5 Azure Virtual Machines Security Best Practices

With Real-World Risks, Detailed Best Practices, and Attack Scenarios

Azure Virtual Machines (VMs) are powerful and flexible—but they’re also highly vulnerable if not secured correctly. In this blog, we’ll break down five essential aspects of Azure VM security that every cloud architect, admin, or developer must take seriously.

In this blog, we’ll cover five critical security areas for Azure VMs:

• Permissions
• Updates
• Malware Protection
• Disk Encryption
• Internet Access

Each section explains:

• Why it’s important
• Step-by-step best practices
• What attacks may occur if not secured

1. Permissions: Identity & Access Management (IAM)

Why It Matters:

Permissions control who can access your VMs and what actions they can take. Misconfigured or overly broad access is one of the leading causes of security breaches in cloud environments.

Best Practices:

Use Role-Based Access Control (RBAC): RBAC lets you define what a user or group can do. Instead of giving everyone Owner or Contributor roles (which grant excessive privileges), assign only the permissions required for their job. For instance, a support engineer might only need “Reader” access.

Use Azure Active Directory (AAD): Using AAD for login adds centralized identity management. When combined with Conditional Access, it allows location-based, device-based, and risk-based policies.

Enable Multi-Factor Authentication (MFA): MFA adds a critical second step (like OTP or biometrics) that stops most credential-based attacks—even if passwords are leaked.

Privileged Identity Management (PIM): Instead of granting persistent access to administrators, PIM allows time-limited, approval-based access. This significantly reduces the attack surface.

Use Managed Identities: Applications running on VMs often need to connect to Azure resources like Key Vault or Storage. Managed identities eliminate the need to store secrets or credentials in code.

What Can Go Wrong:

Without RBAC or MFA, anyone with access—even accidentally—can perform destructive actions. For example, a developer with full access could accidentally delete production VMs or storage accounts.

Persistent admin rights make it easier for attackers to elevate privileges once they compromise a user account. And using hardcoded secrets in apps is like leaving keys under the doormat.

Real-World Attacks:

Credential Theft: Attackers often use phishing, malware, or brute-force to obtain user credentials. Without MFA, they can immediately log in and act as legitimate users.

Insider Threats: A disgruntled employee or a contractor with excessive permissions can access and exfiltrate sensitive data or sabotage systems.

Privilege Escalation: An attacker who gains access to a lower-privilege user may exploit permission misconfigurations to gain higher-level access, eventually compromising the entire environment.

2. VM Updates and Patch Management

Why It Matters:

Unpatched VMs are one of the easiest targets for attackers. Exploits for known vulnerabilities are widely available and often automated.

Best Practices:

Use Azure Update Management: This service allows you to automate OS patching across your VMs. You can schedule updates during non-peak hours and monitor compliance centrally.

Patch Regularly: Applying patches weekly or biweekly ensures that your systems are protected from the latest threats. It’s not just about OS patches—application-level patches matter too.

Create Update Rings: Like large enterprises do, test patches in dev/staging before rolling them out to production. This reduces the risk of downtime due to faulty updates.

What Can Go Wrong:

When VMs aren’t patched, known vulnerabilities remain exploitable. Attackers often scan the internet for such outdated systems using automated tools. A single unpatched VM could be exploited to gain access to the entire virtual network.

And in regulated industries, failing to apply critical patches can result in compliance violations—leading to fines and reputational damage.

Real-World Attacks:

WannaCry Ransomware (2017): Exploited a Windows vulnerability that was patched 2 months before the attack. Organizations that didn’t patch were devastated.

ProxyLogon Exploit (2021): Unpatched Microsoft Exchange servers were compromised at scale by attackers who chained vulnerabilities to gain admin-level access.

These attacks caused data loss, operational downtime, and in some cases, total business shutdown.

3. Malware Protection and Endpoint Security

Why It Matters:

VMs connected to the internet or other networks can download malicious files, be exploited by scripts, or spread malware internally.

Best Practices:

Microsoft Defender for Endpoint: This isn’t just antivirus—it includes endpoint detection and response (EDR), which uses behavioral analytics and threat intelligence to detect suspicious activity like ransomware behavior or command-and-control communications.

Real-Time Protection and Updates: Keep antivirus definitions up to date and ensure real-time scanning is always enabled to catch threats immediately.

Scheduled Scans and Defender for Cloud Alerts: Set up daily or weekly scans. Integrate alerts into your SIEM or Azure Monitor to act swiftly.

What Can Go Wrong:

If your VM lacks endpoint protection, a single malicious file can open the floodgates. Without visibility into process behavior or file changes, you won’t know you’re under attack until it’s too late.

Attackers can use malware to encrypt data (ransomware), harvest credentials (keyloggers), or quietly mine cryptocurrency using your VM resources—impacting performance and cost.

Real-World Attacks:

Cryptojacking: Attackers deploy crypto miners to your VM, skyrocketing CPU usage and Azure billing—without being detected for weeks or months.

Ransomware Attacks: Unprotected VMs are encrypted, and attackers demand ransom in Bitcoin. Even with backups, recovery may take weeks.

Botnet Enrollment: Infected VMs become part of massive botnets used to launch DDoS or spam attacks.

4. Disk Encryption

Why It Matters:

If your disk is stolen or cloned, all data can be read unless encrypted. This is a huge compliance and data confidentiality risk.

Best Practices:

Azure Disk Encryption (ADE): Encrypt OS and data disks using BitLocker (for Windows) or DM-Crypt (for Linux). This protects data at rest from unauthorized access.

Azure Key Vault Integration: Store and manage encryption keys securely using Azure Key Vault. You can rotate, revoke, or audit access to keys—ensuring complete control.

Encrypt Snapshots and Backups Too: Attackers may target backups. If they’re not encrypted, data is still at risk—even if your VM is deleted.

What Can Go Wrong:

If disk encryption is skipped, any attacker with access to the VM’s storage account can download the disk, mount it on another system, and read its content—including passwords, logs, and database files.

This is especially dangerous for industries with sensitive data like finance, healthcare, or legal.

Real-World Attacks:

Data Exfiltration from Stolen Snapshots: Unencrypted disks are exported via scripts, and sensitive files like web.config, database files, and API secrets are extracted.

Compliance Breaches: Companies failing to encrypt disks are penalized under GDPR, HIPAA, or PCI DSS regulations.

5. Internet Access and Network Security

Why It Matters:

Public internet exposure is the biggest risk to VMs. Even with secure software, exposed ports like SSH and RDP are constantly scanned by attackers.

Best Practices:

Avoid Public IPs: Use private IPs for your VMs and connect via Azure Bastion or a secure VPN gateway. Public IPs make you a target.

Network Security Groups (NSGs): NSGs act like firewalls at the VM or subnet level. Allow only required ports (e.g., block all except 443/80/22/3389 where needed).

Just-in-Time (JIT) Access: JIT access allows opening ports like RDP or SSH only when needed, for a limited time, and for specific IPs.

Azure Firewall & WAF: Use these to control and inspect outbound and inbound traffic. They help detect threats like SQL injection, XSS, or brute-force attempts.

What Can Go Wrong:

If a VM has a public IP with an open RDP or SSH port, it will be scanned and attacked—often within minutes. Bots continuously crawl the internet for exposed ports.

Even outbound traffic, if unmonitored, can leak sensitive data or let malware contact command servers.

Real-World Attacks:

Brute-force Attacks on RDP: Thousands of bots attempt username/password combinations on open ports. Once logged in, they disable security tools and deploy ransomware.

Log4Shell Exploits: Internet-facing apps vulnerable to Log4Shell allowed attackers to run code remotely and take full control of servers.

DDoS Attacks: Without proper NSGs or firewalls, attackers flood your VMs with traffic, taking them offline and causing service disruptions.

Microsoft’s official documentation, Click here:

Final Summary: Security Checklist

Final Thoughts: 5 Azure Virtual Machines Security Best Practices

Securing Azure Virtual Machines is not a one-time task—it’s a continuous practice. By understanding the “why” behind each control and learning from real-world attacks, you’re better equipped to defend your environment.

Start with a review of your current VM estate. Are you following these five pillars? What’s missing? Taking action now can prevent devastating security incidents later.