Task 01: Create Azure Local Deployment SPN

DOCUMENT CATEGORY: Runbook SCOPE: Service principal creation for Azure Local deployment automation PURPOSE: Create a dedicated service principal for Azure Local cluster deployment MASTER REFERENCE: Microsoft Learn - Service Principals

Status: Active Applies To: Phase 03 — RBAC Permissions Last Updated: 2026-03-02

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Overview

Create a dedicated service principal (SPN) for Azure Local deployment automation. This SPN is used specifically for Azure Local cluster deployment operations and is separate from any CI/CD service principals.

Elevated Admin Required

This task requires Owner or User Access Administrator permissions at the subscription or tenant level. The deployment SPN cannot be used until RBAC is assigned in Task 02.

Service Principal Details

Attribute	Value
Display Name	sp-azurelocal-deploy
Account Type	Single tenant
Purpose	Azure Local deployment automation
Secret Expiry	12 months (recommended)

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Prerequisites

• Active Azure session with Owner or User Access Administrator role
• Phase 02: Verify Provider Registration completed

SPN May Already Exist

If the deployment SPN already exists in the target environment, the script detects existing SPNs and prompts before creating a new secret. Enter n if the existing secret in the platform Key Vault is still valid.

Variables from variables.yml

Variable	Config Path	Example (IIC)
Subscription ID	azure.subscriptions.lab.id	(per environment)
Key Vault Name	azure_infrastructure.key_vaults.management.name	kv-iic-platform

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Create Deployment Service Principal

Azure Portal

1. Create App Registration

1. Navigate to Microsoft Entra ID → App registrations
2. Click + New registration
3. Configure:

• Name: sp-azurelocal-deploy
• Supported account types: Accounts in this organizational directory only (Single tenant)
• Redirect URI: Leave blank

4. Click Register

2. Record Application Details

After registration, note the following values from the Overview page:

Value	Store In Key Vault As
Application (client) ID	sp-azurelocal-deploy-appid
Directory (tenant) ID	sp-azurelocal-deploy-tenantid

3. Create Client Secret

1. In the app registration, go to Certificates & secrets
2. Click + New client secret
3. Configure:

• Description: Azure Local Deployment Automation
• Expires: 12 months (recommended)

4. Click Add
5. Copy the secret value immediately — it is only shown once

Copy Secret Now

The client secret value is only displayed once. Copy it immediately and store it securely. If you lose it, you must create a new secret.

4. Store Credentials in Key Vault

1. Navigate to your platform Key Vault
2. Go to Secrets → + Generate/Import
3. Create the following secrets:

Secret Name	Value
sp-azurelocal-deploy-appid	Application (client) ID
sp-azurelocal-deploy-secret	Client secret value
sp-azurelocal-deploy-tenantid	Directory (tenant) ID

Validation

• App registration created with name sp-azurelocal-deploy
• Application ID and Tenant ID recorded
• Client secret created and copied
• All credentials stored in Key Vault

Azure CLI / PowerShell

Script

scripts/deploy/02-azure-foundation/phase-03-rbac-permissions/task-01-create-azure-local-deployment-spn/powershell/New-DeploymentServicePrincipal.ps1

Code

# Run from the configs directory
Set-Location C:\git\Azure Local Cloud-docs-azl-toolkit\configs

# Dry run to preview
& "..\scripts\deploy\02-azure-foundation\phase-03-rbac-permissions\task-01-create-azure-local-deployment-spn\powershell\New-DeploymentServicePrincipal.ps1" `
 -ConfigFile ".\config\variables.yml" `
 -WhatIf

# Execute
& "..\scripts\deploy\02-azure-foundation\phase-03-rbac-permissions\task-01-create-azure-local-deployment-spn\powershell\New-DeploymentServicePrincipal.ps1" `
 -ConfigFile ".\config\variables.yml"

Existing SPN Handling

If sp-azurelocal-deploy already exists, the script prompts: Do you want to create a new secret for the existing SPN? (y/n) — enter n to skip if the existing secret is still valid.

Validation

# Verify service principal exists
$spn = Get-AzADServicePrincipal -DisplayName "sp-azurelocal-deploy"
if ($spn) {
 Write-Host "Service principal found: $($spn.DisplayName)" -ForegroundColor Green
 Write-Host " App ID: $($spn.AppId)"
 Write-Host " Object ID: $($spn.Id)"
} else {
 Write-Host "Service principal not found" -ForegroundColor Red
}

Standalone Script

Script

Copy and run this self-contained script. Update the #region CONFIGURATION block with your environment values.

#region CONFIGURATION
# ── Update these values for your environment ──────────────────────────
$SpnDisplayName = "sp-azurelocal-deploy" # IIC default
$SecretDescription = "Azure Local Deployment Automation"
$SecretMonths = 12 # Secret validity in months
$KeyVaultName = "kv-iic-platform-eus-001" # IIC default — platform Key Vault
#endregion CONFIGURATION

#region EXECUTION
Write-Host "`n=== Task 01: Create Azure Local Deployment SPN ===" -ForegroundColor Cyan

# ── Check for existing SPN ────────────────────────────────────────────
$existingSpn = Get-AzADServicePrincipal -DisplayName $SpnDisplayName -ErrorAction SilentlyContinue

if ($existingSpn) {
 Write-Host "[EXISTS] SPN '$SpnDisplayName' already exists (AppId: $($existingSpn.AppId))" -ForegroundColor Yellow
 $createSecret = Read-Host "Create a new secret for the existing SPN? (y/n)"
 if ($createSecret -ne 'y') {
 Write-Host "[SKIP] Using existing SPN and secret." -ForegroundColor Green
 return
 }
 $appId = $existingSpn.AppId
} else {
 # ── Create App Registration ───────────────────────────────────────
 Write-Host "[CREATE] Creating app registration '$SpnDisplayName'..." -ForegroundColor White
 $app = New-AzADApplication -DisplayName $SpnDisplayName -SignInAudience AzureADMyOrg
 $sp = New-AzADServicePrincipal -ApplicationId $app.AppId
 $appId = $app.AppId
 Write-Host "[OK] App Registration created (AppId: $appId)" -ForegroundColor Green
 Write-Host "[OK] Service Principal created (ObjectId: $($sp.Id))" -ForegroundColor Green
}

# ── Create Client Secret ─────────────────────────────────────────────
Write-Host "[CREATE] Generating client secret..." -ForegroundColor White
$endDate = (Get-Date).AddMonths($SecretMonths)
$secret = New-AzADAppCredential -ApplicationId $appId -EndDate $endDate
$secretValue = $secret.SecretText

if (-not $secretValue) {
 Write-Host "[ERROR] Failed to retrieve secret value." -ForegroundColor Red
 exit 1
}
Write-Host "[OK] Client secret created (expires: $endDate)" -ForegroundColor Green

# ── Store Credentials in Key Vault ────────────────────────────────────
Write-Host "[STORE] Saving credentials to Key Vault '$KeyVaultName'..." -ForegroundColor White
$tenantId = (Get-AzContext).Tenant.Id

$secrets = @{
 "sp-azurelocal-deploy-appid" = $appId
 "sp-azurelocal-deploy-secret" = $secretValue
 "sp-azurelocal-deploy-tenantid" = $tenantId
}

foreach ($name in $secrets.Keys) {
 $secureValue = ConvertTo-SecureString $secrets[$name] -AsPlainText -Force
 Set-AzKeyVaultSecret -VaultName $KeyVaultName -Name $name -SecretValue $secureValue | Out-Null
 Write-Host " [OK] $name" -ForegroundColor Green
}

# ── Summary ───────────────────────────────────────────────────────────
Write-Host "`n=== Summary ===" -ForegroundColor Cyan
Write-Host " SPN Display Name : $SpnDisplayName"
Write-Host " Application ID : $appId"
Write-Host " Tenant ID : $tenantId"
Write-Host " Secret Expires : $endDate"
Write-Host " Key Vault : $KeyVaultName"
Write-Host " Secrets Stored : $($secrets.Count)"
Write-Host "`n[DONE] Task 01 complete." -ForegroundColor Green
#endregion EXECUTION

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Troubleshooting

Issue	Cause	Solution
Insufficient privileges	Missing Application Administrator role	Request Entra ID Application Administrator role
Key Vault access denied	Missing Key Vault permissions	Assign Key Vault Secrets Officer role
SPN already exists prompt	SPN was previously created	Enter n to skip — use existing SPN
Secret not in Key Vault	Storage step was skipped	Re-run script or manually store secrets

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Navigation

Previous	Up	Next
Phase 02 — Verify Provider Registration	Phase 03 — RBAC Permissions	Task 02 — Assign RBAC Roles

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Version Control

• Created: 2026-01-15 by Azure Local Cloudnology Team
• Last Updated: 2026-03-02 by Azure Local Cloudnology Team
• Version: 2.0.0
• Tags: azure-local, phase-03, service-principal, entra-id
• Keywords: service principal, sp-azurelocal-deploy, app registration, deployment SPN
• Author: Azure Local Cloudnology Team