Mastering Azure Application Security with Terraform: A Step-by-Step Guide

The world of Azure application security isn’t just about spinning up services—it’s about building a tightly secured, well-orchestrated network infrastructure. One must think of it as constructing a high-security building: every room (or subnet) has a purpose, every door (or endpoint) has a key, and there’s a comprehensive plan to keep unwanted visitors out. In this deep dive, we’ll explore how Terraform can be used to secure your application network in Azure, with a focus on subnets, service delegation, private endpoints, and Azure Private Link. Let’s break it all down.

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A Blueprint for Securing Your App​

Azure’s recommended approach to application security emphasizes network segmentation by placing apps into dedicated subnets. By isolating different services, you ensure that only the right entities communicate with one another. Imagine an office where sensitive departments are sequestered behind secure doors; that’s the idea behind subnetting in a Virtual Network (VNet).
Key principles include:
• Segregating applications into different subnets
• Enabling controlled communication via private endpoints
• Applying automatic routing and security policies using subnet delegation
Azure’s strategy is not unique—many industries apply the “defense in depth” principle—but Azure’s integrated tools like service delegations and Private Link give it a distinct edge.

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Terraform Code Walkthrough: From Storage to Service​

If you’ve just deployed your app to Azure, the next critical question is: Who can access it? Bob Code’s example shows you how to define your entire network architecture using Terraform. Here’s how it unfolds:

1. Setting Up Core Resources
   The journey starts with creating shared resources such as a storage account and a service plan. These are essential for running your function apps.
   • Resource "azurerm_storage_account" – sets up a secure storage foundation.
   • Resource "azurerm_service_plan" – provisions a service plan configured for Windows.
2. Deploying the App Services
   Two Azure Function Apps are then deployed, each attached to a specific subnet. In the sample, they’re named “dns-app1” and “dns-app2.” Notice the usage of parameters like:
   • Virtual network subnet IDs to assign them to their desired subnets
   • App settings optimized for both performance and security
3. Configuring the VNet and Subnets
   A Virtual Network (VNet) is defined with an address space covering 10.0.0.0/16. Within this VNet, separate subnets are created for each function app. Initially, each app is placed in its own subnet (for example, “10.0.1.0/24” for subnet1).
   At this point, you might encounter an error warning that the subnet is “missing a delegation.” That’s because Azure requires that a subnet hosting certain resources must be explicitly delegated to those services.
4. Introducing Subnet Delegation
   Subnet delegation automates critical networking functions:
   • IP Allocation – ensuring that IP addresses are assigned and reserved properly
   • Routing Management – automating traffic flow through Azure’s robust routing engine
   • Conflict Prevention – enforcing rules specific to the delegated service
   In the updated Terraform code, a delegation block is added to each subnet with a configuration similar to:
   resource "azurerm_subnet" "subnet1" {
     name = "subnet1"
     …
     delegation {
      name = "delegation"
      service_delegation {
       name = "Microsoft.Web/serverFarms"
       actions = [
        "Microsoft.Network/virtualNetworks/subnets/join/action",
        "Microsoft.Network/virtualNetworks/subnets/prepareNetworkPolicies/action"
       ]
      }
     }
   }
   This ensures that your function apps integrate seamlessly with their assigned subnets. Without delegation, Azure cannot automatically apply necessary network policies.

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Private Endpoints: The Gateway to Internal Connectivity​

After conquering subnet delegation, the next hurdle is connectivity between isolated services. Private endpoints address this challenge by providing a private IP address within your VNet for accessing Azure services.

Understanding Private Endpoints​

Think of a private endpoint as a secured, custom-made door with a built-in security interface (NIC). It allows your services, such as function apps or databases, to communicate over the secure Azure backbone. However, there’s a catch: if you try to attach a private endpoint to the same subnet that’s already delegated (for instance, a subnet reserved for Microsoft.Web/serverFarms), you’ll hit a roadblock.
An example error message might resemble:
"PrivateEndpointCreationNotAllowedAsSubnetIsDelegated…"
This informs you that the subnet’s exclusive delegation prevents private endpoints from coexisting in the same space.

The Solution: A Dedicated Subnet for Private Endpoints​

Azure recommends isolating private endpoints into a unique subnet. By doing so, you avoid conflict with service-delegated subnets. In the Terraform configuration, a new subnet—say, “subnet3” with an address prefix like “10.0.3.0/24”—is introduced. Then, private endpoints for the apps are deployed on this dedicated subnet:
resource "azurerm_private_endpoint" "app1_pe" {
  name = "app1-pe"
  …
  subnet_id = azurerm_subnet.subnet3.id
}
This separation ensures that the private endpoints function correctly while still allowing secure, private communication via Azure Private Link.

What is Azure Private Link?​

Azure Private Link deepens the concept of private connectivity. It creates a secure bridge between the private endpoint and the target service (in this case, your function apps). The request is forwarded over the Azure backbone network, ensuring that internal traffic remains private and shielded from public exposure.
Imagine your complex network as a bustling city. Subnet delegation assigns districts for specific services, while private endpoints and Private Link act as guarded passageways connecting these districts. This design maintains not only order but also robust security throughout the entire network.

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Beyond Connectivity: Integrating DNS and NSGs​

While the code sample focuses heavily on subnets and private endpoints, a comprehensive network security strategy in Azure must also embrace DNS and Network Security Groups (NSGs).

Private DNS Zones and A Records​

When you set up private endpoints, you’re often required to configure DNS settings to resolve names to private IP addresses. In many advanced architectures, you’d create a private DNS zone and A records to ensure that internal services use the correct IP mappings. This setup makes your environment not only secure but also seamlessly accessible through familiar domain names.

Network Security Groups (NSGs)​

NSGs are like security checkpoints—filters that control inbound and outbound traffic to your subnets. Although not detailed in the snippet, applying NSGs is a best practice. By associating NSGs with your subnets, you can:
• Explicitly allow or block traffic from specific sources
• Define granular rules tailored to your service needs
• Monitor and log network activities for enhanced troubleshooting
Integrating NSGs with your Azure architecture bolsters your defense, ensuring that each communication path is continuously monitored and regulated.

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Wrapping Up: Best Practices and Next Steps​

Securing your application network in Azure is a multi-faceted challenge that requires thoughtful planning and precise execution. Here are the key takeaways:
• Segregate your application components using VNets and dedicated subnets.
• Apply subnet delegation to automate critical policies and infrastructure management for Azure services.
• Isolate private endpoints into their own subnet to harness the benefits of Azure Private Link without conflict.
• Extend your security posture with DNS zoning and Network Security Groups for granular control over network traffic.
In a world full of complex cyber threats, these practices ensure that your infrastructure is not just functional but resilient against intrusions. With Terraform as your infrastructure-as-code tool, you gain the repeatability and transparency necessary to audit and optimize your network security.
So, whether you’re managing a sprawling hybrid cloud environment or deploying a single, mission-critical app, remember this: it pays to plan your network like a fortress. After all, in the digital age, the strength of your walls can make all the difference between a secure app and an open invitation to cyber threats.
Feel free to share your tweaks, alternatives, or any improvements you discover along the way. Happy coding—and here’s to building an impervious Azure fortress!

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This in-depth exploration should empower you with the best practices for segregating and securing your Azure applications using Terraform. By embracing these guidelines, you’re well on your way to mastering application network security in Microsoft’s cloud ecosystem.

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Source: Medium