What is azure firewall? A detailed guide

Cloud environments today are becoming increasingly dynamic and, consequently, more complex. As workloads scale and shift, so do the security challenges. Firewalls play a key role in keeping these environments safe by controlling which traffic is allowed in and out of your network.

This guide goes over everything you need to know about Azure Firewall, explaining what it is, why it’s needed, the different types available, how it works, how to set it up, and what alternatives you can consider depending on your use case.

Understanding Azure Firewall

Azure Firewall is a cloud-native, fully stateful security service built to protect your Azure workloads with intelligent traffic control and threat protection. It helps you secure both the traffic moving between your subnets and the traffic coming in or going out of your virtual network.

Azure Firewall is part of Azure’s broader Network Security offering, which also includes services like Azure DDoS Protection and Web Application Firewall. Each of these plays a role in building a layered security model.

Azure Firewall is offered in three SKUs: Basic, Standard, and Premium. Each SKU targets a different use case depending on the size and needs of your environment.

Azure firewall basic

Built for small- to medium-sized businesses that need basic protection at a lower cost, Azure Firewall Basic supports essential features like threat intelligence in alert-only mode and runs on a fixed scale with two backend VM instances. It’s best suited for workloads with up to 250 Mbps throughput.

Azure firewall standard

A more complete option that supports L3-L7 filtering and uses real-time threat intelligence from Microsoft Cyber Security. This SKU can alert or block traffic from known bad IPs and domains, which makes it a good fit for most enterprise workloads.

Azure firewall premium

Adds advanced features like intrusion detection and prevention (IDPS) using over 67,000 real-time threat signatures. It’s designed for high-security environments where you need deep packet inspection and protection against the most advanced attack vectors.

Key features of azure firewall

Here are some of the core features available on the Standard and Premium SKUs:

• TLS inspection: Decrypts outbound traffic to inspect encrypted threats before re-encrypting and forwarding it.
• Intrusion Detection and Prevention System (IDPS): Detects and blocks malicious patterns and behaviors in network traffic.
• URL filtering: Allows or blocks traffic based on specific URLs.
• Web categories: Administrators can allow or deny access to categories like gambling, social media, or adult content.
• High availability: Built-in redundancy and scaling ensure the firewall stays operational under varying loads.
• FQDN tags: Lets you simplify rule creation by using pre-defined domain-based tags (like AzureUpdate or AzureBackup).
• Threat intelligence: Uses Microsoft's global threat data to block access to known malicious sources.
• Network traffic filtering rules: Supports filtering by source/destination IP, port, and protocol at both network and application levels.

Why do you need azure firewall?

Here are some key reasons why every Azure environment should use Azure Firewall:

• Cloud infrastructure is dynamic: Cloud infrastructure scales up and down based on demand. It’s not efficient to rely on manual rule updates or inspection setups every time the environment changes. The recommended approach is to use an auto-scaling service like Azure Firewall that can automatically adjust to workload and traffic changes.
• Cloud environments are exposed: Public IPs, open ports, and interconnected services are common in cloud setups. Without a firewall, malicious traffic can easily find its way in.
• Misconfigurations are common: One wrong NSG rule or route table entry can expose sensitive systems. Azure Firewall acts as a safety net even if something else goes wrong.
• Internal threats exist too: Not all threats come from the outside. Azure Firewall also monitors internal traffic across subnets and VNETs to help catch lateral movement.
• Third-party integrations can introduce risk: Connecting to SaaS platforms, APIs, or hybrid networks adds complexity. A firewall gives you visibility and control over these connections.
• You need auditability and control: For most organizations, being able to log, monitor, and enforce traffic rules centrally is critical for security audits and regulatory compliance.
• Segmentation helps contain breaches: Firewall rules allow you to define isolated workloads. This prevents attackers from moving freely within your environment if one area is compromised.

How does azure firewall work?

Azure Firewall acts as a managed, cloud-based security gateway that filters traffic between your Azure virtual networks, the internet, and other connected resources. It uses a combination of rules, threat intelligence, and real-time inspection to allow or block traffic based on defined policies.

Let’s take a closer look at how it works and where its key features come into play.

Azure firewall manager

Azure Firewall Manager helps you manage multiple firewalls across different regions or environments. It supports:

• Centralized policy deployment
• Integration with security admin rules
• Hub-and-spoke setups using Virtual WAN

This is especially useful in larger organizations where firewalls are deployed across multiple VNETs or subscriptions.

Centralized policy management

At the core of Azure Firewall is a policy-based engine. You define rules in a policy, either directly on the firewall or through Azure Firewall Manager, and these rules dictate how traffic is handled. The firewall evaluates traffic against these rules in order of priority.

There are two main types of rules:

• Network rules: Filter traffic based on IP addresses, ports, and protocols.
• Application rules: Filter traffic based on fully qualified domain names (FQDNs), with optional support for URL path filtering in Premium SKU.

FQDN filtering and infrastructure FQDNs

FQDN filtering lets you allow or block outbound access to specific domain names instead of dealing with dynamic IPs. This is useful for controlling internet-bound traffic or limiting what external services your apps can reach.

Threat intelligence filtering

With threat intelligence enabled, Azure Firewall uses Microsoft’s global threat data to detect and block traffic to and from known malicious IPs and domains. In Standard SKU, this can be set to “alert” or “alert and deny” mode. Premium SKU combines this with deeper threat inspection like IDPS.

Rule processing logic

Rules are processed in a top-down order. Network rules are evaluated before application rules. If no rule matches, the firewall drops the traffic. This ensures tight control and minimizes accidental exposure. Policy inheritance can also be set up through Azure Firewall Manager, allowing you to apply base rules across multiple firewalls from a central place.

How to get started

Now that you know what Azure Firewall is all about, let’s go over the steps you need to deploy the basic SKU in your environment:

1. Create a resource group to keep all related components in one place.
2. Deploy a firewall resource using the basic tier. Place it in the resource group you just created, and choose to manage it with a new policy. During setup, create a new virtual network with the required subnets. Add both a public IP and a management IP.
3. Add a dedicated subnet to the virtual network for hosting a test workload. This subnet will be used to deploy a virtual machine behind the firewall.
4. Create a virtual machine in the new subnet. Disable any public access, and keep diagnostic settings minimal. Once it’s up, make note of the private IP for rule configuration.
5. Set up a route table in the same region and resource group. Add a route to send all outgoing traffic from the workload subnet through the firewall. Associate the route table only with the workload subnet.
6. Configure the firewall policy. Add the necessary network, application, and NAT rules to control how traffic is allowed or blocked between internal and external sources.
7. Adjust DNS settings for the workload to make sure it can resolve external domains as needed. Restart resources if required to apply changes.
8. Test your configuration. Confirm that the allowed traffic works as expected and that blocked traffic is correctly denied. Make sure management access is functioning if enabled.

Alternatives to azure firewall

Ideally, you should go with Azure Firewall since it’s built and maintained by Microsoft to work natively with other Azure services. It integrates well with Azure networking, policy management, and logging systems.

But if your use case requires features not supported by Azure Firewall, or if your team is already trained on third-party solutions, there are other options available in the Azure Marketplace. Some names worth mentioning are:

Palo alto networks VM-series

A virtual next-gen firewall that provides deep packet inspection, application awareness, and threat prevention. It supports advanced features like SSL decryption, URL filtering, and strong integration with security operations tools.

Fortinet fortiGate next-generation firewall

Fortinet offers high-performance security with deep inspection, antivirus, intrusion prevention, and VPN features. It is often chosen by organizations already using Fortinet’s hardware or looking for granular control and reporting.

Check point cloudguard

A firewall designed for multi-cloud environments. It supports identity-based rules, advanced threat prevention, and automation through APIs. It’s often used when consistency across different cloud providers is a priority.

Cisco secure firewall

Combines threat intelligence, application control, and malware protection. It fits well in environments already using Cisco security products and supports robust logging and monitoring features.

Sophos XG firewall

Provides synchronized security when paired with Sophos endpoints. It includes web filtering, traffic shaping, and deep packet inspection. A good choice for mid-sized teams already familiar with Sophos’ ecosystem.

Barracuda cloudGen firewall

Focuses on secure connectivity and WAN optimization in addition to standard firewall features. Often used in distributed environments where secure site-to-site connections are important.

Azure firewall management Challenges

Next, let’s discuss some common Azure Firewall challenges and how you can resolve them:

Rule sprawl and poor organization

As deployments grow, rule sets often become hard to manage and audit.

How to fix:

• Use Azure Firewall Policy to separate rules by purpose or environment
• Group related rules together with rule collections
• Regularly review and clean up unused or redundant rules

Limited visibility into traffic flow

It can be hard to troubleshoot blocked or allowed traffic without the right tools.

How to fix:

• Enable diagnostic logs and send them to SIEM or a log management solution like Site24x7.
• Use Network Watcher to analyze traffic flow and packet captures
• Consider integrating with Sentinel for deeper analysis

Complex policy inheritance and conflicts

Global and local policies can sometimes conflict and lead to unexpected behavior.

How to fix:

• Define a clear policy structure with priority and scope in mind
• Document policy inheritance rules carefully
• Test new policies in a dev environment before applying them in production

Performance impact from rule processing

Large rule sets can impact processing time, especially when rules are not optimized.

How to fix:

• Place high-priority rules earlier in the rule collection
• Avoid overlapping or overly broad IP ranges
• Break up rules into multiple policies where it makes sense

Difficulty managing FQDN-based rules

FQDN tags and DNS filtering don’t always cover every use case.

How to fix:

• Use Application Rules for outbound FQDN filtering
• Monitor DNS changes to keep rules accurate
• Consider using Threat Intelligence to catch risky domains dynamically

Integration limits with third-party tools

Not all security tools work seamlessly with Azure-native firewalls.

How to fix:

• Stick with tools that support Azure Monitor or REST APIs
• Export logs to formats that third-party tools can ingest
• Use Event Hubs for forwarding to external systems

Firewall logging costs growing unnoticed

High volumes of logs, especially in busy environments, can raise costs quickly.

How to fix:

• Send logs to a storage account with a lifecycle policy
• Only enable the diagnostic categories you need
• Use compression and filtering when exporting to third-party tools

Debugging latency issues in multi-region setups

Firewalls deployed across regions may introduce latency if traffic isn’t routed optimally.

How to fix:

• Use latency probes to monitor end-to-end delay
• Review UDRs (User Defined Routes) and peering setup
• Place firewalls closer to users or workloads

Misconfigured DNAT rules causing app downtime

Incorrect destination NAT rules can block or misroute traffic to backend services.

How to fix:

• Double-check DNAT mappings, port ranges, and protocol settings
• Test rule behavior with packet capture tools
• Use Application Gateway or Azure Front Door in front for better routing

Azure firewall best practices

Finally, here is a list of best practices to help you set up, maintain, and get the most value out of Azure Firewall in your cloud environment.

• Deploy Azure Firewall across multiple Availability Zones to avoid a single point of failure and ensure uptime during zone outages.
• Keep firewall policies and deployments separate for different environments to reduce the risk of accidental changes and improve traceability.
• Use Azure tags on firewall resources and associated policies to simplify billing, organization, and access control.
• If your environment uses custom DNS, make sure to configure Azure Firewall to point to those servers to avoid resolution issues.
• Only enable the DNS proxy feature if you need it. Unnecessarily enabling it can add complexity.
• Don’t leave firewall configuration ports open. Use JIT (Just In Time) or role-based access control to grant temporary access when changes are needed.
• Use Bicep, ARM templates, or Terraform to keep your firewall setup consistent and version-controlled.
• Schedule regular audits of your firewall setup to ensure alignment with internal security policies or external regulations.
• Keep clear records of any non-standard rules or exceptions, along with business justification and an approval trail.
• Wildcards can open up access to many unintended endpoints. Be as specific as possible in domain names.
• Where possible, use FQDNs or service tags instead of fixed IPs. IPs can change and may break access if not kept updated.
• Regularly review and remove unused rules with the help of Azure’s built-in analytics tools.
• Don’t rely on a blanket outbound rule. Define more granular outbound policies per subnet where possible.
• Organize rule collections by service type, department, or region. This helps when troubleshooting or auditing later.
• Keep rule collections small and manageable. Too many rules in one collection can slow down evaluation and create blind spots.
• Set connection idle timeouts to avoid lingering connections that consume resources.
• If you need to route all outbound traffic through another security appliance, configure forced tunneling properly.
• Always test major rule or architecture changes in a sandbox or test environment before applying to production.
• Don’t overprovision or underprovision. Choose the right SKU (basic vs. standard vs. premium) based on your use case.
• Always benefit from threat intelligence, even if you're on the Basic SKU that only alerts instead of blocking. These alerts can still help spot potential threats early and guide manual investigations.
• Integrate Azure Firewall with your monitoring tool. The best tools, like Site24x7, offer easy integration and let you track key metrics such as application rule hit count, network rule hit count, firewall health state, throughput, latency probe results, and many more.

Conclusion

Azure Firewall is a robust security solution that auto-scales to keep up with your cloud workloads. It simplifies traffic filtering across networks, applies consistent policy enforcement, and works well with other Azure services. If you have resources running in Azure and need built-in protection that grows with your environment, Azure Firewall is a must-have.

To make sure it's always working as expected, monitor Azure Firewall using Site24x7. You'll get visibility into traffic patterns, performance, and potential issues, all from a single dashboard.