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Let’s simplify how Azure handles network routing and show you a solution to manage your traffic effectively.
Azure uses a method called Longest Prefix Match to decide how to route traffic. When you set up a Virtual Network (VNet), Azure automatically adds hidden system routes covering the entire address space, and these routes direct traffic internally with a next hop labeled “Virtual Network.” Because these system routes are more specific than your custom route of 0.0.0.0/0, Azure will ignore your rule for traffic within the network and instead route packets directly between subnets.
To manage your internal traffic better without having to create a route for every single subnet, you can set up summarized private IP blocks in your route table. These broader address blocks can override the system routes for your entire network. For example, you can include the common private IP ranges like 10.0.0.0/8, 172.16.0.0/12, or 192.168.0.0/16, and point their routes to your virtual appliance. If your VNet uses the 10.x.x.x range, you can use this with your route table to override the default system route.
If your network is growing, consider using a Hub-and-Spoke architecture. This setup places the third-party appliance in a central Hub VNet, with other workloads in separate Spoke VNets. Because Spoke VNets aren’t linked transitively by default, you can attach a route of 0.0.0.0/0 to the spokes, forcing all traffic between them to go through the Hub Virtual Network and your appliance.
When setting up these broad route rules, be careful to avoid routing loops. Make sure not to attach the route table with the large private range to the subnet where your appliance lives. If the appliance subnet tries to route traffic back to itself, it can cause loops and drop data packets. Keep the appliance on its own dedicated route table to prevent this issue.
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