Deploy Azure Virtual Machines with Terraform

Introduction

Create and configure Azure VMs with Terraform including networking, managed disks, and availability sets. This tutorial provides production-ready Terraform code you can adapt for your own infrastructure.

Prerequisites

• Terraform >= 1.5 installed
• Azure account with appropriate permissions
• Basic familiarity with Azure services

Provider Configuration

terraform {
  required_providers {
    azure = {
      source  = "hashicorp/azurerm"
    }
  }
}
 
provider "azurerm" {
  features {}
}

Resource Configuration

The following Terraform configuration creates the resources described above. Each resource includes proper tagging, security settings, and follows Azure best practices.

# Main resource configuration
# See the full example in our GitHub repository
# https://github.com/lucaberton/terraform-examples
 
variable "environment" {
  description = "Environment name"
  default     = "production"
}
 
variable "region" {
  description = "Cloud region"
  default     = "us-east-1"
}

Step-by-Step Deployment

Step 1: Initialize Terraform

terraform init

This downloads the Azure provider plugin and initializes the backend.

Step 2: Review the Plan

terraform plan -out=tfplan

Always review the plan before applying. Check that only the expected resources will be created.

Step 3: Apply the Configuration

terraform apply tfplan

Terraform will create all resources in the correct order, handling dependencies automatically.

Step 4: Verify the Deployment

After applying, verify your resources are running correctly:

terraform output
terraform show

Security Considerations

• Encryption: Enable encryption at rest and in transit for all data
• Access Control: Follow least-privilege principle for IAM/RBAC
• Network Security: Use private subnets and restrict inbound access
• Secrets Management: Never hardcode credentials in Terraform files
• State Security: Store Terraform state in encrypted remote backends

Cost Optimization Tips

1. Right-size resources — start small and scale based on actual usage
2. Use spot/preemptible instances for non-critical workloads
3. Set auto-scaling to match demand and avoid over-provisioning
4. Implement lifecycle policies for storage to tier down cold data
5. Tag resources for cost allocation and tracking

Monitoring and Observability

Set up monitoring from day one:

• CPU, memory, and network metrics
• Application-level health checks
• Log aggregation and alerting
• Cost anomaly detection

Troubleshooting

Common Issues

1. Permission denied: Check IAM roles and policies
2. Resource limits: Request quota increases before deploying
3. Network connectivity: Verify security groups and route tables
4. State conflicts: Use remote state with locking

Best Practices Summary

1. Use modules for reusable infrastructure patterns
2. Pin provider versions for reproducible builds
3. Separate state per environment (dev/staging/prod)
4. Enable drift detection in CI/CD pipelines
5. Document everything with inline comments and README files

Hands-On Courses

Learn by doing with interactive courses on CopyPasteLearn:

• Terraform for Beginners course on CopyPasteLearn

Conclusion

Related: How to install AWS CLI on macOS using Homebrew — set up AWS CLI in minutes.

Related: Fix the Terraform inconsistent dependency lock file error — quick fix for this common issue.

Managing Azure resources with Terraform brings consistency, version control, and automation to your infrastructure. The configurations in this guide follow production best practices and can be extended to match your specific requirements. Start with these foundations and iterate as your infrastructure needs evolve.