Know everything about Azure Policies

Azure Policies are a set of governance tools in Microsoft Azure that help organizations enforce rules and guidelines for resource management, ensuring compliance with organizational and regulatory standards.

Azure Policies enable you to control and manage the configuration of resources, prevent misconfigurations, and help with cost management and security.

Here are key things to know about Azure Policies.

1. What are Azure Policies?

Azure Policy is a service that enables you to define, implement, and enforce specific rules and guidelines for Azure resources.

These rules can govern various aspects of your environment, such as resource configuration, security, cost management, and compliance.

Policies are applied to Azure subscriptions, resource groups, and individual resources.

Azure Policies are built on the foundation of policy definitions and can be assigned to various scopes (management groups, subscriptions, resource groups, etc.) to control resource behavior.

2. Key Components of Azure Policy

Policy Definition

A policy definition is the rule that defines what is allowed or not allowed within your Azure environment.

It includes conditions (the "if" part) and the desired effect (the "then" part).

For example, a policy might require all virtual machines to be deployed in specific regions.

Types of policies

Built-in policies

Predefined policies available in Azure for common use cases (e.g., enforcing the use of specific VM sizes, limiting resource types).

Custom policies

Policies that you create to meet your specific needs.

Policy Assignment

A policy definition is assigned to a scope (management group, subscription, resource group, or resource).

When assigned, the policy takes effect and enforces the defined rules at that scope.

Policy Initiative

An initiative is a collection of policies grouped together to meet a specific goal, such as security, compliance, or cost management.

Initiatives make it easier to manage multiple policies simultaneously.

Effect

The effect defines the action to take when a policy rule is violated.

Common effects include:

• Deny: Prevents a resource from being created or modified if it does not comply with the policy.

• Audit: Monitors and logs non-compliant actions but does not prevent them.

• Append: Adds missing properties to a resource to make it compliant with the policy.

• DeployIfNotExists: Automatically deploys additional resources if certain conditions are not met (e.g., applying security monitoring tools).

• Disabled: Turns off the policy temporarily without enforcing any actions.

Policy Exemption

You can create exemptions to allow certain resources to bypass policies under specific conditions.

Exemptions are often used when a resource needs to be temporarily exempted from a policy during deployment or migration.

3. Scopes and Assignments

Azure Policies can be assigned at different levels in the Azure hierarchy.

• Management Groups

At the highest level in the hierarchy, policies can be applied to all subscriptions within a management group, enabling centralized governance for large organizations.

• Subscriptions

Policies can be applied to a single Azure subscription to enforce governance within that subscription.

• Resource Groups

Policies can be applied at the resource group level to govern a specific set of resources.

• Resources

In some cases, policies can be applied directly to individual resources to enforce specific configurations or behaviors.

4. Policy Compliance and Evaluation

Once a policy is assigned, Azure continuously evaluates the compliance of resources against the policy.

The compliance state of each resource is evaluated on a periodic basis or when the resource configuration is changed.

• Compliance State

Resources are either compliant or non-compliant with the assigned policy.

You can check the compliance state in the Azure Policy compliance dashboard.

• Policy Remediation

When a policy violation occurs, you can trigger remediation tasks.

Some policies, such as DeployIfNotExists, automatically correct the issue by deploying resources or configurations.

5. Built-in vs. Custom Policies

Built-in Policies

Azure provides a set of built-in policy definitions that cover common governance scenarios.

These are ready to use and can be assigned directly to your resources.

Examples include:

• Enforcing the use of only specific Azure regions (e.g., only East US or West Europe for VM deployment).

• Preventing the deployment of specific resource types (e.g., disallowing the use of certain VM sizes or locations).

• Ensuring specific tagging on resources (e.g., enforcing Environment or Owner tags).

• Enforcing security policies like network security groups (NSGs) or Azure Key Vault usage.

Custom Policies

If built-in policies don't cover your specific needs, you can create custom policies using Azure Resource Manager (ARM) templates.

Custom policies give you more flexibility to define specific rules for your resources, configurations, and environments.

6. Policy and Compliance Monitoring

Azure provides tools to help you monitor and track policy compliance.

• Azure Policy Compliance Dashboard

The Azure Policy compliance dashboard provides an overview of how well your resources comply with your policy assignments.

It helps you identify non-compliant resources and assess the effectiveness of your policies.

• Policy Insights

Use Policy Insights to get detailed information about policy evaluations and compliance results.

This data can be exported for analysis or used in custom reports.

• Azure Monitor Integration

Policies can integrate with Azure Monitor to trigger alerts when non-compliance occurs, allowing you to take immediate action.

7. Enforcing Security and Compliance with Azure Policies

Azure Policies can be a powerful tool for ensuring security and regulatory compliance.

Some examples include:

• Security Baseline Enforcement

Use policies to enforce security controls, such as ensuring that Network Security Groups (NSGs) are associated with virtual networks, or requiring encryption for storage accounts.

• Identity and Access Management

Enforce policies to require the use of Entra ID identities and multi-factor authentication (MFA) for access to resources.

• Data Residency and Privacy

Use policies to restrict the geographic locations where certain resources can be deployed to comply with data residency and privacy laws (e.g., GDPR, HIPAA).

• Tagging Policies

Enforce rules that require resources to have specific tags (e.g., CostCenter, Project, Environment) to ensure proper management, reporting, and cost allocation.

8. Policy Effects and Actions

As mentioned, Azure Policies can have various effects on resource deployments.

• Deny

Prevents non-compliant resources from being created or updated.

This is the most restrictive action and ensures that only compliant resources are allowed.

• Audit

Logs non-compliant actions without blocking them.

This is useful for monitoring and reporting but doesn't prevent deployment.

It’s often used to track non-compliance before taking action.

• Append

Adds additional properties to a resource to ensure compliance.

For example, you can enforce tagging policies by automatically adding missing tags when a resource is deployed or updated.

• DeployIfNotExists

If a resource doesn't exist, it will automatically deploy the necessary configuration.

For example, if a virtual machine is deployed without Azure Security Center enabled, a policy can deploy this service automatically.

• Disabled

Temporarily disables the policy without taking any enforcement actions.

9. Best Practices for Using Azure Policies

Here are some best practices when working with Azure Policies.

• Start Simple

Begin by assigning simple policies (e.g., region restrictions or required tags) before moving to more complex policy definitions.

• Use Built-in Policies

Leverage Azure’s built-in policy definitions wherever possible.

They cover many common governance and compliance scenarios and save time.

• Use Initiatives

Group related policies into Initiatives to simplify management.

For example, create an initiative for security policies or compliance-related policies to enforce across your environment.

• Monitor Compliance Regularly

Regularly monitor policy compliance via the Azure Policy compliance dashboard.

Address any non-compliance to ensure that your environment remains secure and compliant.

• Test Policies in a Staging Environment

Before applying a policy to your production environment, test it in a development or staging environment to assess its impact and avoid unintended disruptions.

• Review Exemptions

If using policy exemptions, review them periodically to ensure they are still necessary and don’t pose a security or governance risk.

• Leverage Automation

Use Azure Automation to remediate non-compliant resources automatically where possible.

For instance, you can automatically deploy missing security solutions to non-compliant resources using DeployIfNotExists.

10. Azure Policy for Cost Management

Azure Policies can be an effective tool for managing costs.

• Limit Resource Types

Use policies to restrict the use of specific resource types or sizes that are more expensive or unnecessary for your needs.

• Enforce Location Restrictions

Limit resource deployment to certain regions to avoid higher costs associated with regions with premium pricing.

• Tagging for Cost Allocation

Enforce tagging policies that ensure resources are tagged correctly, enabling easier cost allocation and budgeting.

Conclusion

Azure Policies are a powerful tool for organizations looking to maintain compliance, optimize resources, and enforce best practices in their Azure environments.

By defining, assigning, and monitoring policies, organizations can ensure that resources are configured correctly, securely, and efficiently, while avoiding non-compliance and reducing risks.

Whether you're managing security, cost, or governance, Azure Policies help streamline operations and maintain a robust cloud environment.