code for SQL Server. Having a separate branch for the cloud and on-premise versions had to be inefficient and problematic. However, that's not something we, as customers, care about. We just want the database platform to work, wherever we run may run it.
I do think that having features come out in Azure, whether private testing, public preview, or general availability is good. The people that can test these features give feedback quickly, and the rest of us aren't affected by the problem code. More importantly, the developers at Microsoft get the chance to learn more about how the features will be used and tune them before a very wide set of on-premise customers get code. Personally I was glad to see things like Row Level Security (RLS) appear in Azure first (Mar 2015), and come later to the on-premise version (SQL Server 2016).
I really expect in the future that almost every feature that is added to the SQL Server platform will be run in some form in Azure before it's released for on-premise use. In fact, I'd be surprised if features are added to the on-premise without 6-12 months of testing in the cloud. That's good, and I hope it leads to an increase in code quality for those of us that will run SQL Server on our own hardware.