Walkthrough: Create Azure Kubernetes Service (AKS) using Terraform

When you are building your cloud infrastructure, you can think of it as code. Infrastructure as code means that the virtual machines, networking, and storage can all be thought of as code. On Azure, you can build your infrastructure using Azure Resource Manager (ARM) templates and deploy using PowerShell. You could also use PowerShell or Azure CLI to express your infrastructure. Many enterprises use Terraform, an open source infrastructure as code provider by HashiCorp, to build, change, version cloud infrastructure.

You can use Terraform across multiple platforms, including Amazon Web Services, IBM Cloud (formerly Bluemix), Google Cloud Platform, DigitalOcean, Linode, Microsoft Azure, Oracle Cloud Infrastructure, OVH, Scaleway VMware vSphere or Open Telekom Cloud, OpenNebula and OpenStack. In this article, we’ll explore Azure. At a high level, you write the configuration of your infrastructure in Terraform files that can describe the infrastructure of a single application or of your entire data center, and then apply it to the target cloud (in this case Azure).

In this article, you install Terraform and configure it, create the Terraform configuration plans for two resource groups an AKS cluster and Azure Log Analytics workspace, and apply the plans into Azure.

When you deploy the infrastructure, Terraform figures out the what changes changes to reach the desired state and then executes your configuration to build your cloud in its desired state.

In this article you will use a new JSON-like syntax of HCL to describe your infrastructure, then use the Terraform command line tool to build an execution plan, create a resource graph of your resources. You apply the plan for Terraform tp figure out what to change and in what order, and then will execute those changes.


You will need:

  • An Azure subscription and general understanding of Azure resource groups and resources.
  • Contributor role access on the subscription.
  • This demo uses Ubuntu 18.04 LTS on Linux on WSL on Windows or an similar Bash shell.
  • The Azure CLI.
  • Azure CLI for AKS so you can use kubectl. To install, use: az aks install-cli.
  • Visual Studio Code or another editor.
  • The lightweight and flexible command-line JSON processor, jq.
  • To use the graphics, install GraphViz.

For many of the requirements, you could use Azure Cloud Shell. Azure CLI, Terraform, and jq are already installed in Cloud Shell. If you are using Visual Studio Code, optionally install the Azure Terraform extension from Microsoft, ms-azuretools.vscode-azureterraform. The extension lets you run Terraform commands from inside VS Code, such as : init, plan, apply, validate, refresh and destroy. It also includes a visualizer.

Core Terraform workflow

The core Terraform workflow has three steps:

  1. Write. Author infrastructure as code.
  2. Plan. Preview changes before applying.
  3. Apply. Provision reproducible infrastructure.

In this article you will repeat the pattern to install the Resource group, the Log Analytics workspace, and AKS. But first, let’s set up Terraform and configure Terraform for Azure.

Install Terraform

Use these steps to install Terraform:

  1. Download Terraform for your platform.
  2. Unzip the file
  3. Either moving it to a directory included in your system’s PATH or add the location where you unzipped Terraform to your PATH.
  4. Verify Terraform is running using terraform --version.

terraform –version

Configure Terraform for Azure

To create resources in Azure, Terraform will need permissions. In this Terraform walkthrough, use a service principle. The security principal defines the access policy and permissions for the user or application in the Azure AD tenant.

To configure Terraform you will need to:

  1. Create a service principal for Terraform to access Azure.
  2. Set the service principal to environment variables that Terraform uses.

The following sample creates your service principal using az ad sp create-for-rbac.

## Requires jq .. to install see: https://stedolan.github.io/jq/download/
# set some environment variables to use to create the service principal
export SUBSCRIPTION_ID=3464892e-e827-4752-bad5-b4f93c00dbbe
export PROJECT_NAME="wus2-azure-aks-terraform-demo"
az account set –subscription="${SUBSCRIPTION_ID}"
# create the service principal to the subscription scope and save it to an auth file
TF_SERVICE_PRINCIPAL=$(az ad sp create-for-rbac –skip-assignment –role 'Contributor' –name rbac-tf-$PROJECT_NAME –output json –scopes="/subscriptions/${SUBSCRIPTION_ID}")
export ARM_CLIENT_ID=$(echo $TF_SERVICE_PRINCIPAL | jq '.appId')
export ARM_CLIENT_SECRET=$(echo $TF_SERVICE_PRINCIPAL | jq '.password')
export ARM_TENANT_ID=$(echo $TF_SERVICE_PRINCIPAL | jq '.tenant')
# Not needed for public, required for usgovernment, german, china
export ARM_ENVIRONMENT=public

It uses a name for you to identify it within Azure Active Directory. The service principal must have contributor permission in the subscription in order to create resource groups. --skip-assignment allows the service principal to access resources under the current subscription.

Next, the sample sets the environment variables that Terraform uses. The Azure Terraform modules uses the following environment variables.


Use ARM_ENVIROMENT to specify the cloud, such as China, Germany, or GovCloud.

Next although not required for the resource group, you will soon need to create an SSH key. You will use when you create your Kubernetes cluster.

ssh-keygen -t rsa -b 4096 -m PEM
# display the public key
cat $HOME/.ssh/id_rsa.pub

The public key is put into your home directory ~/.ssh/id_rsa.pub.

Create a resource group using HCL

In this step, you will use HashiCorp Configuration Language (HCL) to define a resource group and then use Terraform to deploy the resource group to Azure. The syntax of HCL is similar to JSON, but adds the idea of providing names to the object. The steps to create a resource group are:

  1. Define the Azure provider in a file named main.tf
  2. Create the resource group in a file named resourcegroup.tf
  3. Define the variables used by the resource group definition in a file named variables.tf
  4. Create a Terraform plan
  5. Apply the Terraform plan into Azure

Create main.tf

Let’s first create a directory and use your editor to create a file named main.tf Start by creating the directory and opening your editor. https://gist.github.com/brucedkyle/121d11c763b5182cdaaa82b6b1b08ec8#file-create-main-bash In main.tf, define the Terraform version and that you are targeting Azure.

provider "azurerm" {
# The "feature" block is required for AzureRM provider 2.x.
# If you are using Terraform version 1.x, the "features" block is not allowed.
version = "~>2.0"
features {}

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Save the file and exit the editor.

Create resourcegroup.tf

Next, create resourcegroup.tf in the same directory.

code resourcegroup.tf

Use the following HCL in resouregroup.tf:

# Defines the main resource group
resource "azurerm_resource_group" "rg" {
name = "${var.resource_group_prefix}${var.project_name}${var.environment}"
location = var.project_location
tags = {
"Cost Center" = var.project_name
Environment = var.environment
Team = "infrastructure"
Project = var.project_name

Save the file. Notice that Terraform uses its own format where resource "azurerm_resource_group" provides Terraform with kind of resource to create and "rg" is a name you can use later to reference this particular resource group.

Create variables.tf

Next, create a new file for the variables named variables.tf.

code variables.tf

Use the following content to set the default values of the variables. There are more variables that you need to create a resource group.. There are more variables that you need to create a resource group.

variable resource_group_prefix {
default = "rg-"
variable project_name {
default = "wus2-aksdemo"
variable project_location {
default = "West US 2"
variable environment {
default = "devtest"
variable company_name {
default = "azuredays"

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Use a project name based on your naming conventions. In this case, the name includes the region, project name, and environment. Use your own company name without spaces.

Save the file.

Create a Terraform plan

Next, we will take several steps to first initialize Terraform, then have Terraform figure out the dependencies and the differences between what exists in Azure. create a plan, then apply the plan into Azure. Here are the steps:

  1. Initiate Terraform plan using terraform init
  2. Use Terraform to create a plan for creating the resource groups by using terraform plan
  3. Apply the plan to Azure by using terraform apply
  4. Query Azure to see that the resource group was created

To initialize Terraform to be sure you have all of the requirements in place.

terraform init

You will see this response.


When you are building larger infrastructure, you may want to check for typos and be sure you have all your variables. You can validate using:

terraform validate

Create a Terraform plan

Terraform compares the requested resources to the state information saved by Terraform and then outputs the planned execution. You have not yet created your Azure resources.

terraform plan -var project_name=$PROJECT_NAME -out out.plan

Note that in this command, you change the project_name variable from the command line. And you send the output to an out.plan file.

Once you run the command, you should see the result of the plan, shown in the following illustration.

Apply the Terraform plan

Once the plan is created, you can then apply the plan.

terraform apply "out.plan"

Terraform will ask to confirm that you want to make the changes.

You have now deployed your resource groups. you can test that the resource group was created. Use terraform show to see the state of your Terraform deployment.

terraform show

Terraform will show the resource it has created.

terraform apply

And you can check it in Azure. The following code returns a list of resource groups with the Project tag set to the project name.

az group list –subscription $SUBSCRIPTION_ID –tag "Project=$PROJECT_NAME"

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The result displays the resource group properties from the Azure CLI.

Terraform deploy response

In this step, you defined the resources, created a plan, and applied the plan into Azure. Next, let’s add resources to create the Log Analytics workspace to monitor the Azure Kubernetes Service (AKS) cluster.

Create Log Analytics workspace using HCL

It a best practice to provide log analytics for your container. To give you visibility into the performance of your cluster, Azure Monitor for containers collects memory and processor metrics from controllers, nodes, and containers that are available in Kubernetes. Container logs are also collected.

This following chart from the Azure documentation shows the various ways metrics and logs are gathered.

To create log analytics resources, use your text editor to add a new HCL file named loganalytics.tf in the same directory.

### For Log Analytics Workspace
variable log_analytics_workspace_prefix {
default = "workspace-"
# refer https://azure.microsoft.com/global-infrastructure/services/?products=monitor for log analytics available regions
variable log_analytics_workspace_location {
default = "Central US"
# refer https://azure.microsoft.com/pricing/details/monitor/ for log analytics pricing
variable log_analytics_workspace_sku {
default = "PerGB2018"

Save the file. Note that in this configuration file, you create a shared resource group and create log analytics workspace and logs for multiple applications to use.

As the final step in this section, validate, create a plan into an file named out.plan, and then apply that plan.

# init
terraform init
# verify
terraform validate
# plan and send the plan to an out.plan file
terraform plan -var project_name=$PROJECT_NAME -out out.plan
# apply the plan from the out.plan file
terraform apply out.plan
terraform show

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The result is that two resources are created in the shared resource group. You can find yours in the Azure portal.

In this step, you created and HCL file configuring the Log Analytics resources, created an out plan, and then applied the plans.

Next, let’s create the Kubernetes cluster.

Create Kubernetes cluster using HCL

You are now ready to create the cluster. This will be take a few steps:

  1. Create a service principal for Azure to use to create the cluster
  2. Add a HCL file to configure the AKS resources
  3. Add a HCL file to define the output from Terraform
  4. Add a HCL variables file for AKS parameters
  5. Validate, plan, and apply the resources

Let’s complete each step.

Step 1. Create the service principal and assign to environment variables. You will send those environment variables into the Terraform plan.

#create service principal for AKS to use
az ad sp create-for-rbac –name "rbac-$PROJECT_NAME" –skip-assignment
# retrieve the appId and the password
AKS_SERVICE_PRINCIPAL=$(az ad sp list –display-name "rbac-$PROJECT_NAME" –query "[].{id:appId, id.password}" –output json)
export TF_VAR_client_id=$(echo $AKS_SERVICE_PRINCIPAL | jq '.appId')
export TF_VAR_client_secret=$(echo $AKS_SERVICE_PRINCIPAL | jq '.password')
export TF_VAR_client_id=$(echo $TF_SERVICEPRINCIPAL | jq '.appId')
export TF_VAR_client_secret=$(echo $TF_SERVICEPRINCIPAL | jq '.password')
# get the public key file location
export TF_VAR_ssh_public_key=$HOME/.ssh/id_rsa.pub

This is a different service principal from the one used in a previous section. The service principal in the previous section gave Terraform permissions to interact with Azure Resource Manager. This one gives the AKS service permission to create resources.

Step 2. To create the cluster add a file named aks.tf in the same folder that contains the Terraform configuration for the cluster. The file provides the configuration for the cluster. Use the following code.

resource "azurerm_kubernetes_cluster" "k8s" {
name = var.cluster_name
location = azurerm_resource_group.rg_aks.location
resource_group_name = azurerm_resource_group.rg_aks.name
dns_prefix = var.dns_prefix
linux_profile {
admin_username = var.admin_name
ssh_key {
key_data = file(var.ssh_public_key)
default_node_pool {
name = "agentpool"
node_count = var.agent_count
vm_size = "Standard_F1"
service_principal {
client_id = var.client_id
client_secret = var.client_secret
addon_profile {
oms_agent {
enabled = true
log_analytics_workspace_id = azurerm_log_analytics_workspace.test.id
tags = {
Environment = var.environment

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Step 3. Next, provide a file that describes the output. The file, output.tf tells Terraform the values to return. It will provide the information you will need to log into the cluster.

output "client_key" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.client_key
output "client_certificate" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.client_certificate
output "cluster_ca_certificate" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.cluster_ca_certificate
output "cluster_username" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.username
output "cluster_password" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.password
output "kube_config" {
value = azurerm_kubernetes_cluster.k8s.kube_config_raw
output "host" {
value = azurerm_kubernetes_cluster.k8s.kube_config.0.host

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The output keyword in HCL specifies the output attributes. The values can be traced from the resource azurerm_kubernetes_cluster.k8s that you created in your resource. The attributes are exported by Terraform. In this case, the values export attributes of the Kubernetes cluster resource. In particular, the values are found in the the kube_config and the kube_config_raw attributes.

Step 4. Next you will want a file that provides the variables. Create a file named var-aks.tf with the following content.

variable "client_id" {}
variable "client_secret" {}
variable "agent_count" {
default = 3
variable "ssh_public_key" {
default = "~/.ssh/id_rsa.pub"
variable "dns_prefix" {
default = "aksdemo"
variable cluster_name {
default = "aksdemo"

Step 5. Validate, plan, and apply the resources. You can either provide the variables for which there is no defined default value, or provide them on the command line when you construction the plan. One of the important variables is the SSH key file location. Let’s set those variables using the environment variables that you created in the first steps. In this case, read in the public ssh key locally.

terraform plan -var project_name=$PROJECT_NAME -var 'client_id=$TF_VAR_client_id' -var 'client_secret=$TF_VAR_client_secret' -var 'ssh_public_key=$TF_VAR_ssh_public_key' -out out.plan

Log into the cluster

Now that we’ve stood up the cluster, let’s log in. The values you need to log in was generated by Step 5 in the previous section where you applied the Terraform configuration to Azure. You need to extract the values that Terraform generated as output and use those data to log in to the cluster.

The following code shows how to get the output using terraform output kube_config, which extracts the value of an output variable from the state file. Next, set the values inside kube_config into a file named azurek8s. Then you can then set an environment variable, KUBECONFIG that kubectl recognizes as containing the secrets needed to log into the cluster.

# extracts the value of an output variable kube_config from the state file
echo "$(terraform output kube_config)" > ./azurek8s
# set the KUBECONFIG to that file
export KUBECONFIG=./azurek8s
# Log into the cluster using the KUBECONFIG data
kubectl get nodes

for more information about the KUBECONFIG environment variable, see Organizing Cluster Access Using kubeconfig Files.

When all goes well, you log into your cluster and see the nodes. At this point you can use kubedtl commands to install and operation your Kubernetes Deployments and Services.

Visualize the dependencies Terraform

Create an SVG file of the Terraform dependencies. You can view the SVG file in your favorite browser.

# install GraphViz
sudo apt install graphviz
# creates a dot file that can be translated by GraphViz
terraform graph | dot -Tsvg > graph.svg
# open graph.svg in your favorite browser

In this tutorial, you used Terraform created a resource group, log analytics workspace, and Kubernetes cluster, and logged into the cluster to see the nodes.

And you learned that Terraform creates a plan that notifies you of destructive changes before you apply the plan.

Next steps