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Introduction to Azure DevOps Workload identity federation (OIDC) with Terraform

This post has been republished via RSS; it originally appeared at: New blog articles in Microsoft Community Hub.

Welcome! This post is going to cover the end-to-end process of configuring and using Workload identity federation in Azure DevOps for your Terraform deployments. We'll cover:

Why use Workload identity federation

Up until now the only way to avoid storing service principal secrets for Azure DevOps pipelines was to use a self-hosted Azure DevOps agents with managed identities. Now with Workload identity federation we remove that limitation and enable you to use short-lived tokens for authenticating to Azure. This significantly improves your security posture and removes the need to figure out how to share and rotate secrets. Workload identity federation works with many Azure DevOps tasks, not just the Terraform ones we are focussing on in this article, so you can use it for deploying code and other configuration tasks. I encourage you to learn more about the supported tasks here.


What is Workload identity federation and how does it work

Workload identity federation is an OpenID Connect implementation for Azure DevOps that allow you to use short-lived credential free authentication to Azure without the need to provision self-hosted agents with managed identity. You configure a trust between your Azure DevOps organisation and an Azure service principal. Azure DevOps then provides a token that can be used to authenticate to the Azure API.


You can read more about how Workload identity federation works here.


In the first iteration Workload identity federation for Azure DevOps works within the scope of a Service Connection. A new type of Azure Resource Manager Service Connection is available that enables this:

Any task that supports a Service Connection and has been updated to use Workload identity federation can then use your configured trust to interact with Azure resources.


On the Azure side we need to configure Federated Credentials on an App Registration or User Assigned Managed Identity service principal. There are a few settings needed for this, which you can find in the Azure DevOps Service Connection or you can figure out up front:

Here is what it looks like in the Azure Portal:


Once we have the service connection and federated credentials configured, we can use the service connection to authenticate to Azure. You'll just need to grant your service principal some permissions in the subscription.


How can your organisation join the Workload identity federation preview

The preview is open to anyone, you can input the name of your Azure DevOps organisation into this form to sign up. Once signed up, you'll have access to the feature flag and you'll find it under the organisation 'Preview Features' menu. Turn it on and you'll see the new Azure Resource Manager Service Connection types. You can find lots more information here.



How to configure Workload identity federation using the Azure DevOps Terraform provider

The Azure DevOps Terraform provider has been updated to support the creation of Workload identity federation Service Connections. The documentation can be found here.


The following example shows how to setup a Service Connection and User Assigned Managed Identity with Federated Credentials:


terraform { required_providers { azurerm = { source = "hashicorp/azurerm" version = ">=3.0.0" } azuredevops = { source = "microsoft/azuredevops" version = ">= 0.9.0" } } } provider "azurerm" { features {} } resource "azuredevops_project" "example" { name = "Example Project" visibility = "private" version_control = "Git" work_item_template = "Agile" description = "Managed by Terraform" } resource "azurerm_resource_group" "identity" { name = "identity" location = "UK South" } resource "azurerm_user_assigned_identity" "example" { location = azurerm_resource_group.identity.location name = "example-identity" resource_group_name = } resource "azuredevops_serviceendpoint_azurerm" "example" { project_id = service_endpoint_name = "example-federated-sc" description = "Managed by Terraform" service_endpoint_authentication_scheme = "WorkloadIdentityFederation" credentials { serviceprincipalid = azurerm_user_assigned_identity.example.client_id } azurerm_spn_tenantid = "00000000-0000-0000-0000-000000000000" azurerm_subscription_id = "00000000-0000-0000-0000-000000000000" azurerm_subscription_name = "Example Subscription Name" } resource "azurerm_federated_identity_credential" "example" { name = "example-federated-credential" resource_group_name = parent_id = audience = ["api://AzureADTokenExchange"] issuer = azuredevops_serviceendpoint_azurerm.example.workload_identity_federation_issuer subject = azuredevops_serviceendpoint_azurerm.example.workload_identity_federation_subject }


The items of note are:

Once you run this Terraform and create these resources you'll be ready to use the Service Connection in your Azure DevOps Pipeline.


How to use Workload identity federation in an Azure DevOps Pipeline with the Terraform task

We have updated the two most popular Terraform Tasks to support Workload identity federation, these are:

The following example shows how to use the Microsoft DevLabs task in an Azure DevOps Pipeline:


jobs: - deployment: deploy displayName: Deploy with Terraform pool: vmImage: ubuntu-latest environment: dev strategy: runOnce: deploy: steps: - checkout: self displayName: Checkout Terraform Module - task: TerraformInstaller@0 displayName: Install Terraform inputs: terraformVersion: 'latest' - task: TerraformTaskV4@4 displayName: Terraform Init inputs: provider: 'azurerm' command: 'init' workingDirectory: '$(workingDirectory)' backendServiceArm: '${{ variables.serviceConnection }}' backendAzureRmResourceGroupName: '$(BACKEND_AZURE_RESOURCE_GROUP_NAME)' backendAzureRmStorageAccountName: '$(BACKEND_AZURE_STORAGE_ACCOUNT_NAME)' backendAzureRmContainerName: '$(BACKEND_AZURE_STORAGE_ACCOUNT_CONTAINER_NAME)' backendAzureRmKey: 'terraform.tfstate' env: ARM_USE_AZUREAD: true # This environment variable tells the backend to use AzureAD auth rather than trying a create a key. It means we can limit the permissions applied to the storage account and container to least priviledge: - task: TerraformTaskV4@4 displayName: Terraform Apply inputs: provider: 'azurerm' command: 'apply' workingDirectory: '$(workingDirectory)' commandOptions: '-auto-approve -var="resource_group_name=$(AZURE_RESOURCE_GROUP_NAME)"' environmentServiceNameAzureRM: '${{ variables.serviceConnection }}' env: ARM_USE_AZUREAD: true


Right now you are probably thinking "how is this any different to what I do now?" and you'd be right to think that because there is no difference. The Workload identity federation implementation is abstracted away into the choice of Service Connection type. The task knows based on the type of Service Connection how to authenticate to Azure and set the relevant environment variables for you.


If you want to know how you can do it yourself outside of the terraform task, you can see an example of using the Azure CLI task here and here.



We've shown you how to configure and use Workload identity federation for Azure DevOps, we want you to SIGN UP FOR THE PREVIEW and start using it right away.


If you want a more in depth example, you can refer to this sample repository.


Thanks for reading, feel free to ask questions.


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