Breaking the Cloud: The Hidden Dangers of Azure Forced Tunneling

The Compliance Trap

The mandate usually comes down from the CISO on a Friday afternoon: "All traffic must be inspected on-premises. No exceptions."

It sounds reasonable on paper. You want unified policy enforcement, deep packet inspection (DPI) in your trusted DMZ, and a single pane of glass for auditing. So, you implement Forced Tunneling. You inject a 0.0.0.0/0 route via BGP (Border Gateway Protocol) or UDR (User Defined Route) that drags every single packet—from user requests to Windows updates—back to your data center.

Then the alerts start firing: Windows VMs de-activating because they can't reach KMS (Key Management Service), firewalls losing threat intel, and client connections resetting due to DNAT (Destination Network Address Translation) failures despite "Allow" rules.

The CISO's mandate isn't wrong—they are trying to enforce Zero Trust. However, Forced Tunneling is a legacy data-center approach applied to a cloud-native problem. You didn't just route traffic; you broke the fundamental assumptions of the cloud. Here is how to implement Cloud-Native Zero Trust correctly.

Routing 101 For Forced Tunneling

Before fixing the architecture, you must understand the underlying mechanics that engineers actually need to know when diagnosing routing in Azure:

• Longest Prefix Match: Azure routes traffic based on the most specific prefix. A UDR for 10.0.0.0/24 will always override a BGP route for 10.0.0.0/16.
• Effective Routes: What you see in the Route Table blade isn't always the truth. You must check "Effective Routes" on the network interface (NIC) to see the merged reality of UDRs, BGP, and System routes.
• Gateway Route Propagation: If "Propagate gateway routes" is set to Yes on a Route Table, on-prem BGP routes are automatically injected. If disabled, only your manual UDRs apply. Disabling this is a common tactic to isolate subnets (like the Application Gateway subnet) from receiving the on-prem 0.0.0.0/0 route and breaking inbound routing.
• Asymmetric Routing: Traffic enters Azure via one path (e.g., direct via front-end Public IP) but attempts to leave via another (e.g., forced tunneled back to on-prem). Firewalls drop this stateful mismatch immediately.

The Selective Bypass Pattern

The baseline problem with Forced Tunneling is that on-prem advertises 0.0.0.0/0 over BGP, and Azure dutifully backhauls everything—including traffic destined for native Azure PaaS services, which kills performance and inflates ExpressRoute bandwidth.

The fix is the Selective Bypass Pattern. You use UDRs with Service Tags to send trusted Azure service traffic directly to the Azure backbone, while keeping unknown/internet traffic securely forced back to on-premises.

Fig: Azure Forced Tunneling (High Latency) vs Selective UDR Bypass (Low Latency).

resource "azurerm_route_table" "rt_fw_data" {
  name                          = "rt-afw-data-001"
  location                      = azurerm_resource_group.rg.location
  resource_group_name           = azurerm_resource_group.rg.name

  # 1. The Strict Rule (Go to the Principal's Office)
  route {
    name                   = "Force-Tunnel-OnPrem"
    address_prefix         = "0.0.0.0/0"
    next_hop_type          = "VirtualAppliance"
    next_hop_in_ip_address = var.on_prem_firewall_ip
  }

  # 2. THE VIP FAST PASS (Shortcut to Microsoft Services)
  route {
    name           = "Allow-AzureCloud-Direct"
    address_prefix = "AzureCloud" 
    next_hop_type  = "Internet"
  }

  # 3. THE VIP FAST PASS (Shortcut to Database)
  route {
    name           = "Allow-AzureSQL-Direct"
    address_prefix = "Sql" 
    next_hop_type  = "Internet"
  }
}

Example Route Table: RT-Performance-Bypass

Warning: Service tags resolve to underlying IP prefixes, meaning they follow the longest prefix match rule against your BGP routes. Be cautious when overriding global tags with region-specific variants.

From Service Tags to IP Groups: The "Pizza Party" Analogy

In our diagram above, we used Service Tags (like AzureCloud and Sql) to give a "Fast Pass" to Microsoft's own services. Service Tags are basically giant lists of IP addresses that Microsoft manages for you automatically.

But what if you want a Fast Pass for a list of your own custom partner companies, your remote developers, or your 3 favorite branch offices? Microsoft doesn't make Service Tags for your personal friends! This is where Azure IP Groups come in.

This "Group Chat" logic completely changes how enterprises structure cloud security. Here are the 3 major ways Azure IP Groups scale your Zero Trust architecture (complete with actual Azure Blueprint diagrams):

1. Access Control (The "VIP Pass" Directory)

Instead of writing dozens of fragile IP-based firewall rules for every vendor and remote team, the firewall simply reads central "Allow" folders.

Fig: Grouping Dynamic Remote Developers, Trusted Vendors, and QA Branches into logical Identity sets.

2. Security & Quarantine (The Threat Containment Zone)

During a security incident, time is everything. Security Engineers can instantly drop hacked VMs or known botnets into "Strict" IP Groups to instantly sever their connections, or lock down patch servers to a "Golden Whitelist."

Fig: Utilizing high-priority DROP rules tied to living Threat-Intel IP Groups.

3. Routing & Migration (The Global Synchronizer)

This highlights the true power of IP Groups at enterprise scale. When acquiring a new company or migrating massive datacenters over 6 months, you update the central "Cloud-Migrated" IP group in Azure Resource Manager (ARM), and it instantly syncs the new IP blocks across ALL your global firewalls synchronously.

Fig: A single ARM update cascading to East US, West Europe, and Japan East Firewall policies simultaneously.

1. The "Chicken-and-Egg" Crisis

Azure Firewall is a managed service that needs to talk to its control plane. When you force tunnel 0.0.0.0/0 to on-prem, you blind the firewall. It can't download the signature updates required to inspect the traffic.

The Fix: Split the Planes

You must separate the Management Plane from the Data Plane. This is an absolute requirement for Forced Tunneling support.

• AzureFirewallSubnet: This is for your data. You can force tunnel this subnet.
• AzureFirewallManagementSubnet: This is for Microsoft control plane traffic. It must be named exactly this, it MUST be a /26 or larger, and it MUST have a direct route to the Internet.

By providing a dedicated AzureFirewallManagementSubnet, Azure automatically routes its operational traffic (updates, metrics, backend management) directly out, ignoring your BGP forced tunnel. Your customer data remains securely routed through the standard data subnet.

2. The Silent Connection Killer (DNAT & Asymmetric Routing)

The Scenario: An internet client connects to your Azure Firewall Public IP. The firewall DNATs the traffic to your backend VM. The backend VM receives the packet, but its default route points to on-prem via the forced tunnel. The VM replies via the ExpressRoute. The client receives a reply from an unexpected IP (your on-prem gateway) or the firewall state table drops the connection.

The Supported Alternative

Instead of mapping Public IPs directly through the Azure Firewall in a forced tunnel environment, use an Application Delivery Controller that terminates the TCP session:

• Azure Application Gateway (WAF): Place the AppGW in a subnet with gateway route propagation disabled. It terminates the inbound internet connection and proxies a brand new connection to the backend VM, preserving path symmetry.
• Azure Front Door: For global HTTP/S load balancing, use Front Door coupled with Private Link to reach your backends securely without wrestling with DNAT limits on the firewall.

3. The KMS Activation Failure

You forced tunnel everything, and suddenly your new Windows VMs in Azure are reporting they aren't genuine. Why?

Windows Activation (KMS) requests must originate from recognized Azure Public IPs. When your VM reaches out to the KMS server via your on-prem corporate gateway (because you forced tunneled it), Microsoft's activation servers reject the unauthorized source IP.

The Fix: The Specific UDR

You must explicitly bypass the forced tunnel for the Azure Global Cloud KMS endpoints. Add these precise UDR exception routes to your subnets:

Destination: 20.118.99.224/32 
Next Hop Type: Internet

Destination: 40.83.235.53/32
Next Hop Type: Internet

Ensure your NSGs allow outbound TCP 1688 to these IPs. Note: If you are operating in sovereign clouds (Azure Government, Azure China), validate the specific KMS endpoints for your region, as they differ.

When NOT to Use Forced Tunneling

Forced Tunneling looks great to compliance teams, but it is not a silver bullet. You should actively advocate against it in these scenarios:

• PaaS-Heavy Workloads: If your architecture relies heavily on Azure SQL, Storage, Cosmos DB, and App Services, backhauling traffic to on-prem will obliterate latency budgets and skyrocket ExpressRoute data costs.
• High Egress Volume: Media streaming or massive data transfer out to the internet should not traverse expensive on-prem WAN links just to be inspected and dropped back to the internet.
• When Private Endpoints Solve the Root Cause: If the goal is simply "prevent internet access to databases," use Azure PrivateLink. Private Endpoints bring the PaaS service into your VNet natively, completely removing the need to ride the default 0.0.0.0/0 route.
• Better Fit - vWAN Secured Hub: If you are building a large-scale enterprise network, an Azure Virtual WAN with a Secured Virtual Hub (Azure Firewall integrated) manages routing intent natively, making manual UDR forced tunneling obsolete.

Troubleshooting Playbook

Keep this matrix handy when the red alerts start firing off.

Video Vault (Must Watch)

Azure Firewall Deep Dive

Azure Firewall Routing

Azure Firewall Forced Tunneling

Summary

Forced Tunneling is a powerful architectural pattern, but it is not a "toggle and forget" setting. It requires a deliberate redesign of your routing, management planes, and egress paths. Don't let "compliance" become code for "outage."