How to setup Service Chaining in Azure?

In this blog post we will learn about VNet Peering, Hub and spoke Architecture and Service chaining in Azure.

What is VNet Peering?

Virtual network peering enables you to connect two Azure virtual networks. Once peered, the virtual networks appear as one, for connectivity purposes. There are two types of VNet peering.

Regional VNet peering connects Azure virtual networks in the same region.
Global VNet peering connects Azure virtual networks in different regions.

Issues with VNet Peering

VNet Peering is NONTRANSITIVE. This means that if you establish VNet Peering between VNet1 and VNet2 and between VNet2 and VNet3, VNet Peering capabilities do not apply between VNet1 and VNet3.This is shown in the below diagram:

How to overcome limitations of Vnet Peering?

You can deploy hub-and-spoke networks, where the hub virtual network can host infrastructure components such as a network virtual appliance or VPN gateway. All the spoke virtual networks can then peer with the hub virtual network. Traffic can flow through network virtual appliances or VPN gateways in the hub virtual network.This way all the networks can communicate with each other without any restrictions.

What is service chaining?

Virtual network peering enables the next hop in a user-defined route to be the IP address of a virtual machine in the peered virtual network, or a VPN gateway.
Service chaining enables you to direct traffic from one virtual network to a virtual appliance, or virtual network gateway, in a peered virtual network, through user-defined routes

Service Chaining Demo

We will understand service chaining with the help of Demo. We will implement the diagram shown below as demo. Demo is recorded and posted on my youtube channel and link is provided below.