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How Does an Azure Virtual Network Work? Everything You Need to Know

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15th Jun, 2023
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How Does an Azure Virtual Network Work? Everything You Need to Know

Having trouble with understanding virtual networks? Then this guide is a must-read for you. 

In this article, we’ll be discussing what virtual networks are, how they function, and what is Azure virtual network. You’ll also learn how you can set up your virtual network in Azure. 

The Azure Virtual Network (VNet) is a critical Microsoft Azure component that allows customers to establish and administer virtual private networks inside the Azure cloud architecture. This article seeks to offer a thorough overview of Azure Virtual Networks and the ideas related to them.

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Virtual networks are vital for organizations that use clouds for storing their data. They provide additional security and accessibility to their systems. The concept of virtual networks is straightforward, and after going through this article, you’ll be quite familiar with it. 

So, let’s dive in. 

What are Virtual Networks?

You use the internet every day, right? A virtual network is just like the internet; it’s a simpler version of the same. A virtual network (also known as VNet) allows you to manage various virtual private networks for creating a firmly secure network. Virtual networks give you the ability to connect with other virtual networks as well.

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This way, you have the option of creating a broad and secure network of different servers and systems that are connected. The best advantage of this network is, you can’t access it from the internet; this way, it’s highly secure and safe. The virtual machines present in a virtual network only respond to a request you make within the network.

Special VPN keys secure virtual networks. You can’t access the system without using the VPN key. This means you can’t access the applications and virtual machines present in the net, too, if you don’t have the unique VPN key. 

Why do we use Virtual Networks?

Virtual networks facilitate communication between two resources present in your cloud. We call them ‘virtual’ networks because there is no hardware required for connection. All the resources current in the system are connected virtually. 

There are many advantages to using virtual networks:

  • They reduce operation costs. You don’t need much hardware for running a virtual network in comparison to conventional methods. 
  • They are secure. One can’t access the network without having the secure VPN key. As a result, they provide your organization with much-needed safety.
  • They are fast. Virtual networks enable communication between the different components of your cloud. This way, your operation gets quicker and more efficient.

Azure Virtual Network Explained

The Azure Virtual Network (VNet Azure) represents your network in your cloud. It is the isolation of Azure according to your subscription. Remember the advantages of using virtual networks we discussed above? Azure provides you those advantages with a punch. 

In simple terms, with the use of Azure VNet, you can enable the resources present in your cloud to interact with each other. How do you do that? 

Well, that’s what we’ll discuss in this guide. But we can summarize it here.

Suppose you want to connect two computers. But to join them, you need to have permission. For this purpose, you’ll need to access the settings of your virtual network. After you’ve done that, you can connect those two computers, and they can work with one another. 

Azure VNet lets you use other Azure resources in your cloud with high effectiveness. 

While a simple virtual network has its advantages, Azure provides you with its unique features such as isolation, availability, and scaling. 

Azure Networking includes various sophisticated networking capabilities that improve network security, flexibility, and availability. Some of these characteristics can help you have a better knowledge of Azure Virtual Networks:

NSGs have previously been highlighted, but their importance cannot be overstated. These groups enable granular oversight of network traffic within subnets and virtual machines by defining inbound and outbound security procedures. You may enforce network safety regulations by providing rules for standards, ports, and source/destination IP addresses.

Azure Load Balancer is a scalable, high-availability load-distributing system supplied by Azure. It aggregates incoming traffic over several virtual machines or resources, delivering optimum performance and high accessibility for virtual network applications or operations.

Azure Application Gateway is a layer 7 load balancer with powerful application distribution and security capabilities. It allows you to govern and optimize traffic in accordance with URL routing, SSL termination, and application-layer security settings, enabling safe and scalable online application delivery.

Basics of Virtual Networks

The Azure Network Interface is essential for Azure Virtual Networks. It connects a virtual machine to the Azure Virtual Network by acting as an extensive system adapter. You may allow connectivity between the virtual machine and various additional assets within the virtual network by establishing a network interface with it.

Before we begin discussing Azure virtual network, we should first take a look at some of its fundamental concepts:


You can divide a virtual network into different sections. And we call those sections ‘subnets’. Subnets are also of two sorts. 

  • Private
  • Public

Private subnets have no internet access, and public subnets do. You’d need both of these in your network. For example, if you run a website, its web server would be a public subnet. And its database server would be a private subnet. That’s because the former needs to stay connected to the internet, but the latter doesn’t. 

Resource Groups

The resource group refers to the logical container of all relevant resources. You can put in all the Azure resources of a particular setting in a single resource group and use it according to your requirements. You can create multiple resource groups for specific environments and then build them within their corresponding resource group. Creating resource groups allows you to scale the resources properly.

You can separate the dev team’s resources and the test team’s resources and assign them their resources accordingly. 

Read: How to Become a Good Cloud Engineer?

Network Security Groups

Your network handles a lot of outgoing and incoming requests. A network security group is a group of rules for the same. It’s attached to the subnets’ level. Network security groups allow you to control the data flow of your subnets. You can define the IP range for the incoming requests of your network as well, by using the network security group. 

How does an Azure Virtual Network work?

The working of an Azure Virtual Network is simple. First, you create the network, then you add its subnets, and associate them with their respective cloud instances or virtual machines. After that, you’d attach the required Network Security Groups to the subnets and configure their properties. Let’s discuss each step in detail to understand the concept properly.

Step #1

For this example, we’ll deploy a database, two servers, and a website server. They’ll interact with each other. The two servers we discussed would be present in the virtual network. 

For the first step, you should click on your Azure dashboard and search for Network Security Group. We’ll create one. 

Step #2

Now, you’ll need to fill the details in the NSG. After you’ve entered the required details such as name and subscription type, click on the ‘Create’ button. You’ll also see a menu for creating a resource group. Make sure that all the components are present in one group so you can manage them with more ease. 

Step #3

Now that we have a correctly set up Network Security Group, we can create a Virtual Network. For this purpose, select the option ‘Virtual Networks’ in your Azure dashboard and click on the “Add” button.

You’ll see a form where you’ll need to add all the details related to the network. Fill in the details accordingly. Don’t miss to select the ‘Use Existing’ option while choosing a resource group. You’d want to use the resource group we created in step #2. 

Step #4

Next up, we’ll create two subnets. The first one would be for our website, and the other one would be for the database. Go to the menu of your newly created Virtual Network, and select the ‘Subnets’ button. You’ll have to choose the ‘+Subnet’ button for adding a new subnet.

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Step #5

In this screen, you’ll have to create the required subnets. We need two. Create one for the web server and one for the database server. Make sure that you connect the Network Security Groups for them as well. 

Step #6

In this step, you’ll configure the NSGs and create your servers inside the network we’ve just created. So in the dashboard, click on the ‘Virtual Machines’ button and then click on the ‘Add’ button for adding a new server. 

Step #7

The system will ask you to choose an OS. We recommend selecting Ubuntu for this tutorial. You’ll also have to enter the required information, such as the name of the server. You will also have to enter the username for it. After you’ve added that information, select the basic configuration settings for your server. 

We recommend selecting the most basic settings for this tutorial. After you’ve chosen the configuration, you will select the virtual network. Click on the ‘Setting’ and select your virtual network there. 

Step #8

After you’ve chosen your virtual network, you’ll select the subnet, the option for which is just below the virtual network’s option. There, you should select the website server you had added to the system. In the network security group section, select the ‘None’ button. That’s because you’ve already added your NSG previously. After performing the configuration, you can click the ‘OK’ button and start the deployment process. Now repeat the same process for adding your database server. 

Step #9

We haven’t added anything else in our network, so we can’t connect our server through its IP address. You should add inbound security rule, for Source choose ‘Custom,’ for Protocol, choose ‘Any’, and for Action select ‘Allow.’ After this configuration, select the ‘OK’ button. 

After this, we’ll perform SSH configuration for connecting our virtual network to the internet. 

And that’s it. Now you know how to set up your Azure virtual network, and you must’ve seen how easy it is. 

Network Security Recommended Practices  

  1. Network Segmentation: To define logical barriers and separate resources depending on security needs, divide your Azure Virtual Network into subnets. Control access to the internet and secure critical data by properly using both public and private subnets.
  2. Just-In-Time (JIT) Access: Use the Just-In-Time access control function of Azure Security Center to limit incoming traffic to virtual machines. Administrators can use JIT access to open network connections for a set period of time, decreasing their exposure to possible security issues.
  3. Network Monitoring and Logging: Monitor network traffic, discover abnormalities, and get insight into the network’s operation using Azure Network Watcher and Azure Monitor. Enable monitoring and analytics for network-related data to determine and react to security events efficiently.
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Learn more about VNET Azure

We hope you learned everything you needed from this guide. However, if you’re interested in learning more, head on to our blog and find other articles based on Microsoft Azure and servers. You can also check our courses if you’re looking for a more complete and in-depth learning experience.

The reason upGrad has launched an Master of Science in Machine Learning & AI , the best engineering school in the country is to create a program that teaches you not only machine learning but also the effective deployment of it using the cloud infrastructure. Our aim with this program is to open the doors of the most selective institute in the country and give learners access to amazing faculty & resources in order to master a skill that is in high & growing demand.


Kechit Goyal

Blog Author
Experienced Developer, Team Player and a Leader with a demonstrated history of working in startups. Strong engineering professional with a Bachelor of Technology (BTech) focused in Computer Science from Indian Institute of Technology, Delhi.
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Frequently Asked Questions (FAQs)

1What is Azure?

Azure is a cloud computing platform founded and run by Microsoft. It is also known as Microsoft Azure and was earlier known as Windows Azure. It offers a wide range of cloud computing services such as storing, computing, analytics, and networking. Many industries use it as it is compatible with various open source technologies. This platform offers four different types of cloud computing options which are IaaS (Infrastructure as a service), PaaS (Platform as a service), SaaS (Software as a service), and serverless.

2What are the advantages of virtual networking?

Virtual networking has a number of commercial advantages, including reduced capital expenditures and maintenance expenses and the ability to partition networks quickly. A virtual network, in particular, reduces the amount of network hardware by delegating numerous operations to software. Centralized control in virtual networking lowers the cost and complexity of managing network gear and software. It also provides more flexible network routing layout and configuration choices, such as simpler network segmentation and subdividing. With additional fine-grained choices, such as installing firewalls at the virtual NIC level, virtual networking enhances network traffic control. It boosts IT efficiency by automating and remote-activating services and performing performance tests. Virtual upgrades, automated configuration, and modular modifications to network appliances and apps improve company scalability and flexibility.

3How do industries make use of the Azure virtual network?

Virtual networking is an integral part of every digital company strategy in today's world. It's a technological advancement covering remote access, safety, flexibility, scalability, and cost savings. Enterprise firms can outsource virtual networking as it will save time, money, and useful resources. Virtual networking will also ensure that all of the technological needs of your company gets fulfilled. The Azure platform is designed and developed to aid individuals and companies in overcoming hindrances and achieving their objectives. It provides different tools for a wide range of businesses, including e-commerce, banking, and a number of others. This platform gives consumers the freedom to use whichever tools and technologies they want.

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