Azure Virtual Network (VNet)
By Pooja | 19th July 2025
Introduction
As cloud computing continues to dominate IT infrastructure, managing secure, scalable, and isolated network environments has become more critical than ever. Microsoft Azure’s Virtual Network (VNet) is the cornerstone for networking in Azure, providing the backbone for deploying services in a secure and organized manner.
Azure VNet allows users to build private networks in the cloud that behave much like traditional on-premises networks, but with all the scalability, high availability, and automation advantages of the cloud.
This article explores Azure Virtual Network in depth—explaining what it is, how it works, and how to use it to build secure, high-performance cloud architectures.
What is an Azure Virtual Network (VNet)?
An Azure Virtual Network (VNet) is the fundamental building block for private networking in Azure. It provides an isolated, logically defined network environment where you can securely deploy Azure resources such as virtual machines (VMs), databases, containers, and web apps.
Similar to traditional networks you would find in an on-premises environment, a VNet includes subnets, IP addresses, routing, DNS, and network security controls. However, since it is a cloud-native construct, it is highly scalable, programmable, and integrated with Azure services.
Key Concepts and Components
Let’s understand the main elements that make up a VNet:
- Address Space
The IP address range that your VNet will use. Defined in CIDR (Classless Inter-Domain Routing) notation, e.g., 10.0.0.0/16.
- Subnets
Logical subdivisions of the VNet. Each subnet gets its own CIDR block and can host different Azure resources.
- Network Interface (NIC)
Each VM or compute instance uses a NIC to connect to the VNet.
- Route Table
Defines the path that network traffic should follow, allowing custom routes within and outside the VNet.
- Network Security Group (NSG)
Acts like a firewall to allow or deny traffic based on rules.
- DNS Settings
Default Azure DNS or custom DNS servers can be used for name resolution.
Why Use Azure Virtual Network?
Azure VNet brings the following advantages:
- Isolation: Provides a fully isolated network space
- Security: Use NSGs, service endpoints, and private links
- Scalability: Can expand across regions and integrate with other VNets
- Hybrid Capabilities: Connect on-premises networks using VPN or ExpressRoute
- Custom Routing: Define user-controlled routes to direct traffic
- Integration with Azure Services: Such as App Service, SQL, AKS, etc.
In short, VNet helps you control traffic flow, secure workloads, and connect across environments.
Address Space and Subnets
Address Space and Subnets
Network Security in VNet
Network Security Groups (NSGs)
NSGs contain inbound and outbound rules that filter traffic by:
- Source and destination IP
- Port
- Protocol (TCP/UDP)
Example:
- Allow TCP 80 from Internet
- Deny all inbound traffic to DBSubnet
Application Security Groups (ASGs)
ASGs allow you to group VMs by role and apply security rules across those groups.
Firewall and DDoS Protection
- Azure Firewall offers centralized logging and filtering
- Azure DDoS Protection defends against volumetric attacks
More Deep into the Azure Network Security Group
Virtual Network Peering
VNet Peering connects two VNets so resources can communicate as if they were on the same network.
Benefits:
- Low-latency, high-bandwidth connectivity
- No need for gateways
- Can peer across regions (Global VNet Peering)
Example use case: Peer a VNet in East US to another in West Europe to allow data replication between services.
Integration with On-Premises Networks
Azure VNet allows seamless hybrid networking with on-premises environments using:
VPN Gateway
- Site-to-Site VPN
- Point-to-Site VPN (for individual clients)
Azure ExpressRoute
- Dedicated private connection via a third-party provider
- Better performance, reliability, and SLA
- Ideal for enterprises and sensitive workloads
Routing in Azure VNet
Azure automatically creates System Routes, but you can override them using:
User Defined Routes (UDR)
Define custom routes for traffic redirection (e.g., force all traffic through a firewall).
Border Gateway Protocol (BGP)
Used with ExpressRoute to dynamically exchange routing information with on-premises.
Service Endpoints and Private Link
Service Endpoints
Allow secure access to Azure services over the VNet. Example:
- Securely connect to Azure Storage from within VNet
Private Link
Provides private IP-based access to services like:
- Azure SQL Database
- Azure Blob Storage
- Partner services
Private Link is more secure and granular than service endpoints, and is preferred for high-security environments.
Integration with Azure Services
Azure VNet integrates with:
- App Service Environments (ASE)
- Azure Kubernetes Service (AKS)
- Azure Bastion (RDP/SSH without public IP)
- Azure Virtual Desktop (AVD)
- Azure Load Balancer and Application Gateway
Many Azure services can now be deployed into VNets, ensuring complete network isolation and control.
VNet Best Practices
- Design IP ranges carefully to avoid overlap (especially for hybrid connections)
- Use NSGs and ASGs to control traffic flow and reduce exposure
- Segment networks using subnets by workload
- Monitor network traffic using Azure Network Watcher
- Use private endpoints instead of public IPs where possible
- Apply tags for cost management and visibility
- Regularly review and audit NSG rules
Pricing Overview
Azure VNet itself is free. You only pay for:
- Outbound data transfer (egress)
- VPN Gateway or ExpressRoute usage
- Services like Firewall, Private Link, or Bastion
Real-world Use Cases
- Enterprise Cloud Migration: Recreate on-prem network architectures in Azure
- Multi-tier Web Applications: Separate subnets for web, app, and data layers
- Hybrid Environments: VPN or ExpressRoute to connect corporate networks
- Data Protection and Compliance: Restrict access using Private Link
- Dev/Test Isolation: Use peered VNets for isolated developer environments
Conclusion
Azure Virtual Network (VNet) is a foundational service that enables you to run your applications in a secure, isolated, and well-organized network environment within Azure. With support for custom IP addressing, subnetting, routing, hybrid connectivity, security controls, and deep integration with other Azure services, VNets give you the tools to build complex, enterprise-grade architectures in the cloud.
As businesses move more critical workloads to Azure, understanding and designing your VNet properly is essential for performance, security, and scalability. From hosting simple websites to deploying mission-critical distributed systems, Azure VNet empowers you to control and extend your network to the cloud with confidence.