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Ben Coleman for CSE Dev Crews

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Terraform Bootstrap & Backend State in Azure


When starting a new project utilising Terraform to manage resources in Azure, there's usually a hurdle to overcome, where you need to bootstrap your environment with certain pre-reqs. The main one of those being a way hold shared state (what Terraform calls a backend)

To this end I'd like to share a set of scripts & Terraform to help you though this initial bootstrap & setup process

GitHub logo benc-uk / terraform-mgmt-bootstrap

Bootstrap core Azure state & resources using Terraform for use with Azure DevOps

The repo holds some reusable scripts and Terraform configuration to "bootstrap" a project in order to be able to start using Terraform with Azure. This paves the way for the set up of Azure DevOps Pipelines to deploy further resources. This aligns with the common "hub & spoke" style of Azure architecture. where one shared set of management resources are used to support the deployment and management of one or more spokes through automated CI/CD pipelines.

In this case Azure DevOps is the CI/CD system we will be using & configuring

These "spokes" could be separate subscriptions or simply multiple environments in different resource groups for hosting simultaneous instances of an app.

Note. There is no dependency or relation to the hub & spoke network topology

There's four main parts setup up by this process:

  • Bootstrap of backend state in Azure Storage for all Terraform to use.
  • Deployment (and redeployment) set of shared, management resources.
  • Creation of service principals with role assignments in Azure AD.
  • Initial configuration of Azure DevOps

All of the scripts in the repo are intended to be run manually and infrequently, and called from an administrators local machine or Azure Cloud Shell. There is no automation or CI/CD, this is by design - the purpose of this is to provide the bedrock to allow further CI/CD to happen.

Note. This article is not intended as an intro to using Azure and Terraform, so it assumes a fair degree of knowledge in this area.


  • Bash
  • Terraform 0.13+
  • Azure CLI
  • Authenticated connection to Azure, using Azure CLI, logged into the subscription you wish to configure
  • Azure DevOps organization and project
  • An Azure DevOps PAT token (full scope) for the relevant Azure DevOps organization


Before running any of the scripts, the configuration and input variables need to be set. This is done in an .env file, and this file is read and parsed by scripts

Note. .tfvars file is not used, this is intentional. The dotenv format is easier to parse, meaning we can use the values in bash scripts and for other purposes

Copy the .env.sample file to .env and set values for all variables as follows:

  • TF_VAR_state_storage - The name of the storage account to hold Terraform state.
  • TF_VAR_mgmt_res_group - The shared resource group for all hub resources, including the storage account.
  • TF_VAR_state_container - Name of the blob container to hold Terraform state (default: tfstate).
  • TF_VAR_prefix - A prefix added to all resources, pick your project name or other prefix to give the resources unique names.
  • TF_VAR_region - Azure region to deploy all resources into.
  • TF_VAR_azdo_org_url - URL of Azure DevOps org to use, e.g.
  • TF_VAR_azdo_project_name - Name of the Azure DevOps project in the above org.
  • TF_VAR_azdo_pat - Azure DevOps access token with rights to create variable groups and service connections.

Bootstrap of Backend State

As a principal we want all our resources defined in Terraform, including the storage account using by Terraform to hold backend state. This results in a chicken and egg problem.

To solve this a bootstrap script is used which creates the initial storage account and resource group using the Azure CLI. Then Terraform is initialized pointing at this storage account as a backend, and the storage account imported into state

See in the GitHub repo for details

This script should never need running a second time even if the other management resources are modified

Management Resource Deployment

The deployment of the rest of the shared management resources is done via Terraform, and the various .tf files in the root of the repo.

See in the GitHub repo for details

This Terraform creates & configures the following:

  • Resource Group (also in bootstrap).
  • Storage Account for holding Terraform state (also in bootstrap).
  • Azure Container Registry. Not used but intended for providing centralized access to containers.
  • Azure Log Analytics. Not used but intended for log aggregation
  • Key Vault* for holding credentials and secrets used by Azure DevOps Pipelines.
  • Service Principal, with RBAC role assignment to access the KeyVault "Key Vault Reader (preview)".
  • A second Service Principal (to be used for pipelines), with IAM role "Contributor" at the subscription level.
  • KeyVault access policy for above Service Principal to allow it to get & list secrets.
  • KeyVault access policy for the current user to be able to manage secrets.
  • Populates KeyVault with secrets, holding the credential details for the pipeline service principal

You may wish to modify the role assigned to the pipeline service principal

Azure DevOps

The deployment Terraform also sets up some initial configuration in Azure DevOps namely service connection called keyvault-access which will allow variable groups to be linked to the KeyVault.

The creation of a Azure DevOps variable group linked to KeyVault can not be done via Terraform or the Azure CLI. A work-around using cURL and REST API has been used. This is some what brittle but it serves the purpose well enough.

See in the GitHub repo for details

Running this script will create a variable group called shared-secrets in the Azure DevOps project and populate it with four variables

  • pipeline-sp-clientid
  • pipeline-sp-secret
  • azure-tenant-id
  • azure-sub-id

These variables can be used in subsequent Azure DevOps pipelines.

Next Steps & Example Environment

This repo is intended to lay the ground work for Azure DevOps pipelines to be set up to deploy further resources. The shared variable group is a key part of enabling this, but the configuration of those pipelines is something clearly project & environment specific, so is not covered further here.

A working CD pipeline with demo Terraform is given in the example/ directory. This environment is nothing more than a resource group & a storage account for illustrative purposes. The focus is the pipeline file - example/deploy.yaml this carries out the deployment as follows:

  • Uses the above shared-secrets variable group
  • Runs using the service principal details held in Key Vault
  • Keeps state in the management backend state storage account
  • Carries out standard Terraform init / plan / apply

Refer to the example/deploy.yaml file for further details

If you are using a mono-repo, the whole of this repo can be dropped in as a sub-folder, in order to keep the Terraform separate from any Terraform you wish to use in your other pipelines.

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