What is Azure Resource Hierarchy?

The Azure Resource Hierarchy is the organizational structure used to manage and structure resources across your Azure environment.

Understanding how this hierarchy works is crucial for organizing, managing, securing, and monitoring resources efficiently.

The hierarchy also plays a vital role in applying governance, policies, and managing costs.

Here’s a breakdown of the key components of the Azure Resource Hierarchy and things you need to know about it.

1. Azure Resource Hierarchy Overview

Azure resources are organized in a hierarchical structure to provide a logical, manageable, and scalable way of managing all the resources that make up your cloud environment.

This hierarchy is designed to help you organize resources by project, environment, department, and region while ensuring that access control, governance, and monitoring are effective.

The main components of the Azure Resource Hierarchy are:

1. Azure Management Groups

2. Subscriptions

3. Resource Groups

4. Resources

2. Key Components of the Azure Resource Hierarchy

a. Azure Management Groups

Management Groups provide a top-level organizational structure that enables you to manage multiple subscriptions at scale.

Purpose

They help in organizing subscriptions for large organizations that have many resources spread across various projects, departments, or regions.

Parent-Child Structure

Management groups are arranged in a hierarchical tree structure where each management group can contain one or more subscriptions or other management groups.

Use Cases

• Apply policies, governance, and compliance at scale across multiple subscriptions.

• Delegate administrative control over groups of subscriptions.

• Implement Azure Policy or Azure Blueprints at a management group level to enforce governance.

Key Points

• A single management group can contain up to ten thousand subscriptions.

• You can nest management groups up to six levels deep.

• Root Management Group is the top-most level of the hierarchy, which automatically includes all subscriptions in the directory.

b. Azure Subscriptions

Subscription

A subscription is the next level in the hierarchy and represents a billing boundary, containing the resources you create and manage.

Purpose

Each subscription provides a logical boundary for resource management and billing.

Usage

• Resources are deployed into a subscription.

• Billing is tied to a subscription, and each subscription has a spending limit (for example, through a credit card or an Azure Enterprise Agreement).

• You can assign Role-Based Access Control (RBAC) permissions at the subscription level to manage who can create, modify, and delete resources.

Key Points

• You can have multiple subscriptions within a single Azure Entra ID tenant.

• Subscription limits like the number of resources you can deploy may differ based on the subscription type (e.g., Pay-As-You-Go, Enterprise Agreement).

c. Resource Groups

Resource Groups are containers that hold related resources for an application or workload, and they allow for logical grouping of resources that share a lifecycle.

Purpose

A resource group helps in managing resources that are related to a specific project, team, or department, making it easier to deploy, manage, and monitor resources.

Usage

• Resources within a resource group can span multiple Azure regions, but the metadata for the resource group is stored in the region specified during creation.

• You can apply tags, RBAC, and Azure Policies at the resource group level.

• Deleting a resource group will delete all the resources inside it (unless they are locked).

Key Points

• There are no hard limits on the number of resource groups you can create in an Azure subscription, but there are practical limits based on management complexity.

• A resource group can contain multiple resource types, like virtual machines, storage accounts, and databases, from different Azure services.

d. Resources

Resources are individual Azure services and components (e.g., Virtual Machines, Storage Accounts, Databases, Virtual Networks).

Purpose

Resources are the building blocks of your cloud infrastructure and are deployed within a resource group.

Usage

• Resources can be scaled up or down depending on demand.

• Each resource can have specific configuration settings, permissions, and monitoring tools associated with it.

• Resources are billed individually based on usage, and their pricing may vary depending on the type of resource and configuration (e.g., VM size, storage performance, etc.).

Key Points

• Resources are the lowest level in the Azure hierarchy and the most granular elements you work with.

• Resource IDs are unique identifiers that help locate and manage resources within a subscription.

3. Benefits of the Azure Resource Hierarchy

a. Logical Organization

The hierarchical structure helps in organizing resources based on your organizational needs, whether by project, department, environment (e.g., development, testing, production), or region.

b. Access Control and Security

With Role-Based Access Control (RBAC), you can apply granular access policies at various levels of the hierarchy (management group, subscription, resource group, and individual resource level).

For example

You can assign read-only access to users at the resource group level but provide full control over a specific resource, like a storage account.

c. Governance and Compliance

Azure Policy and Azure Blueprints can be applied at higher levels like management groups and subscriptions, enabling you to enforce compliance and governance across multiple subscriptions.

The hierarchy allows you to enforce standardized configurations, security rules, and cost management policies across different parts of the organization.

d. Billing and Cost Management

Subscriptions provide a boundary for billing, and each subscription generates its own billing statement.

Azure Cost Management allows you to track, allocate, and optimize costs within subscriptions and resource groups.

By organizing resources into different subscriptions or resource groups, you can track the costs associated with specific projects or departments more effectively.

4. Best Practices for Using the Azure Resource Hierarchy

a. Use Management Groups for Large Organizations

Use management groups to organize subscriptions at scale.

They help in managing governance policies across multiple subscriptions, especially in large enterprises.

Apply policies and RBAC at the management group level to reduce administrative overhead.

b. Organize Subscriptions by Workload or Environment

You can use subscriptions to separate workloads or environments.

For example

• Development subscription: for testing and experimentation.

• Production subscription: for live applications and services.

• Sandbox subscriptions: for isolated experiments.

c. Structure Resource Groups by Lifecycle

Resource groups should represent a logical unit of resources that share the same lifecycle, such as an entire application, a microservice, or a team’s resources.

Avoid creating too many resource groups unless needed, as it can lead to management complexity.

d. Use Tags for Resource Group and Resource Organization

Tags can be used to add metadata to resources and resource groups.

Common tags include CostCenter, Environment, and Owner.

Using consistent tagging conventions helps in organizing and categorizing resources for better cost management, monitoring, and governance.

5. Things to Consider When Using the Azure Resource Hierarchy

a. Limits and Quotas

Each level in the hierarchy has its own service limits and quotas (e.g., the number of resources per subscription, the number of resource groups per subscription, and limits on nested management groups).

Always check and monitor quotas to ensure you don’t hit limits, especially when scaling resources in large environments.

b. Resource Dependencies

Resources within a resource group often have dependencies on each other, so be mindful of the relationships between resources when organizing them.

c. Security and Compliance

While organizing resources, consider using Azure Policy and RBAC at the management group or subscription level to enforce security standards, access restrictions, and compliance requirements.

6. Visualizing the Azure Resource Hierarchy

Here’s a visual representation of the Azure Resource Hierarchy:

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10
1
Azure Active Directory (AAD) Tenant
2
   ├── Management Groups
3
       ├── Subscription 1
4
       ├── Subscription 2
5
       └── Subscription 3
6
           ├── Resource Group 1
7
           │   ├── Resource 1 (VM)
8
           │   ├── Resource 2 (Storage Account)
9
           ├── Resource Group 2
10
           └── Resource Group 3

Conclusion

The Azure Resource Hierarchy is a powerful structure that helps organize, manage, and govern your resources effectively in the cloud.

By understanding how Management Groups, Subscriptions, Resource Groups, and Resources work together, you can create an organized, scalable, and secure cloud environment.

Using best practices for structuring these elements will help ensure that your Azure resources are easy to manage, secure, and compliant with organizational policies.