Infrastructure-as-Code (IaC) is foundational to cloud-native operations, and Azure provides three distinct approaches with different trade-offs. Understanding when to use Terraform, Bicep, or ARM Templates can mean the difference between elegant deployments and operational nightmares at scale.
The IaC Landscape on Azure
Azure offers native and third-party IaC tools:
- ARM Templates: Azure's native JSON-based declarative language
- Bicep: Azure's newer, higher-level abstraction over ARM
- Terraform: HashiCorp's cloud-agnostic IaC platform
ARM Templates: Native Power with Complexity
ARM Templates are Azure's proprietary language for defining infrastructure. They're deeply integrated with Azure, supporting 100% of Azure resource capabilities.
Strengths:
- Native Azure support without abstraction layers
- Deep integration with Azure DevOps and Azure Portal
- Complex conditional logic and function support
- Policy validation at deployment time
Weaknesses:
- Verbose JSON syntax (boilerplate-heavy)
- Steep learning curve
- Limited code reuse without complex linked templates
- Difficult to debug
Example ARM Template (simplified):
json
{
"\$schema": "https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json#",
"contentVersion": "1.0.0.0",
"parameters": {
"vmName": {
"type": "string",
"defaultValue": "myVM"
}
},
"resources": [
{
"type": "Microsoft.Compute/virtualMachines",
"apiVersion": "2021-07-01",
"name": "[parameters('vmName')]",
"location": "[resourceGroup().location]",
"properties": { ... }
}
]
}
Bicep: The Modern Middle Ground
Bicep, introduced in 2021, is Microsoft's answer to ARM Template verbosity. It transpiles to ARM Templates but provides a more human-friendly syntax.
Strengths:
- Cleaner, more readable syntax (closer to HCL)
- Strong Azure-native support
- Excellent tooling and VS Code integration
- Growing community and Microsoft backing
- Simpler module composition
Weaknesses:
- Younger ecosystem (fewer third-party modules)
- Azure-specific (not cross-cloud)
- Smaller community than Terraform
Example Bicep (same resource):
bicep
param vmName string = 'myVM'
param location string = resourceGroup().locationresource virtualMachine 'Microsoft.Compute/virtualMachines@2021-07-01' = {
name: vmName
location: location
properties: { ... }
}
Notice the readability improvement over ARM JSON.
Terraform: The Cross-Cloud Standard
Terraform is cloud-agnostic, allowing organizations to manage multi-cloud infrastructure from a single codebase.
Strengths:
- Works across AWS, Azure, GCP, Kubernetes, etc.
- Excellent community and module ecosystem (Terraform Registry)
- HCL is more intuitive than JSON
- Strong state management and plan/apply workflow
- Mature tooling (Terraform Cloud, Sentinel policies)
Weaknesses:
- State file management complexity
- Not 100% feature parity with Azure (always lags slightly)
- Additional tool to learn and maintain
- Potential provider version compatibility issues
Example Terraform (same resource):
hcl
resource "azurerm_virtual_machine" "example" {
name = var.vm_name
location = azurerm_resource_group.example.location
resource_group_name = azurerm_resource_group.example.name
vm_size = "Standard_B2s" os_profile {
computer_name = var.vm_name
admin_username = "azureuser"
}
}
Decision Matrix
Use ARM Templates if:
- You need 100% Azure API coverage
- Your team is deeply invested in Azure ecosystem
- You prefer native Microsoft tooling
- You have complex policy enforcement requirements
Use Bicep if:
- You want modern Azure-native IaC
- You prefer cleaner syntax over multi-cloud portability
- You're building Azure-only infrastructure
- You want Microsoft's long-term vision for IaC
Use Terraform if:
- You manage multi-cloud infrastructure
- Your team has Terraform expertise
- You need mature ecosystem and community support
- You want standardized workflows across clouds
State Management in Production
For Terraform, state management is critical:
hcl
terraform {
backend "azurerm" {
resource_group_name = "tf-state-rg"
storage_account_name = "tfstate12345"
container_name = "tfstate"
key = "prod.tfstate"
}
}
Never store state files locally in production. Use Azure Storage with encryption and access controls.
Performance Considerations
- Deployment Speed: ARM Templates and Bicep deploy slightly faster (no translation layer)
- Parse Time: Terraform adds 2-5 seconds for plan/apply due to state validation
- Concurrent Deployments: All three support parallel resource creation
Common Pitfalls
1. State File Corruption
Terraform state is fragile. Implement:
- Locking mechanisms (Azure Storage with lease)
- Versioning (keep backups)
- Encryption at rest and in transit
2. Hard-Coded Secrets
Never embed credentials in IaC. Use:
- Azure Key Vault for secret management
- Service principals with minimal permissions
- Managed identities where possible
3. Drift Without Remediation
Drift (manual changes) breaks IaC contracts. Implement:
- Regular compliance scans
- Policy-driven enforcement
- Automated remediation workflows
The Future
Microsoft is clearly investing in Bicep as the future of Azure IaC. If you're starting fresh, Bicep is the safer bet. Terraform remains strong for multi-cloud scenarios.
Sources
Microsoft Learn: ARM Templates Overview