Demo: Automating Recommendations from Azure Arc with an AI Agent (full-code approach)

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Last updated: 2026-04-07

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Arc API → Function App → AI Foundry → Logic Apps → Monitoring

• Function App is the central orchestrator for ingestion and enrichment.
• AI Foundry provides decision intelligence.
• Logic Apps executes or escalates actions.
• Monitoring ensures observability and compliance.

Important

Disclaimer: This repository contains example of how to automate the recommendations from Azure Arc by introducing an AI-driven agent that not only ingests and processes recommendations but also:

• Classify & priority-rank each recommendation
• Summarize actionable next steps in natural language
• Decide auto-execute vs human-review paths This is just a guide. It is not an official solution. For official guidance, support, or more detailed information. Please refer RAG with Zero-Trust – Architecture Reference to Microsoft's official documentation or contact Microsoft directly: Microsoft Sales and Support

Category	Components	Purpose
Core Components	- Azure Arc API - Resource Group - Subscription	- Source of recommendations (DR, security, performance, compliance) for on-prem and hybrid assets. - Groups all resources under a single RG and subscription scope.
Data Engineering Pipeline	- Function App Every Function App requires a General-Purpose v2 Storage Account for triggers, state, and logging. - App Service Plan (Consumption/Premium SKU) The App Service Plan can be serverless (Consumption) or a dedicated tier (Premium/Dedicated). - Storage Account (General Purpose v2 for Functions runtime)	Hosts and scales your ingestion/enrichment logic; fetches recommendations and sends them to AI for processing.
AI Layer	AI Foundry	Classifies severity, summarizes actions, prioritizes recommendations, and suggests auto-execute vs manual review.
Automation & Orchestration	Logic Apps	Executes safe actions (DR failover, patching, SQL fixes) or sends Teams/Email approvals for high-risk items.
Monitoring & Governance	- Azure Monitor + Log Analytics Workspace - Power BI	Tracks pipeline health, AI decisions, execution outcomes; visualizes trends, compliance, and automation SLAs.

Overview

The infrastructure sample for this architecture is available in terraform-infrastructure. It provisions the Azure-side resources for the documented workflow, including the Resource Group, Function App dependencies, monitoring, Logic App, Key Vault, SQL, and the AI service account.

Workflow details (Click to expand)

1. Azure Arc API (Source)
   • Acts as the entry point for all recommendations (DR, security, performance, compliance).
   • Provides raw JSON data about advisories from on-prem and hybrid resources.
2. Function App (with App Service Plan + Storage Account): Ingest and process recommendations.
   • Periodically calls Azure Arc API to fetch recommendations.
   • Stores raw data temporarily in the Storage Account.
   • Sends the data to the AI layer for enrichment.
3. AI Foundry: Adds intelligence to the pipeline.
   • Receives raw recommendations from the Function App.
   • Uses LLM models to:
     • Classify severity (High/Medium/Low).
     • Summarize recommendations in plain language.
     • Suggest whether to auto-execute or require manual review.
   • Returns enriched recommendations back to the Function App for storage and orchestration.
4. Logic Apps: Orchestrates actions based on AI decisions.
   • Reads enriched recommendations.
   • If autoExecute = true, triggers automation tasks (e.g., DR failover, patching, SQL index creation).
   • If manualReview = true, sends Teams or email notifications for approval.
5. Monitoring & Governance:
   • Azure Monitor + Log Analytics Workspace:
     • Collects telemetry from Function App, Logic Apps, and AI calls.
     • Tracks pipeline health, execution outcomes, and AI decision logs.
   • Power BI: Connects to Log Analytics or SQL data to visualize.
     • Number of recommendations processed.
     • Auto-executed vs manual approvals.
     • SLA compliance and risk reduction trends.

Refresh Date: 2026-04-07