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What are Azure virtual networks?

Cloud environments must accommodate fluctuating workloads and maintain optimal performance, security, and scalability at all times. To achieve this cloud services need to build a flexible networking framework. Azure Virtual Networks (VNets) are the cornerstone of Microsoft Azure’s networking services, providing this security, and scalable. Essentially, a VNet is a representation of your network in the cloud, allowing you to connect various Azure resources such as Azure Virtual Machines (VMs), databases, and web apps within a secure and isolated environment.

Azure Virtual Networks are designed to mimic traditional on-premises networks, enabling seamless integration with your existing IT infrastructure. They offer extensive control over IP address blocks, DNS settings, security policies, and route tables, ensuring that your network meets the specific requirements of your applications.

azure virtual network, azure VNet, 	
azure virtual network gateway, 	
azure virtual network pricing, 	
azure virtual network tutorial, Azure VPN gateway, Azure VNet Peering
Source: Microsoft Azure

Why Do We Use Azure Virtual Networks?

An Azure virtual network is a fundamental building block for your private network in the cloud. It creates a secure environment for your Azure resources to connect with each other and the outside world.

But why use a VNet? Here’s why it’s crucial:

  • Secure communication with the Internet: Resources within an Azure Virtual Network can communicate securely with each other and the Internet. You can control this communication using firewalls and security rules.
  • Connectivity between Azure resources: VNets provide security to connect your Azure resources to the internet, other virtual networks, or even your on-premises network using various methods like VPN or ExpressRoute.
  • Easy Traffic Management: Azure Virtual Networks can filter network traffic between different parts of your virtual network using network security groups or network virtual appliances.
  • Route network traffic: Azure automatically routes traffic within your virtual network and to the internet. You can customize routing using route tables or Border Gateway Protocol (BGP).
  • Integration with Azure services: Users can securely integrate Azure services like storage or databases within your Azure Virtual Network for private access from your resources.

Overall, an Azure virtual network provides a secure and flexible platform to build and manage your cloud network infrastructure.

Key Components of Azure VNet

What are the foundational elements that make up an Azure Virtual Network? A VNet is a meticulously planned isolated unit that exists within the Azure cloud ecosystem. The key components of VNet include subnets for segmentation, IP addresses for identification, Network Security Groups for access control, and route tables for efficient traffic flow. By understanding these building blocks, you’ll gain a deeper appreciation for the power and flexibility of Azure VNets.

Now, let’s dive deeper into these key components.

  • Subnets: These are logical divisions within an Azure Virtual Network that allow you to segment your resources for better organization, security, and routing. You can assign specific security policies and routing rules to different subnets.
  • IP Addresses: VNets use private IP addresses for resources within the network, keeping them hidden from the public internet. You can also assign public IP addresses to resources if they need to be accessed directly from the internet.
  • Network Security Groups (NSGs): These act as firewalls, controlling inbound and outbound network traffic to your resources. You can define rules that specify which traffic is allowed within the NSGs based on factors like source and destination IP address, port, and protocol.
  • Route Tables: While Azure automatically routes traffic within the VNet, you can customize routing using route tables. These tables define how traffic is directed to different subnets, the internet, or on-premises networks.

How to create VNet from Azure Portal

Creating an Azure Virtual Network (VNet) is a fundamental step in setting up your cloud infrastructure. Azure provides multiple methods to create and configure VNets, such as the Azure portal, Azure PowerShell, Azure CLI, Bicep, Azure Resource Manager template, Terraform configuration etc.

This hands-on demo is a guide to create a virtual network, or VNet, using the Azure portal.

Step 1: Log In to Azure Portal

  • Log in to your Azure account and navigate to the Azure portal.

Step 2: Create a New Virtual Network

  • In the Azure portal, click on “Create a resource” in the left-hand menu.
  • Search for “Virtual Network” and select it from the results.
  • Click on “Create” to start the setup process.

Step 3: Configure Basic Settings

  • Subscription and Resource Group: Select your Azure subscription and either create a new resource group or choose an existing one.
  • Name and Region: Enter a name for your VNet and select the appropriate region.
  • Address Space: Define the IP address range for your VNet. Ensure that it does not overlap with any existing networks.
Azure VNet, azure virtual network tutorial, Create Azure Virtual Network, Azure subscription, Azure protal, How to create VNet from Azure Portal
Source: Microsoft Azure

Step 4: Set Up Subnets

  • Click on “Add subnet” to create a subnet within your VNet.
  • Provide a name for the subnet and define its IP address range.
Azure VNet, azure virtual network tutorial, Azure subnets, Azure Vnet pricing
Source: Microsoft Azure

Step 5: Review and Create

  • Review the settings you’ve configured to ensure everything is correct.
  • Click on “Create” to deploy your Virtual Network.

Step 6: Deploy Resources

  • Once your VNet is created, you can start deploying Azure resources such as Azure VMs, databases, and web apps within the configured subnets.

Azure virtual network Pricing – Explained

Creating a Virtual Network in Azure does not incur any charges. Users can create up to 50 virtual networks across all Azure regions without any charges. However, there are associated costs for certain functionalities within a virtual network. Let’s break down the Azure Virtual Network pricing aspects:

VNet Peering:

This feature allows you to connect multiple virtual networks and route traffic between them using private IP addresses. Here’s a breakdown of VNet Peering costs:

  • Within the same region: Both inbound and outbound data transfers are charged at $0.01 per GB.
Data TransferCost
Inbound data transfer$0.01 per GB
Outbound data transfer$0.01 per GB
Azure Network Pricing – VNet Peering within the same region
  • Global VNet Peering: Pricing of Global VNet Peering is based on zones. Data transfer between zones incurs charges for both inbound and outbound traffic, and the cost varies depending on the specific zones involved.
Data TransferZone 1Zone 2Zone 3US Gov
Inbound data transfer$0.035 per GB$0.09 per GB$0.16 per GB$0.044 per GB
Outbound data transfer$0.035 per GB$0.09 per GB$0.16 per GB$0.044 per GB
Azure Network Pricing – Global VNet Peering

Accelerated Connections

Accelerated Connections offers top-notch performance in optimizing Connections Per Second (CPS) and handling many simultaneous connections for network-heavy tasks. It’s set up at the network interface (vNIC) level. There are four performance options (A1, A2, A4, A8) to give you flexibility in choosing the right performance level for your needs. Its throttle limits vary based on the SKU selected.

Azure Billing begins as soon as an Accelerated Connections-enabled NIC is attached to a running VM. Currently, Accelerated Connections is available in a limited general availability (GA) release. Here’s a table summarizing the cost per hour for each SKU:

Accelerated Connections SKUConnections per second (CPS)Simultaneous connectionsCost per hour
A1Up to 100KUp to 1M$0.025 per hour
A2Up to 250KUp to 2M$0.125 per hour
A4Up to 600KUp to 4M$0.75 per hour
A8Up to 1500KUp to 8M$2.50 per hour
Pricing of Accelerated Connections SKU

Apart from this, network appliances such as VPN Gateway and Application Gateway that are running inside a virtual network are also charged.

Best Practices to run a cost-effective Azure Virtual Network

Running a cost-effective Azure Virtual Network, including several optimization strategies, and resource management. Here are some key strategies:

Minimize Cross-Region Transfers

To effectively manage costs, it’s crucial to minimize cross-region transfers. Data transfers between different Azure regions incur additional charges, which can quickly add up. By keeping your data transfers within the same region, you can significantly reduce these costs.

Setting up regional Virtual Networks (VNets) helps keep the data flow local, improving both cost efficiency and performance by reducing latency.

Use Content Delivery Networks (CDNs)

Leveraging Azure Content Delivery Network (CDN) can dramatically improve the performance and cost-efficiency of your network. CDNs cache content at strategically located edge servers around the world, delivering it quickly to users based on their geographic location.

This reduces the load on your primary servers and decreases the amount of data transferred across long distances, thereby lowering data transfer costs and improving user experience.

Cost-Effective Network Architecture

Designing a cost-effective network architecture involves strategically planning your network layout and resource allocation. Use subnetting to segment your Virtual Network (VNet) efficiently, and ensure that IP address ranges are appropriately assigned to avoid conflicts.

Optimize the use of resources by deploying only what is necessary and scaling them according to demand. This approach minimizes wastage and helps in maintaining a lean and cost-efficient network infrastructure.

Use Network Security Groups (NSGs) for Efficient Load Distribution

Network Security Groups (NSGs) are essential for managing traffic and ensuring secure access to your resources. However, they can also aid in efficient load distribution. By carefully defining NSG rules, you can control traffic flow and ensure that it is distributed evenly across your resources.

Azure Virtual Network, Azure VNet, Azure Network Security Groups, Azure NSG, Azure subnet, Azure Network interface
Source: Microsoft Azure

This not only enhances security but also helps in optimizing resource utilization, preventing any single resource from becoming a bottleneck, and thereby improving overall performance and cost-effectiveness.

Simplified Network Architecture

It is recommended to have fewer large virtual networks rather than multiple small virtual networks to prevent management overhead. Azure VNet Manager supports this approach by making it easier to manage larger VNets, reducing the complexity and operational burden associated with handling numerous small networks.


In summary, an Azure Virtual Network provides a robust, secure, and scalable framework for building and managing your cloud network infrastructure. By following the best practices, you can optimize your network’s performance and cost-efficiency. Moreover, Azure VNet Manager further supports these strategies by providing centralized management, automation, and integration with other Azure services, enhancing your overall network management capabilities.

By embracing Azure best practices and cost effective FinOps strategies, Azure Virtual Network will remain efficient and economical while delivering the performance and security necessary to support your business operations.

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Heera Ravindran

Content Marketer at Economize. An avid writer and a zealous reader who specializes in technical content and has a passion for all things Cloud and FinOps.

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