The necessary starting point is to understand the balance of forces in the South Caucasus has shifted dramatically in the last decade or two. With Azerbaijan now having the upper hand it was always inevitable the country would attempt to rectify the Armenian occupation of Karabakh and the provinces surrounding it. As I argued in Dawn of Eurasia:
After a successful military campaign, Azerbaijan was in a good position to move from Shusha to Stepanakert and take control over the whole of Karabakh. That move, however, carried a number of risks. It would humiliate Russia even more than it had already been humiliated by a war in which it was never consulted. It could result in further casualties for the Azeri forces. It could result in heavy civilian casualties in Karabakh, with very dangerous and unpredictable consequences for Azerbaijan’s international standing.
With the peace agreement shepherded by Russia, Azerbaijan gets everything it could hope from a military campaign, and more. Most important, Armenian troops are scheduled to leave not only the areas surrounding Karabakh but, rather dramatically, Karabakh itself. Azerbaijanis all over the world are celebrating that no part of their territory is under occupation. That aspiration once seemed beyond their wildest dreams. It has been realized. A corridor connecting the mainland to the Nakhchivan enclave is a bonus, something that could not be acquired in the military campaign. The important element here is that the strategic town of Shusha has been taken and will remain under Azerbaijani military control.
The main consequence of the war is the dramatic reduction of Russia's prestige in the region. Think about it this way: frozen conflicts in its periphery were once supposed to entrench Russian power. If a country depended on Russia to resolve a conflict within its borders, it could never develop a fully sovereign foreign policy. Azerbaijan has broken free of those chains. More: it changed the facts on the ground in its favour and then called on Russian troops to secure the outcome! And those Russian troops will have to share the stage with Turkey. I hear from some commentators that Russia managed to send troops to Karabakh. Well, it could have done so at any time in the last twenty years. It just preferred to have them on the Nato borders around Gyumri than on some isolated crags dealing with disgruntled locals!
No wonder that a number of Russian foreign policy columnists are speaking of an unprecedented defeat, reducing Russian power in the region to levels not seen for two centuries or more.