Transforming scientific discovery with Microsoft Azure and NVIDIA

From startups to industry-leading enterprises, there is an insatiable desire for organizations to experiment with the idea of how the world could work differently. They explore bold, new ways for society to operate and meet market demand by focusing their efforts on developing innovative products and services. With 78% of companies using AI in at least one business function,1 we’re now seeing AI adopted by organizations of every size and sector around the world. And startups that use AI have been reported to obtain funding 2.5 times more quickly than those without it.2

Organizations use AI as catalysts for change—taking risks, challenging the status quo, scaling niche ideas, and reshaping entire industries. In season 1 of the Catalyst series, the possibilities unfold through the lens of three startups using Microsoft Azure infrastructure and NVIDIA’s domain-specific models and accelerated computing technologies to advance science, health, and technology. From digital twins to drug discovery, meet the companies driving social and scientific progress through new methods that amplify human ingenuity and skill. 

Watch The Catalyst Series

Pangaea Data helps doctors close care gaps with AI 

Diagnosing and treating health conditions, whether rare or prevalent, can be difficult for doctors and patients because patient records can span hundreds of pages long and clinicians have limited time to thoroughly review them, resulting in information remaining buried within them and patients being missed. Helping clinicians identify optimal clinical pathways faster leads to better care and improved patient outcomes. Pangaea Data set out to close care gaps by applying AI configured on clinical guidelines to emulate the process clinicians use to review electronic health records. This helps to find untreated and under-treated patients across hard-to-diagnose conditions at the point of care, without disrupting clinicians’ existing workflows.

For example, the UK’s National Health Service (NHS) applied Pangaea’s platform to identify six times more untreated and under-treated patients with the hard-to-diagnose condition, cancer cachexia, which can help halve the cost of treatment. Similarly, a US health system deployed Pangaea’s platform to recognize $9 million in additional revenue each year by closing care gaps for only one condition. 

Pangaea’s platform runs on Microsoft Azure‘s globally compliant and secure cloud infrastructure and is integrated with NVIDIA’s comprehensive AI stack. By combining high-performance GPU-accelerated computing with optimized software frameworks and tools, Pangaea’s platform delivers timely and dependable insights trusted by clinicians and health care providers. This helps ensure equitable patient care and helps improves outcomes in a financially sustainable and scalable manner. 

You’ve got to make sure that information is delivered to the physician in a compliant manner. And this is where Azure does a phenomenal job. The fact that they have already done the groundwork to be compliant across all different countries and territories. It immediately instills that confidence that you are a known entity, a trusted entity, beyond just the technology.
–Vibhor Gupta, PhD, Founder and CEO of Pangaea Data

Basecamp Research connects biotechnology with biodiversity 

Basecamp Research sees nature as the key to scientific discovery. They have built one of the world’s largest biological databases to support life science researchers and companies working on drug discovery, product development, and biological research. This database of more than 10 billion novel proteins includes valuable tools such as gene editing proteins that have been collected from diverse natural environments around the world. The dataset is then used to train AI models, like Evolutionary Scale Modeling (ESM), that can help identify new targets, design novel proteins, and predict metabolic pathways, supporting faster development of innovative medicines and biological products.

AI has enabled Basecamp Research to set new benchmarks in control, novelty, and efficiency. Increasing their database’s annual growth rate tenfold required scalable computing resources, advanced models, and extensive data. By using Microsoft Azure infrastructure to operate their models and employing NVIDIA’s BioNeMo framework for training, they significantly increased operational speed and achieved scalability.

We’ve been leveraging Azure for this quite a lot, leveraging Azure Kubernetes Services (AKS) and the container registry to orchestrate this and to basically massively scale these annotation pipelines. NVIDIA comes in at the next stage when it comes to utilizing these datasets for model training.
–Glen Gowers, Co-Founder of Basecamp Research

Global Objects digitizes physical artifacts across industries

Microsoft sees AI digital twins as a foundational technology with many applications that can help bridge the physical and digital worlds. Digital twins provide virtual replicas of physical assets and systems, whether it’s a piece of artwork in a gallery, a prop in a film, or a simulation that can be used to expedite the production process in manufacturing. Global Objects shared how they’re using advanced AI and 3D scanning technologies to create photorealistic digital twins of props and objects across different locations. The company aimed to address the challenge of producing high-quality photorealistic content and fill that gap by training AI to map physical environments in the highest fidelity dataset with precision.

By blending artistic skills with advanced technology, they were able to make an authentic digital version of novel objects in the cloud. To accomplish this, they gathered a large subset of data about random objects to help generate new content that accurately replicates the exact specifications of each object digitally. Digitization of the objects can be used for not just preserving art or making films, but also creating new products and services across gaming, robotics, and healthcare.

The most important thing around all of this is processing. The files, the size, the speed by which we’re operating all require the best systems, servers, operators, GPUs that are in the market today. The relationship with Microsoft and NVIDIA is so powerful not only for us learning internally on our own systems and operations but engaging with our clients and ensuring we always have uptime, ensuring that we can always deliver with the most speed, efficiency, and fidelity as possible.
–Jesse Redniss, Chief Strategy Officer of Global Objects

Become a catalyst for change with Microsoft Azure and NVIDIA

Microsoft and NVIDIA offer industry-leading development tools, frameworks, and pre-trained models that are designed to support developers, researchers, and business leaders alike. By combining Azure’s trusted cloud foundation with NVIDIA’s cutting-edge compute capabilities, companies can deploy AI faster, iterate smarter, and stay ahead of the competition. The examples you’ve seen today are catalysts for a more inclusive and intelligent future, driving progress across diverse fields and industries. Watch The Catalyst Series.

Learn more about Azure AI infrastructure

1 McKinsey, The state of AI: How organizations are rewiring to capture value, March 12, 2025.

2 Crunchbase, The state of startups in mid-2025 in 8 charts: Global funding and M&A surge as AI fervor continues, July 22, 2025.

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Protecting Azure Infrastructure from silicon to systems

At Microsoft, secure design begins at the foundation of our computing stack—the silicon level—and extends through every layer of the cloud. Since launching the Secure Future Initiative (SFI)—a company-wide commitment to security, we continue to prioritize delivering products and solutions that are secure by design, secure by default, and secure in operation.

SFI sits at the core of Azure’s approach to designing hardware systems, reshaping the architecture, deployment, and operations of our physical cloud and AI infrastructure. Azure is redefining workload security from the datacenter to the edge. Our comprehensive approach includes Azure Boost, which isolates control and data planes for virtual machines; the Azure Integrated HSM, a custom security chip providing FIPS 140-3 Level 3 key protection within our servers; and confidential computing, which protects data in-use through hardware-based trusted execution environments (TEEs). 

Microsoft has also made ongoing efforts to advance systematic security audits and contribute to the open-source community through Caliptra—a silicon root-of-trust designed to anchor security in hardware. Combining these initiatives with technologies such as confidential computing and code transparency services, our aim is to ensure that every component in the supply chain can be securely verified. 

Figure 1: Building blocks of Azure’s hardware security Architecture .

Purpose built silicon for defense-in-depth 

Azure Boost serves as the system’s security controller, managing secure access to Azure. Only systems with a verified and approved security configuration are granted access. 

To enhance security and performance, Azure Boost offloads control plane services from the host CPU to a dedicated Azure Boost system controller. This setup creates a hardware separation  between Azure’s control plane—running on the Azure Boost controller—and customer workloads—running on the CPU—ensuring strong isolation and protection.

Azure Integrated HSM is a server local Hardware Security Module (HSM) for high-assurance workloads. It is designed to meet the stringent requirements of the Federal Information Processing Standards (FIPS) 140-3 Level 3 security requirements, requiring strong isolation, tamper-resistant hardware, identity-based authentication, and automatic zeroization. Azure Integrated HSM protects keys in-use, by ensuring keys always remain within the bounds of the HSM. 

Unlike centralized remote HSM services, Azure Integrated HSM eliminates network roundtrips for key operations and avoids the need to release keys into the workload environment. Instead of relying on remote access, the Azure Integrated HSM is securely bound to the local workload and provides oracle-style key usage to authorized services within the local environment. 

Learn more about Azure Integrated HSM

Azure Datacenter Secure Control Module (DC-SCM)—DC-SCM is a security and server control module that contains Hydra—a security-focused Board Management Controller (BMC) design, with an integrated root-of-trust and hardware-based security protection on all management interfaces. This root of trust restricts unauthorized access to BMC firmware and ensures the firmware is authenticated and cryptographically measured. 

Confidential Computing offers a spectrum of guarantees

Confidential computing makes use of hardware-based Trusted Execution Environments (TEEs) to protect workloads—such as virtual machines—from other system software, including the hypervisor. 

Microsoft, a founding member of the Confidential Computing Consortium, works closely with CPU and GPU manufacturers to design and integrate confidential computing technologies directly into their hardware. Earlier this year at the Confidential Computing Summit we defined a spectrum of guarantees users can enable with confidential computing when they port their applications, including:  

On by default, is the lift and shift existing applications with minimal change.   

Build in confidential computing by designing services and applications that make deeper use of hardware-based protections.

Leverage transparent confidential computing to gain deeper insights into how confidential services interact and operate securely.

Figure 2. Confidential Computing—Spectrum of Guarantees.

Azure has the most comprehensive portfolio of confidential computing solutions, including confidential virtual machines, containers, generative AI, and services like Azure Confidential Ledger, Azure Attestation, and Managed HSM—each designed to protect code and data throughout its lifecycle using hardware-backed security. 

Hardware Security Transparency

Caliptra is a hardware root of trust that plays a critical role in securing devices. It anchors the chain of trust directly in silicon, establishing foundational security properties that support the integrity of higher-level features. This foundation provides workloads the ability to verify the code and configuration of the underlying platform, enabling workloads establish trust in the hardware platform. 

Caliptra is a fully open-source silicon root of trust developed through a collaboration between Microsoft, AMD, Google, and NVIDIA. In April, we released Caliptra 2.0, which included Adams Bridge—an open-source accelerator designed for post-quantum resilient cryptography. This integration made Caliptra the first open-source root of trust to feature hardened post-quantum cryptography, driving broader adoption across the hardware ecosystem. 

Systematic Security Reviews play a critical role in protecting hardware infrastructure, which relies on both low-level hardware features and the firmware that runs on top of them. Ensuring firmware security involves rigorous code scanning, continuous security reviews, and hardware-based attestation. 

Historically, Microsoft conducted these reviews internally. To enhance transparency and extend security assurance beyond Microsoft, we partnered with Google and the Open Compute Project in 2023 to establish OCP SAFE—a framework for systematic security reviews.

Under OCP SAFE, approved Security Review Providers (SRPs) perform independent evaluations and issue verifiable endorsements of a manufacturer’s security compliance. These endorsements serve as trusted evidence, supporting secure device attestations and reinforcing confidence in the hardware supply chains. 

Enhancing security with Code Transparency Services

Code Transparency Services (CTS) is an immutable ledger technology built to meet the standards of Supply Chain Integrity, Transparency, and Trust (SCITT). It operates exclusively within confidential computing environments, enhancing trust in Azure’s hardware and firmware by ensuring that every component is verifiably secure .

CTS addresses key challenges in firmware provenance, integrity, and auditability across both first-party and third-party supply chains. When paired with a silicon root of trust like Caliptra, and supported by audits such as OCP-SAFE, CTS ensures that hardware and firmware are authorized, non-repudiable, and immutably auditable. 

Today, CTS is a central component in Azure’s confidential cloud services. In addition to Azure’s own usage, CTS will be available as a managed service—allowing Azure customers to create and operate their own transparency service instances. 

Staying secure with Microsoft

Microsoft’s Secure Future Initiative (SFI) provides a guiding framework for building secure and trustworthy cloud infrastructure. By embedding security into every layer—from silicon to systems to services—Azure takes a defense-in-depth approach to cloud security. Through innovations like Azure Boost, Azure Integrated HSM, and confidential computing, and through collaborative efforts such as Caliptra, OCP SAFE, and SCITT, Microsoft is not only securing today’s workloads but also laying the foundation for a more secure and transparent future. 

Azure Boost
Explore next-generation Azure infrastructure.

Learn more >

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Microsoft is a Leader in the 2025 Gartner® Magic Quadrant™ for Cloud-Native Application Platforms 

We’re proud to announce that Microsoft has been named a Leader in the 2025 Gartner® Magic Quadrant™ for Cloud-Native Application Platforms for a second year in a row, and the furthest to the right in Completeness of Vision. We believe this recognition reflects our continued product innovation, seamless developer experience, and AI leadership. Enabling customers to innovate faster with cloud-native apps and AI agents.

As AI reshapes the application landscape, Microsoft continues to lead with a comprehensive application platform that spans web apps, APIs, event-driven applications, serverless functions, containers, and AI agents backed by global scale and deep enterprise expertise. We’re committed to helping developers and customers innovate with AI while delivering scalable, cost-efficient operations for organizations of all sizes.

Read more about Magic Quadrant for Cloud-Native Application Platforms

A developer-first experience, built for productivity 

We continue to invest deeply in improving the developer experience across our application platform—offering choice, simplicity, and integration at every layer. Whether customers are building with containers, functions, APIs, or web frameworks, Azure provides a seamless and productive environment to accelerate from idea to impact. Azure offers: 

Azure App Service: An enterprise-grade platform-as-a-service (PaaS) for web apps with support for language runtimes across .NET, Java, Node.js, Python, PHP, Windows, and Linux containers, custom domain management, and deep integration with GitHub and DevOps pipelines.

Azure Container Apps: A serverless container service ideal for microservices and event-driven workloads, now enhanced with scaling improvements, serverless GPU support, and Azure AI Foundry integration. 

Azure Functions: A powerful serverless compute platform for event-driven architectures. We recently added enhanced performance with the Flex Consumption plan, .NET 8 remote MCP server support, and improved support for long-running durable workflows. 

Azure Static Web Apps: A managed service for building full stack web applications with frameworks like React, Vue, Angular, and Blazor with fully managed global distribution of static content. 

Agentic DevOps: All of these are services are integrated with GitHub Copilot and Visual Studio. GitHub Copilot has transformed the way we code, which is why 20 million developers rely on it to build faster. 50 million developers are actively using Visual Studio and Visual Studio Code each month. With Agentic DevOps using GitHub Copilot and Azure SRE Agent, developers can seamlessly go from code to cloud scale faster, accelerating every stage of their application lifecycle. 

Powering the next wave of AI-native apps 

AI is fundamentally changing how software is built and experienced. From personalized digital experiences to autonomous agents, applications increasingly rely on embedded intelligence, real-time inference, and orchestration of complex workflows.

Microsoft is leading the way in AI innovation with Azure AI Foundry—unifying agents, models, and tools with built-in enterprise-readiness capabilities such as tracing, monitoring, and evaluations. Azure AI Foundry offers a rich catalog of AI models such as OpenAI’s GPT-5, GPT-4o, Meta’s Llama, Microsoft’s Phi-4, and more. AI Foundry integrates with our application platform services like Azure Container Apps and Azure Functions to enable developers to build agentic applications using composable, event-driven, and containerized building blocks. 

In the past year, we introduced key innovations across our application platform to make Azure the home for AI-native applications: 

Azure Container Apps Serverless GPUs let customers run AI model inference on demand without managing infrastructure. Serverless GPUs help teams scale generative AI and workloads with ease and cost efficiency. 

Dynamic sessions in Azure Container Apps offer secure, on-demand, sandboxed compute environments, ideal for large language model (LLM) generated code, AI agents, and ephemeral workloads. 

Azure Container Apps integration with Azure AI Foundry lets customers deploy models from the Foundry model catalog directly to Azure Container Apps, simplifying the model deployment experience. 

Sidecars in Azure App Service simplify AI-native app deployment by integrating small language model (SLM) model hosting, routing, and scaling in existing web apps. 

By combining apps, data, and AI in a single platform, Azure enables organizations to build and scale the next generation of intelligent, adaptive applications. 

Built to scale securely and cost effectively 

Applications need to do more than run, they must scale, perform reliably, and remain cost-effective. Azure is designed to meet the demands of enterprises and startups alike with built-in capabilities that reduce operational overhead and improve efficiency. Recent enhancements include: 

Azure App Service Premium v4 plan (public preview) brings a next-generation, fully managed PaaS experience on both Windows and Linux with superior performance, scalability, and cost efficiency powered by modern Azure hardware. It’s built to reduce total cost of ownership, with early testing showing up to 24% savings for Windows web apps compared to the previous Premium v3 tier. 

Azure Functions Flex Consumption offers concurrency‑based scaling, instantaneous scale‑from‑zero up to 1,000 instances with no cold starts via the “Always Ready” feature, and seamless virtual network integration. 

App Service plans with 2+ instances automatically support Availability Zones without extra set up, while still maintaining a 99.99% SLA. Support for regions with two zones, enhanced zone visibility, and mutable zone redundancy settings further simplify deployment and reduce costs. 

Customers are innovating with Azure’s application platform 

We’re honored by this recognition and thankful for the trust our customers and partners place in us. Their innovation and feedback continue to drive our roadmap and our mission. Here are just a few examples of that innovation in practice. 

Coca‑Cola leveraged Azure AI Foundry and Azure application services to build a custom, real‑time conversational “Santa” AI model that interacted with over one million people across 43 markets in 26 languages—launching the immersive “Create Real Magic” holiday campaign in just 60 days. The initiative showcased how the company’s multi‑phase migration to an AI‑ready Azure platform enabled rapid innovation through scalable services like Azure AI Speech, Functions, and Container Apps. 

Medigold Health migrated its applications to Azure App Service and adopted Azure OpenAI Service, along with Azure Cosmos DB and Azure SQL Database, to automate clinicians’ report generation and significantly cut down administrative effort. This transformation led to a 58% increase in clinician retention and greatly improved job satisfaction and workflow efficiency. 

The NFL enhanced its Combine App with a real‑time conversational AI assistant, powered by Azure OpenAI Service, Azure Container Apps, and Azure Cosmos DB, enabling scouts and coaches to ask natural‑language questions and receive fast, accurate player insights while drills are still underway. This innovation eliminated hours of manual data crunching, turning it into instantaneous “grab‑and‑go” insights, transforming talent evaluation during the Combine event. 

Audi AG used Azure AI Foundry, Azure App Service, and Azure Cosmos DB to rapidly deploy secure, scalable AI assistants that addressed urgent HR needs. The project delivers fast, modular access to information, earning leadership and employee confidence. Audi is moving from experimentation to operational AI, ready for deeper system integration and next-gen capabilities like multi-agent orchestration. 

As AI transforms the application landscape, Microsoft is committed to helping customers build what’s next with speed, intelligence, and resilience. 

Learn more about Azure

Explore Azure App Service, Azure Container Apps, and Azure Functions. 

Get started building with AI App Templates. Edit and deploy to Azure using Visual Studio Code or GitHub Codespaces. 

Get expert guidance from skilled Microsoft partners through the new Azure Accelerate program. 

Gartner, Magic Quadrant for Cloud-Native Application Platforms, By Tigran Egiazarov, Mukul Saha, Prasanna Lakshmi Narasimha, 4 August 2025. 

*Gartner is a registered trademark and service mark and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. 

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request here. 

Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 
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Microsoft’s open source journey: From 20,000 lines of Linux code to AI at global scale

Microsoft’s engagement with the open source community has transformed the company from a one-time skeptic to now being one of the world’s leading open source contributors. In fact, over the past three years, Microsoft Azure has been the largest public cloud contributor (and the second largest overall contributor) to the Cloud Native Computing Foundation (CNCF). So, how did we get here? Let’s look at some milestones in our journey and explore how open-source technologies are at the heart of the platforms powering many of Microsoft’s biggest products, like Microsoft 365, and massive-scale AI workloads, including OpenAI’s ChatGPT. Along the way, we have also introduced and contributed to several open-source projects inspired by our own experiences, contributing back to the community and accelerating innovation across the ecosystem.  

Innovate faster with open source on Azure

Embracing open source: Key milestones in Microsoft’s journey

2009—A new leaf: 20,000 lines to Linux. In 2009, Microsoft contributed more than 20,000 lines of code to the Linux kernel, initially Hyper‑V drivers, under General Public License, version 2 (GPLv2). It wasn’t our first open source contribution, but it was a visible moment that signaled a change in how we build and collaborate. In 2011, Microsoft was in the top 5 companies contributing to Linux. Today, 66% of customer cores in Azure run Linux.

2015—Visual Studio code: An open source hit. In 2015, Microsoft released Visual Studio Code (VS Code), a lightweight, open-source, cross-platform code editor. Today, Visual Studio and VS Code together have more than 50 million monthly active developers, with VS Code itself widely regarded as the most popular development environment. We believe AI experiences can thrive by leveraging the open-source community, just as VS Code has successfully done over the past decade. With AI becoming an integral part of the modern coding experience, we’ve released the GitHub Copilot Chat extension as open source on GitHub.

2018—GitHub and the “all-in” commitment. In 2018, Microsoft acquired GitHub, the world’s largest developer community platform, which was already home to 28 million developers and 85 million code repositories. This acquisition underscored Microsoft’s transformation. As CEO Satya Nadella said in the announcement, “Microsoft is all-in on open source… When it comes to our commitment to open source, judge us by the actions we have taken in the recent past, our actions today, and in the future.” In the 2024 Octoverse, GitHub reported 518 million public or open-source projects, over 1 billion contributions in 2024, about 70,000 new public or open-source generative AI projects, and about a 59% year-over-year surge in contributions to generative AI projects. 

Open source at enterprise scale: Powering the world’s most demanding workloads 

Open-source technologies, like Kubenetes and PostgreSQL, have become foundational pillars of modern cloud-native infrastructure—Kubernetes is the second largest open-source project after Linux and now powers millions of containerized workloads globally, while PostgreSQL is one of the most widely adopted relational databases. Azure Kubernetes Service (AKS) and Azure’s managed Postgres take the best of these open-source innovations and elevate them into robust, enterprise-ready managed services. By abstracting away the operational complexity of provisioning, scaling, and securing these platforms, AKS and managed PostgreSQL lets organizations focus on building and innovating. The combination of open source flexibility with cloud-scale reliability allows services like Microsoft 365 and OpenAI’s ChatGPT to operate at massive scale while staying highly performant.

COSMIC: Microsoft’s geo-scale, managed container platform powers Microsoft 365’s transition to containers on AKS. It runs millions of cores and is one of the largest AKS deployments in the world. COSMIC bakes in security, compliance, and resilience while embedding architectural and operational best practices into our internal services. The result: drastically reduced engineering effort, faster time-to-market, improved cost management, even while scaling to millions of monthly users around the world. COSMIC uses Azure and open-source technologies to operate at planet-wide scale: Kubernetes event-driven autoscaling (KEDA) for autoscaling, Prometheus, and Grafana for real-time telemetry and dashboards to name a few.

OpenAI’s ChatGPT: ChatGPT is built on Azure using AKS for container orchestration, Azure Blob Storage for user and AI-generated content, and Azure Cosmos DB for globally distributed data. The scale is staggering: ChatGPT has grown to almost 700 million weekly active users, making it the fastest-growing consumer app in history.1 And yet, OpenAI operates this service with a surprisingly small engineering team. As Microsoft’s Cloud and AI Group Executive Vice President Scott Guthrie highlighted at Microsoft Build in May, ChatGPT “needs to scale … across more than 10 million compute cores around the world,” …with approximately 12 engineers to manage all that infrastructure. How? By relying on managed platforms like AKS that combine enterprise capabilities with the best of open source innovation to do the heavy lifting of provisioning, scaling, and healing Kubernetes clusters across the globe. 

Consider what happens when you chat with ChatGPT: Your prompt and conversation state are stored in an open-source database (Azure Database for PostgreSQL) so the AI can remember context. The model runs in containers across thousands of AKS nodes. Azure Cosmos DB then replicates data in milliseconds to the datacenter closest to the user, ensuring low latency. All of this is powered by open-source technologies under the hood and delivered as cloud services on Azure. The result: ChatGPT can handle “unprecedented” load—over one billion queries per day, without a hitch, and without needing a giant operations team. 

Deploy containers on Azure Kubernetes Service

What Azure teams are building in the open

At Microsoft, our commitment to building in the open runs deep, driven by engineers across Azure who actively shape the future of open-source infrastructure. Our teams don’t just use open-source technologies, they help build and evolve them.  

Our open-source philosophy is straightforward: we contribute upstream first and then integrate those innovations into our downstream products. To support this, we play a pivotal role in upstream open-source projects, collaborating across the industry with partners, customers, and even competitors. Examples of projects we have built or contributed to include:  

Dapr (Distributed Application Runtime): A CNCF-graduated project launched by Microsoft in 2019, Dapr simplifies cloud-agnostic app development with modular building blocks for service invocation, state, messaging, and secrets.

Radius: A CNCF Sandbox project that lets developers define application services and dependencies, while operators map them to resources across Azure, AWS, or private clouds—treating the app, not the cluster, as the unit of intent.

Copacetic: A CNCF Sandbox tool that patches container images without full rebuilds, speeding up security fixes—originally built to secure Microsoft’s cloud images.

Dalec: A declarative tool for building secure OS packages and containers, generating software bill of materials (SBOMs) and provenance attestations to produce minimal, reproducible base images.

SBOM Tool: A command line interface (CLI) for generating SPDX-compliant SBOMs from source or builds—open-sourced by Microsoft to boost transparency and compliance.

Drasi: A CNCF Sandbox project released in 2024, Drasi reacts to real-time data changes using a Cypher-like query language for change-driven workflows. 

Semantic Kernel and AutoGen: Open-source frameworks for building collaborative AI apps—Semantic Kernel orchestrates large language models (LLMs) and memory, while AutoGen enables multi-agent workflows.

Phi-4 Mini: A compact 3.8 billion-parameter AI model released in 2025, optimized for reasoning and mathematics on edge devices; available on Hugging Face.

Kubernetes AI Toolchain Operator (KAITO): A CNCF Sandbox Kubernetes operator that automates AI workload deployment—supporting LLMs, fine-tuning, and retrieval-augmented generation (RAG) across cloud and edge with AKS integration. 

KubeFleet: A CNCF Sandbox project for managing applications across multiple Kubernetes clusters. It offers smart scheduling, progressive deployments, and cloud-agnostic orchestration. 

This is just a small sampling of some of the open-source projects that Microsoft is involved in—each one sharing, in code, the lessons we’ve learned from running systems at a global scale and inviting the community to build alongside us.  

Open Source + Azure = Empowering the next generation of innovation

Microsoft’s journey with open source has come a long way from that 20,000-line Linux patch in 2009. Today, open-source technologies are at the heart of many Azure solutions. And conversely, Microsoft’s contributions are helping drive many open-source projects forward—whether it’s commits to Kubernetes; new tools like KAITO, Dapr, and Radius; or research advancements like Semantic Kernel and Phi-4. Our engineers understand that the success of end user solutions like Microsoft 365 and ChatGPT rely on scalable, resilient platforms like AKS—which in turn are built on and sustained by strong, vibrant open source communities. 

Join us at Open Source Summit Europe 2025

As we continue to contribute to the open source community, we’re excited to be part of Open Source Summit Europe 2025, taking place August 25–27. You’ll find us at booth D3 with live demos, in-booth sessions covering a wide range of topics, and plenty of opportunities to connect with our Open Source team. Be sure to catch our conference sessions as well, where Microsoft experts will share insights, updates, and stories from our work across the open source ecosystem. 

1 TechRepublic, ChatGPT’s On Track For 700M Weekly Users Milestone: OpenAI Goes Mainstream, August 5, 2025.

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Quelle: Azure

Agent Factory: Building your first AI agent with the tools to deliver real-world outcomes

This blog post is the second out of a six-part blog series called Agent Factory which will share best practices, design patterns, and tools to help guide you through adopting and building agentic AI.

Tools are defining the next wave of agentic AI

In the previous blog, we explored five common design patterns of agentic AI—from tool use and reflection to planning, multi-agent collaboration, and adaptive reasoning. These patterns show how agents can be structured to achieve reliable, scalable automation in real-world environments.

Across the industry, we’re seeing a clear shift. Early experiments focused on single-model prompts and static workflows. Now, the conversation is about extensibility—how to give agents a broad, evolving set of capabilities without locking into one vendor or rewriting integrations for each new need. Platforms are competing on how quickly developers can:

Integrate with hundreds of APIs, services, data sources, and workflows.

Reuse those integrations across different teams and runtime environments.

Maintain enterprise-grade control over who can call what, when, and with what data.

The lesson from the past year of agentic AI evolution is simple: agents are only as capable as the tools you give them—and only as trustworthy as the governance behind those tools.

Develop agentic AI in Azure AI Foundry

Extensibility through open standards

In the early stages of agent development, integrating tools was often a bespoke, platform-specific effort. Each framework had its own conventions for defining tools, passing data, and handling authentication. This created several consistent blockers:

Duplication of effort—the same internal API had to be wrapped differently for each runtime.

Brittle integrations—small changes to schemas or endpoints could break multiple agents at once.

Limited reusability—tools built for one team or environment were hard to share across projects or clouds.

Fragmented governance—different runtimes enforced different security and policy models.

As organizations began deploying agents across hybrid and multi-cloud environments, these inefficiencies became major obstacles. Teams needed a way to standardize how tools are described, discovered, and invoked, regardless of the hosting environment.

That’s where open protocols entered the conversation. Just as HTTP transformed the web by creating a common language for clients and servers, open protocols for agents aim to make tools portable, interoperable, and easier to govern.

One of the most promising examples is the Model Context Protocol (MCP)—a standard for defining tool capabilities and I/O schemas so any MCP-compliant agent can dynamically discover and invoke them. With MCP:

Tools are self-describing, making discovery and integration faster.

Agents can find and use tools at runtime without manual wiring.

Tools can be hosted anywhere—on-premises, in a partner cloud, or in another business unit—without losing governance.

Azure AI Foundry supports MCP, enabling you to bring existing MCP servers directly into your agents. This gives you the benefits of open interoperability plus enterprise-grade security, observability, and management. Learn more about MCP at MCP Dev Days.

The enterprise toolchain in Azure AI Foundry

Once you have a standard for portability through open protocols like MCP, the next question becomes: what kinds of tools should your agents have, and how do you organize them so they can deliver value quickly while staying adaptable?

In Azure AI Foundry, we think of this as building an enterprise toolchain—a layered set of capabilities that balance speed (getting something valuable running today), differentiation (capturing what makes your business unique), and reach (connecting across all the systems where work actually happens).

1. Built-in tools for rapid value: Azure AI Foundry includes ready-to-use tools for common enterprise needs: searching across SharePoint and data lake, executing Python for data analysis, performing multi-step web research with Bing, and triggering browser automation tasks. These aren’t just conveniences—they let teams stand up functional, high-value agents in days instead of weeks, without the friction of early integration work.

2. Custom tools for your competitive edge: Every organization has proprietary systems and processes that can’t be replicated by off-the-shelf tools. Azure AI Foundry makes it straightforward to wrap these as agentic AI tools—whether they’re APIs from your ERP, a manufacturing quality control system, or a partner’s service. By invoking them through OpenAPI or MCP, these tools become portable and discoverable across teams, projects, and even clouds, while still benefiting from Foundry’s identity, policy, and observability layers.

3. Connectors for maximum reach: Through Azure Logic Apps, Foundry can connect agents to over 1,400 SaaS and on-premises systems—CRM, ERP, ITSM, data warehouses, and more. This dramatically reduces integration lift, allowing you to plug into existing enterprise processes without building every connector from scratch.

One example of this toolchain in action comes from NTT DATA, which built agents in Azure AI Foundry that integrate Microsoft Fabric Data Agent alongside other enterprise tools. These agents allow employees across HR, operations, and other functions to interact naturally with data—revealing real-time insights and enabling actions—reducing time-to-market by 50% and giving non‑technical users intuitive, self-service access to enterprise intelligence.

Enterprise-grade management for tools

Extensibility must be paired with governance to move from prototype to enterprise-ready automation. Azure AI Foundry addresses this with a secure-by-default approach to tool management:

Authentication and identity in built-in connectors: Enterprise-grade connectors—like SharePoint and Microsoft Fabric—already use on-behalf-of (OBO) authentication. When an agent invokes these tools, Foundry ensures that the call respects the end user’s permissions via managed Entra IDs, preserving existing authorization rules. With Microsoft Entra Agent ID, every agentic project created in Azure AI Foundry automatically appears in an agent-specific application view within the Microsoft Entra admin center. This provides security teams with a unified directory view of all agents and agent applications they need to manage across Microsoft. This integration marks the first step toward standardizing governance for AI agents company wide. While Entra ID is native, Azure AI Foundry also supports integrations with external identity systems. Through federation, customers who use providers such as Okta or Google Identity can still authenticate agents and users to call tools securely.

Custom tools with OpenAPI and MCP: OpenAPI-specified tools enable seamless connectivity using managed identities, API keys, or unauthenticated access. These tools can be registered directly in Foundry, and align with standard API design best practices. Foundry is also expanding MCP security to include stored credentials, project-level managed identities, and third-party OAuth flows, along with secure private networking—advancing toward a fully enterprise-grade, end-to-end MCP integration model.

API governance with Azure API Management (APIM): APIM provides a powerful control plane for managing tool calls: it enables centralized publishing, policy enforcement (authentication, rate limits, payload validation), and monitoring. Additionally, you can deploy self-hosted gateways within VNets or on-prem environments to enforce enterprise policies close to backend systems. Complementing this, Azure API Center acts as a centralized, design-time API inventory and discovery hub—allowing teams to register, catalog, and manage private MCP servers alongside other APIs. These capabilities provide the same governance you expect for your APIs—extended to agentic AI tools without additional engineering.

Observability and auditability: Every tool invocation in Foundry—whether internal or external—is traced with step-level logging. This includes identity, tool name, inputs, outputs, and outcomes, enabling continuous reliability monitoring and simplified auditing.

Five best practices for secure, scalable tool integration

Enterprise-grade management ensures tools are secure and observable—but success also depends on how you design and operate them from day one. Drawing on Azure AI Foundry guidance and customer experience, a few principles stand out:

Start with the contract. Treat every tool like an API product. Define clear inputs, outputs, and error behaviors, and keep schemas consistent across teams. Avoid overloading a single tool with multiple unrelated actions; smaller, single-purpose tools are easier to test, monitor, and reuse.

Choose the right packaging. For proprietary APIs, decide early whether OpenAPI or MCP best fits your needs. OpenAPI tools are straightforward for well-documented REST APIs, while MCP tools excel when portability and cross-environment reuse are priorities.

Centralize governance. Publish custom tools behind Azure API Management or a self-hosted gateway so authentication, throttling, and payload inspection are enforced consistently. This keeps policy logic out of tool code and makes changes easier to roll out.

Bind every action to identity. Always know which user or agent is invoking the tool. For built-in connectors, leverage identity passthrough or OBO. For custom tools, use Entra ID or the appropriate API key/credential model, and apply least-privilege access.

Instrument early. Add tracing, logging, and evaluation hooks before moving to production. Early observability lets you track performance trends, detect regressions, and tune tools without downtime.

Following these practices ensures that the tools you integrate today remain secure, portable, and maintainable as your agent ecosystem grows.

What’s next

In part three of the Agent Factory series, we’ll focus on observability for AI agents—how to trace every step, evaluate tool performance, and monitor agent behavior in real time. We’ll cover the built-in capabilities in Azure AI Foundry, integration patterns with Azure Monitor, and best practices for turning telemetry into continuous improvement.

Did you miss the first post in the series? Check it out: The new era of agentic AI—common use cases and design patterns.

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Build AI agents that automate tasks, enhance user experiences, and deliver results.

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The post Agent Factory: Building your first AI agent with the tools to deliver real-world outcomes appeared first on Microsoft Azure Blog.
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Building the Frontier Firm with Microsoft Azure: The business case for cloud and AI modernization

A new kind of enterprise is emerging—and it’s rewriting the rules of leadership.

Microsoft’s 2025 Work Trend Index calls them Frontier Firms: organizations that are not just adopting AI, but are powered by intelligence on tap, human-agent teams, and a new role for everyone; agent boss while rearchitecting their operations around it. These firms are moving beyond experimentation and into scaled transformation—powered by human-agent teams—by having agents as members of their team, reinventing processes, providing employees with new skills to scale their impact, and using a modern cloud foundation.

Read Microsoft’s 2025 Work Trend Index

What’s most inspiring is that they’re not waiting for perfect conditions. They’re building now for a competitive advantage.

81% of business leaders expect AI agents to be deeply integrated into workflows within the next 12–18 months.

82% say 2025 is a pivotal year to rethink how their organization operates.

And yet, only a fraction have modernized the infrastructure needed to support this shift.

This is the leadership gap. AI is the defining force of this era—but it can’t thrive on legacy systems. The ability to scale AI responsibly, securely, and enterprise-wide depends on a modern cloud foundation. And that’s where the leaders are separating from the laggards.

The future belongs to the Frontier Firm. And the foundation of every Frontier Firm is a modern cloud. The companies that will lead in AI tomorrow are the ones modernizing their digital core today. Cloud + AI isn’t a tech trend. It’s the new business model.

The gap between digital leaders and digital laggards is no longer theoretical—it’s measurable. While some organizations are reimagining their operating models with AI at the core, others are still debating pilot programs. This divergence is creating a new kind of competitive pressure—one that’s not just about technology, but about time.

In fact, according to the recent Microsoft 2025 Work Trend Index, Frontier Firms are already reshaping their industries. They are faster to market, more adaptive to change, and more efficient in how they scale intelligence across the enterprise. Meanwhile, digital laggards are stuck in a holding pattern, attempting to run AI on infrastructure that wasn’t built for it, managing data in silos that AI can’t learn from, and spending more time maintaining systems than innovating with them.

Technical debt is now one of the most significant barriers to digital transformation. This technical debt includes legacy systems that consume a disproportionate share of IT budgets, limits agility, and introduces security and compliance risks. Shifting from project-based funding to continuous modernization models can address this growing burden.

This is where cloud modernization becomes a company-level strategic—not just technical—imperative.

Legacy systems weren’t built for AI. Modernizing with Azure is how leaders unlock its full value—securely, responsibly, and at scale.

Modernization is a strategic imperative for competitive advantage, requiring rearchitecting business processes, people, and technology to unlock the full power of cloud-native services, advanced analytics, and enterprise-grade AI. Migrating and modernizing to Azure delivers more than technical efficiencies—it enables agility, innovation, and resilience at scale. A research report by IDC highlights numerous business outcomes from customers who have migrated and modernized on Azure. Let’s dive into some of the top strategic outcomes coming out of this report:

Agility: Faster execution of business change

IDC reports a 78% improvement in the speed of executing business changes for organizations modernizing with Azure. In a world where agility is a competitive advantage, this speed enables companies to respond to market shifts, regulatory changes, and customer demands with unprecedented responsiveness. Business leaders can pivot strategies, launch new offerings, or adapt operations quickly, turning agility into a core differentiator.

Innovation: More time focused on strategic initiatives

IDC found that organizations reported 69% time gain for IT teams to focus on innovation. By reducing time spent on maintenance and triaging, teams can invest in building new capabilities, experimenting with AI, and driving digital transformation. This shift allows technology leaders to move from “keeping the lights on” to driving strategic initiatives—such as AI adoption, automation, and digital transformation—that fuel long-term growth.

Speed to market: Accelerated product and service delivery

Modernized organizations saw a 43% faster time to market for new products and services. In fast-moving industries, being first—or fast—can mean the difference between market leadership or irrelevance. This outcome empowers leaders to seize new opportunities, capture market share, and drive revenue growth through innovation.

Resilience: Reduced downtime and risk

IDC reports a 90% reduction in unplanned downtime. That’s a business continuity imperative. In sectors like healthcare, manufacturing, and financial services, downtime can mean lost revenue, reputational damage, or worse. By modernizing on Azure, organizations ensure their critical systems are available and resilient, supporting business continuity and customer trust.

ROI and cost efficiency: Tangible business impact

IDC found a 344% three-year ROI and a 14-month payback period. Organizations also reported $902,700 in annual benefits per migrated and modernized application. These gains come from reduced infrastructure costs, improved performance, and better resource utilization. For business leaders, this means that investments in Azure modernization are not just cost centers, they are profit drivers. Rapid payback frees up capital for further innovation, while high ROI demonstrates that modernization is a growth strategy, not just an IT upgrade.

Modernization is a growth engine. The data proves it, and the leaders are already moving.

IDC found that organizations modernizing with Azure saw a 47% improvement in IT agility. That’s not just faster systems, its faster strategy, faster pivots, and faster innovation cycles. The business case is clear: the sooner you modernize, the sooner you unlock the full value of AI.

The future belongs to those who can scale AI responsibly. And that future starts with a modern cloud foundation.

Modernizing with Azure helps you and your team navigate the AI transformation with confidence—building a resilient, secure, and intelligent digital core that empowers your teams, delights your customers, and positions your organization as a leader in the era of AI.

To learn more about how your organization can modernize with Azure, check out the latest App Modernization Guidance and get in touch with your Microsoft expert.

Get the App Modernization Guidance

The post Building the Frontier Firm with Microsoft Azure: The business case for cloud and AI modernization appeared first on Microsoft Azure Blog.
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Agent Factory: The new era of agentic AI—common use cases and design patterns

This blog post is the first out of a six-part blog series called Agent Factory which will share best practices, design patterns, and tools to help guide you through adopting and building agentic AI.

Beyond knowledge: Why enterprises need agentic AI

Retrieval-augmented generation (RAG) marked a breakthrough for enterprise AI—helping teams surface insights and answer questions at unprecedented speed. For many, it was a launchpad: copilots and chatbots that streamlined support and reduced the time spent searching for information.

However, answers alone rarely drive real business impact. Most enterprise workflows demand action: submitting forms, updating records, or orchestrating multi-step processes across diverse systems. Traditional automation tools—scripts, Robotic Process Automation (RPA) bots, manual handoffs—often struggle with change and scale, leaving teams frustrated by gaps and inefficiencies.

This is where agentic AI emerges as a game-changer. Instead of simply delivering information, agents reason, act, and collaborate—bridging the gap between knowledge and outcomes and enabling a new era of enterprise automation.

Create with Azure AI Foundry

Patterns of agentic AI: Building blocks for enterprise automation

While the shift from retrieval to real-world action often begins with agents that can use tools, enterprise needs don’t stop there. Reliable automation requires agents that reflect on their work, plan multi-step processes, collaborate across specialties, and adapt in real time—not just execute single calls.

The five patterns below are foundational building blocks seen in production today. They’re designed to be combined and together unlock transformative automation.

1. Tool use pattern—from advisor to operator

Modern agents stand out by driving real outcomes. Today’s agents interact directly with enterprise systems—retrieving data, calling Application Programming Interface (APIs), triggering workflows, and executing transactions. Agents now surface answers and also complete tasks, update records, and orchestrate workflows end-to-end.

Fujitsu transformed its sales proposal process using specialized agents for data analysis, market research, and document creation—each invoking specific APIs and tools. Instead of simply answering “what should we pitch,” agents built and assembled entire proposal packages, reducing production time by 67%.

2. Reflection pattern—self-improvement for reliability

Once agents can act, the next step is reflection—the ability to assess and improve their own outputs. Reflection lets agents catch errors and iterate for quality without always depending on humans.

In high-stakes fields like compliance and finance, a single error can be costly. With self-checks and review loops, agents can auto-correct missing details, double-check calculations, or ensure messages meet standards. Even code assistants, like GitHub Copilot, rely on internal testing and refinement before sharing outputs. This self-improving loop reduces errors and gives enterprises confidence that AI-driven processes are safe, consistent, and auditable.

3. Planning pattern—decomposing complexity for robustness

Most real business processes aren’t single steps—they’re complex journeys with dependencies and branching paths. Planning agents address this by breaking high-level goals into actionable tasks, tracking progress, and adapting as requirements shift.

ContraForce’s Agentic Security Delivery Platform (ASDP) automated its partner’s security service delivery with security service agents using planning agents that break down incidents into intake, impact assessment, playbook execution, and escalation. As each phase completes, the agent checks for next steps, ensuring nothing gets missed. The result: 80% of incident investigation and response is now automated and full incident investigation can be processed for less than $1 per incident.

Planning often combines tool use and reflection, showing how these patterns reinforce each other. A key strength is flexibility: plans can be generated dynamically by an LLM or follow a predefined sequence, whichever fits the need.

4. Multi-agent pattern—collaboration at machine speed

No single agent can do it all. Enterprises create value through teams of specialists, and the multi-agent pattern mirrors this by connecting networks of specialized agents—each focused on different workflow stages—under an orchestrator. This modular design enables agility, scalability, and easy evolution, while keeping responsibilities and governance clear.

Modern multi-agent solutions use several orchestration patterns—often in combination—to address real enterprise needs. These can be LLM-driven or deterministic: sequential orchestration (such as agents refine a document step by step), concurrent orchestration (agents run in parallel and merge results), group chat/maker-checker (agents debate and validate outputs together), dynamic handoff (real-time triage or routing), and magentic orchestration (a manager agent coordinates all subtasks until completion).

JM Family adopted this approach with business analyst/quality assurance (BAQA) Genie, deploying agents for requirements, story writing, coding, documentation, and Quality Assurance (QA). Coordinated by an orchestrator, their development cycles became standardized and automated—cutting requirements and test design from weeks to days and saving up to 60% of QA time.

5. ReAct (Reason + Act) pattern—adaptive problem solving in real time

The ReAct pattern enables agents to solve problems in real time, especially when static plans fall short. Instead of a fixed script, ReAct agents alternate between reasoning and action—taking a step, observing results, and deciding what to do next. This allows agents to adapt to ambiguity, evolving requirements, and situations where the best path forward isn’t clear.

For example, in enterprise IT support, a virtual agent powered by the ReAct pattern can diagnose issues in real time: it asks clarifying questions, checks system logs, tests possible solutions, and adjusts its strategy as new information becomes available. If the issue grows more complex or falls outside its scope, the agent can escalate the case to a human specialist with a detailed summary of what’s been attempted.

These patterns are meant to be combined. The most effective agentic solutions weave together tool use, reflection, planning, multi-agent collaboration, and adaptive reasoning—enabling automation that is faster, smarter, safer, and ready for the real world.

Why a unified agent platform is essential

Building intelligent agents goes far beyond prompting a language model. When moving from demo to real-world use, teams quickly encounter challenges:

How do I chain multiple steps together reliably?

How do I give agents access to business data—securely and responsibly?

How do I monitor, evaluate, and improve agent behavior?

How do I ensure security and identity across different agent components?

How do I scale from a single agent to a team of agents—or connect to others?

Many teams end up building custom scaffolding—DIY orchestrators, logging, tool managers, and access controls. This slows time-to-value, creates risks, and leads to fragile solutions.

This is where Azure AI Foundry comes in—not just as a set of tools, but as a cohesive platform designed to take agents from idea to enterprise-grade implementation.

Azure AI Foundry: Unified, scalable, and built for the real world

Azure AI Foundry is designed from the ground up for this new era of agentic automation. Azure AI Foundry delivers a single, end-to-end platform that meets the needs of both developers and enterprises, combining rapid innovation with robust, enterprise-grade controls.

With Azure AI Foundry, teams can:

Prototype locally, deploy at scale: Develop and test agents locally, then seamlessly move to cloud runtime—no rewrites needed. Check out how to get started with Azure AI Foundry SDK.

Flexible model choice: Choose from Azure OpenAI, xAI Grok, Mistral, Meta, and over 10,000 open-source models—all via a unified API. A Model Router and Leaderboard help select the optimal model, balancing performance, cost, and specialization. Check out the Azure AI Foundry Models catalog.

Compose modular multi-agent architectures: Connect specialized agents and workflows, reusing patterns across teams. Check out how to use connected agents in Azure AI Foundry Agent Service.

Integrate instantly with enterprise systems: Leverage over 1,400+ built-in connectors for SharePoint, Bing, SaaS, and business apps, with native security and policy support. Check out what are tools in Azure AI Foundry Agent Service.

Enable openness and interoperability: Built-in support for open protocols like Agent-to-Agent (A2A) and Model Context Protocol (MCP) lets your agents work across clouds, platforms, and partner ecosystems. Check out how to connect to a Model Context Protocol Server Endpoint in Azure AI Foundry Agent Service.

Enterprise-grade security: Every agent gets a managed Entra Agent ID, robust Role-based Access Control (RBAC), On Behalf Of authentication, and policy enforcement—ensuring only the right agents access the right resources. Check out how to use a virtual network with the Azure AI Foundry Agent Service.

Comprehensive observability: Gain deep visibility with step-level tracing, automated evaluation, and Azure Monitor integration—supporting compliance and continuous improvement at scale. Check out how to monitor Azure AI Foundry Agent Service.

Azure AI Foundry isn’t just a toolkit—it’s the foundation for orchestrating secure, scalable, and intelligent agents across the modern enterprise.It’s how organizations move from siloed automation to true, end-to-end business transformation.

Stay tuned: In upcoming posts in our Agent Factory blog series, we’ll show you how to bring these pillars to life—demonstrating how to build secure, orchestrated, and interoperable agents with Azure AI Foundry, from local development to enterprise deployment.

Azure AI Foundry
Design, customize, and manage AI apps and agents at scale.

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Microsoft is a Leader in the 2025 Gartner® Magic Quadrant™ for Container Management

We’re proud to announce that Microsoft has once again been recognized as a Leader in the 2025 Gartner Magic Quadrant for Container Management, for the third year in a row. We believe this recognition reflects the breadth, innovation, and real-world customer impact of our container portfolio.

From Azure Kubernetes Service (AKS) and Azure Container Apps (ACA) to our hybrid and multi cloud solutions with Azure Arc, Microsoft offers a comprehensive container management solution that meets customers where they are, whether they’re modernizing legacy applications, building cloud-native apps, or scaling the next generation of AI apps and agents.

A comprehensive container portfolio, from cloud to edge

Azure offers a broad set of container management capabilities designed to support both developers and IT operators. AKS is a robust and flexible managed Kubernetes service that runs in Azure and can also extend to on-premises environments through Azure Arc and Azure Local. For teams that want serverless simplicity, Azure offers Azure Container Apps with scale-to-zero, serverless GPUs, and the ability to run sand-boxed code.

This flexible approach, ranging from full control with AKS to ease of use with serverless containers, is tightly integrated with Azure’s broader cloud services, including networking, databases, and AI. It gives teams a unified platform that improves developer experience, enables faster AI innovation, and simplifies operations.

Get started with Azure Kubernetes Service

Developer experience: Build and ship faster

Modern application development starts with empowering developers. We’ve focused on improving the developer experience across the entire container lifecycle.

AKS Automatic (preview) streamlines Kubernetes for developers by provisioning production‑ready, secure, and automatically managed AKS clusters including node provisioning, scaling, upgrades, and CI/CD integration.

Automated deployments for AKS simplifies application delivery by seamlessly pushing code changes to AKS using GitHub Actions or Azure DevOps.

Developer tools like the Azure Developer CLI, Visual Studio Code AKS extension, and GitHub Actions make it easier to develop locally, integrate with CI/CD, and deploy to production.

GitHub Copilot, used by over 20M developers, brings generative AI seamlessly into container workflows, accelerating tasks like writing Kubernetes manifests, Dockerfiles, and CI/CD configs.

We’re also investing in DevSecOps across our services, enabling seamless integration of security, testing, and governance into developer pipelines. Microsoft Defender for Containers, policy-based governance via Azure Policy, and RBAC help teams enforce standards without slowing down innovation.

AI innovation: Building the next wave of AI apps

Containers are the foundation for modern applications, including AI and machine learning workflows. Microsoft has continued to focus on making it easier to run AI workloads in containerized environments.

AKS supports GPU-optimized containers, enabling customers to train and deploy models in the cloud or at the edge. Integration with Azure Machine Learning helps streamline model lifecycle management.

Azure Container Apps serverless GPUs allow teams to deploy inferencing workloads efficiently, with scale-to-zero and per-second billing.

Microsoft is also contributing to open innovation in this space, including through KAITO (Kubernetes AI Toolchain Operator), a CNCF sandbox project that simplifies deploying open-source models on Kubernetes.

Azure AI Foundry provides easy access to over 11 thousand models, including OpenAI GPT-4o and Meta’s Llama, for building secure, scalable AI apps.

These capabilities help organizations run AI workloads more cost-effectively, securely, and at scale.

Operational simplicity: Kubernetes that just works

Running containers at scale often requires deep operational insight. We’ve delivered several enhancements to help platform and operations teams reduce complexity and improve efficiency.

Azure Kubernetes Fleet Manager enables policy-driven governance and workload orchestration across multiple AKS clusters—including multi-cluster updates—simplifying platform management at enterprise scale.

With node auto-provisioning, AKS can automatically select and scale the most cost-effective VM sizes to match workload demands, removing guesswork and helping control costs.

Azure Advisor offers AKS cost recommendations designed to identify cost savings opportunities and provide actionable insights tailored to your cluster configuration.

Azure Arc streamlines edge and multicloud ops with unified Kubernetes management using GitOps, policy automation, and built-in Azure tools.

Our goal is to make running Kubernetes as frictionless as possible, whether customers are managing a single cluster or a global fleet.

Customers are achieving more with Azure container management

Organizations of all sizes and industries are using Azure to modernize apps, drive AI innovation, and improve operational agility:

ChatGPT, the fastest-growing app, scales AI workloads globally to 500M weekly users leveraging Azure Kubernetes Service, Azure Cosmos DB, and Azure GPU VMs.

Telefônica Brasil has reduced call center handling time by 9% while reliably managing over 5.3 million monthly queries with their intelligent I.Ajuda platform, built on AKS.

The Coca-Cola Company launched an immersive, AI-powered holiday campaign across 43 markets using Azure Container Apps and Azure AI Foundry, engaging over 1 million consumers in just 60 days with sub-millisecond performance.

Hexagon modernized its SDx platform with AKS, enabling dynamic scaling and zero‑downtime deployments that cut task processing times from days to under an hour, resulting in over 90% faster customer onboarding.

Delta Dental of California modernized its payment system with a hybrid Azure Kubernetes solution managed via Azure Arc, reducing infrastructure costs and ensuring compliance while handling 1.5 million daily transactions.

These examples underscore how Azure’s container management services are helping businesses move faster, operate more efficiently, and deliver better customer experiences.

Looking ahead

We’re honored to be recognized again as a Leader in the 2025 Gartner Magic Quadrant for Container Management, but we’re even more energized by what’s next.

In the coming months, expect continued investments in:

Simplifying fleet and multi-cluster operations.

Expanding AKS to smaller footprint edge environments.

Enhancing AI-powered cloud management experiences.

Our mission remains the same: to make building, operating, and scaling containerized applications easier, more intelligent, and more secure.

Learn more

Explore Azure Kubernetes Service, Azure Kubernetes Fleet Manager, and Azure Container Apps.

Learn more about building and modernizing AI apps on Azure.

Dive into the AKS community on YouTube, led by the Azure Kubernetes Service team, for the latest product updates.

Gartner, Magic Quadrant for Container Management, By Dennis Smith, Tony Iams, Wataru Katsurashima, Michael Warrilow, Lucas Albuquerque, Stephanie Bauman, 6 August 2025.

*Gartner is a registered trademark and service mark and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. 

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request here. 

Gartner does not endorse any vendor, product, or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
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GPT-5 in Azure AI Foundry: The future of AI apps and agents starts here

For business leaders building with AI, the conversation has moved beyond chat. The bar is higher: can your AI generate, reason, and deliver measurable outcomes—safely and at scale?

Today, we’re announcing general availability of OpenAI’s new flagship model, GPT-5, in Azure AI Foundry. This is more than a new model release; it is the most powerful LLM ever released across key benchmarks. GPT-5 in Azure AI Foundry pairs frontier reasoning with high-performance generation and cost efficiency, delivered on Microsoft Azure’s enterprise-grade platform so organizations can move from pilots to production with confidence. 

Enhance customer experiences with Azure AI Foundry

GPT-5 in Azure AI Foundry: Built for real-world workloads

In Azure AI Foundry, the GPT-5 models are available via API and orchestrated by themodel router. The GPT-5 series spans complementary strengths:

GPT-5, a full reasoning model provides deep, richer reasoning for analytics and complex tasks, like code generation, with a 272k token context.

GPT-5 mini powers real-time experiences for apps and agents that require reasoning, tool calling to solve customer problems.

GPT-5 nano is a new class of reasoning model which focuses on ultra-low-latency and speed with rich Q&A capabilities.

GPT-5 chat enables natural, multimodal, multi-turn conversations that remain context-aware throughout agentic workflows, with 128k token context.

Together, the suite delivers a seamless continuum from rigorous agentic coding tasks, to relatively simple Q&A—all delivered with the same Azure AI Foundry endpoint using model router in Foundry Models.

Under the hood, GPT-5 unifies advanced reasoning, code generation, and natural language interaction. It combines analytical depth with intuitive dialogue to solve end-to-end problems and explain its approach. Agentic capabilities allow multi-step tool use and long action chains with transparent, auditable decisions. As a frontier-level coding model, GPT-5 can plan complex agentic workflow, build migrations, and refactor code, as well as produce tests and documentation with clear rationale. Developer controls—including parameters like reasoning_effort and verbosity—let teams tune depth, speed, and detail, while new freeform tool-calling features enable broadens tool compatibility without rigid schemas.

Orchestrate with the model router—then scale with agents

Introducing GPT-5 to Azure AI Foundry is more than a model drop: it’s a leap forward for the platform. Starting today, developers can use the model router in Foundry Models to maximize the capabilities of the GPT-5 family models (and other models in Foundry Models) while saving up to 60% on inferencing cost with no loss in fidelity. Powered by a fine-tuned SLM under the hood, the model router evaluates each prompt and decides the optimal model based on the complexity, performance needs, and cost efficiency of each task. Let the model router pick the right model so that you can build your AI-powered applications with ease.

And orchestration doesn’t stop at routing—Foundry carries the same intelligence into agents. Coming soon, GPT-5 will be available in the Foundry Agent Service, pairing frontier models with built-in tools including new browser automation and Model Context Protocol (MCP) integrations. The result: policy-governed, tool-using agents that can search, act in web apps, and complete end-to-end tasks—instrumented with Foundry telemetry and aligned to Microsoft Responsible AI.

Accelerating business impact with GPT-5

These capabilities map directly to business impact.

In research and knowledge work, GPT-5 accelerates financial and legal analysis, market intelligence, and due diligence—reading at scale and producing decision-ready output with traceability. In operations and decisioning, it strengthens logistics support, risk assessment, and claims processing by pairing robust reasoning with policy adherence. Copilots and customer experience teams benefit from multi-turn, multimodal agents that reason in real time, call tools, resolve tasks, and revert to humans with more helpful context.

In software engineering, GPT-5 excels at code generation, application modernization, and quality engineering—improving code style and explanations to compress review cycles.

And for use cases which are cost or latency sensitive, GPT-5-nano’s ultra‑low‑latency architecture delivers rapid, high‑accuracy responses, making it the ideal target for fine‑tuning and the go‑to model for high‑volume, straightforward requests.

GPT-5 customer spotlight

Customers are unleashing GPT-5 across complex, mission-critical workloads—accelerating decision-making, supercharging coding, and catalyzing product innovation.

SAP

SAP is excited to be among the first to leverage the power of GPT-5 in Azure AI Foundry within our generative AI hub in AI Foundation. GPT-5 in Azure AI Foundry will enable our product team and our developer community to deliver impactful business innovations to our customers.
—Dr. Walter Sun, SVP and Global Head of AI, SAP SE

Relativity

The GPT-5 in Azure AI Foundry raises the bar for putting legal data intelligence into action… This next-generation AI will empower legal teams to uncover deeper insights, accelerate decision-making, and drive stronger strategies across the entire legal process.
—Dr. Aron Ahmadia, Senior Director, Applied Science, Relativity

Hebbia

The partnership between Hebbia and Azure AI Foundry gives financial professionals an unprecedented edge. With GPT-5’s advanced reasoning in Hebbia, they can pinpoint critical figures across thousands of documents and structuring complex financial analysis with speed and accuracy.
—Danny Wheller, VP of Business and Strategy

Building with AI in GitHub Copilot and Visual Studio Code

GPT-5 begins rolling out today to millions of developers using GitHub Copilot and Visual Studio Code, applying the flagship model’s advanced reasoning capabilities to increasingly complex problems—from sophisticated refactoring to navigating large codebases more effectively. GPT-5 helps developers write, test, and deploy code faster, while supporting agentic coding tasks with significant improvements to coding style and overall code quality. With GPT-5, developers not only code faster, but code better.

With today’s VS Code release, developers also gain a more powerful agentic coding experience directly within the editor: GitHub Copilot’s coding agent has an improved experience for autonomously tackling tasks in the background. Additionally, the GitHub Copilot chat experience brings increased productivity, including support beyond 128 tools for a single chat request and chat checkpoints allowing users to restore workspace changes to a prior point. Today, we are also announcing an updated extension to develop agents using the Azure AI Foundry extension all within VS Code environment.

These announcements extend Microsoft’s strategy to transform software development with AI, bringing advanced AI capabilities to the entire software lifecycle.

Security, safety, and governance by design

In all domains, security and safety is a layer cake of protections, which together provide protection for risk scenarios—and AI is no different. For AI, we think about layers with the model as the core. With GPT-5, the core is safer than before:

The Microsoft AI Red Team found GPT-5 to have one of the strongest safety profiles of any OpenAI model, performing on par with—or better than—o3.
—Dr. Sarah Bird, Chief Product Officer of Responsible AI, Microsoft

As we think about the safety, security, and governance layers around this core—Azure AI Foundry provides a number of additional controls:

Azure AI Content Safety protections are applied to every prompt and completion, such as prompt shields, which help to detect and mitigate prompt-injection attempts before they reach the model.

Built-in agent evaluators work with the AI Red Teaming Agent to run alignment, bias, and security tests throughout development and production, while continuous evaluation streams real-time metrics—latency, quality, safety, and fairness—stream into Azure Monitor and Application Insights for single-pane visibility.

Finally, security signals integrate directly with Microsoft Defender for Cloud, and runtime metadata and evaluation results are integrated to Microsoft Purview for audit, data-loss prevention, and regulatory reporting, extending protection and governance across the entire GPT-5 lifecycle.

Bringing AI into every workflow with GitHub Copilot and Visual Studio Code

Starting today, GPT-5 begins rolling out to millions of developers who use GitHub Copilot and Visual Studio Code who will be able to select GPT-5 to write, test, and deploy code—and develop agents using the Azure AI Foundry extension all within VS Code environment. GPT-5 supports complex agentic coding tasks with significant improvements to coding personality, front-end aesthetics, and code quality, highly desired improvements for the developer community.

Our evaluations show OpenAI GPT-5’s reasoning capabilities and contextual awareness exceed o3, enabling developers to tackle more complex problems—from refactoring to navigating large codebases. With GPT-5, users in the Visual Studio family can not only code faster, but code better.

VS Code and our recent decision to open-source GitHub Copilot, represents our commitment to open tools and standards and demonstrates our ability to meet the rapid pace of model innovations while keeping the developer experience at the forefront. In today’s release of VS Code, developers can. In today’s VS Code release, developers have even more control over their experience in chat—with improvements to the reliability of terminal tools, updates to the tool picker and limits, new checkpoints, and more.

Today’s announcement extends Microsoft’s strategy to transform software development with AI, bringing advanced AI capabilities to the entire software lifecycle.

Start building today

GPT-5 is available via our Standard offering in Azure AI Foundry, with deployment choices optimized for cost-efficiency and governance needs, including Global and Data Zone (United States, European Union) deployment options for data residency and compliance.1

With Azure AI Foundry’s first-class reliability, realtime evaluations, built-in observability, and secure deployment options, you can confidently move from pilot to production—all aided while unique tools like Model Router optimizes quality, latency, and cost across workloads.

Azure AI Foundry
Design, customize, and manage powerful, adaptable AI agents to get started today.

Learn more >

1Pricing is accurate as of August 2025
The post GPT-5 in Azure AI Foundry: The future of AI apps and agents starts here appeared first on Microsoft Azure Blog.
Quelle: Azure

Introducing Azure Storage Discovery: Transform data management with storage insights

We are excited to announce the public preview of Azure Storage Discovery, a fully managed service that provides you enterprise-wide visibility into your Azure Blob Storage data estate. It provides a single pane of glass to understand and analyze how your data estate has evolved over time, optimize costs, enhance security, and drive operational efficiency. Azure Storage Discovery integrates with the Azure Copilot enabling you to use natural language to unlock insights and accelerate decision-making without utilizing any query language.

As your organization expands its digital footprint in the cloud, managing vast and globally distributed datasets across various business units and workloads becomes increasingly challenging. Insights aggregated across the entire Azure Blob Storage data estate can simplify the detection of outliers, enable long-term trend analysis, and support deep dives into specific resources using filters and pivots. Currently, customers rely on disparate tools and PowerShell scripts to generate, maintain and view such insights. This requires constant development, deployment, and management of infrastructure at scale. Azure Storage Discovery automates and scales this process by aggregating insights across all the subscriptions in your Microsoft Entra tenant and delivering them to you directly within the Azure portal.

Learn more about Azure Storage Discovery

Whether you’re a cloud architect, storage administrator, or data governance lead, Azure Storage Discovery helps you quickly answer key questions about your enterprise data estate in Azure Blob Storage:

How much data do we store across all our storage accounts?

Which regions are experiencing the highest growth?

Can I reduce our costs by finding data that is not being frequently used?

Are our storage configurations aligned with security and compliance best practices?

With Azure Storage Discovery, you can now explore such insights—and many more—with just a few clicks and with a Copilot by your side.

From insight to action with Azure Storage Discovery

Azure Storage Discovery simplifies the process of uncovering and analyzing insights from thousands of storage accounts, transforming complexity into clarity with just a few clicks.

Some of the key capabilities are:

Tap into Azure Copilot to get answers to the most critical storage questions for your business, without needing to learn a new query language or writing a single line of code. You can use Copilot to go beyond the pre-built reports and bring together insights across capacity, activity, errors and configurations.

Gain advanced storage insights that help you analyze how the data estate in Azure Blob Storage is growing, identify opportunities for cost optimization, discover data that is under-utilized, pinpoint workloads that could be getting throttled and find ways to strengthen the security of your storage accounts. These insights are powered by metrics related to storage capacity (object size and object count), activity on the data estate (transactions, ingress, egress), aggregation of transaction errors and detailed configurations for data protection, cost optimization and security.

Interactive reports in the Azure Portal make it simple to analyze trends over time, drill into top storage accounts, and instantly navigate to the specific resources represented in each chart. The reports can be filtered to focus on specific parts of the data estate based on Storage account configurations like regions, redundancy, performance type, encryption type, and others. Organization-wide visibility with flexible scoping to gather insights for multiple business groups or workloads. Analyze up to 1 million storage accounts spread across different subscriptions, resource groups and regions within a single workspace. The ability to drill down and filter data allows you to quickly obtain actionable insights for optimizing your data estate.

Fully managed service available right in the Azure Portal, with no additional infrastructure deployment or impact on business-critical workloads.

Up to 30 days of historical data will automatically be added within hours of deploying Azure Storage Discovery and all insights will be retained for up to 18 months.

Customer stories

Several customers have already started exploring Azure Storage Discovery during the preview to analyze their enterprise Azure Blob Storage data estate. Here are a few customers who found immediate value during the preview.

Getting a 360-degree view of the data estate in Azure Blob Storage

Tesco, one of the world’s largest and most innovative retailers, has been leveraging Storage Discovery in preview to gain an “effortless 360 View” of its data estate in Azure Blob Storage. To boost agility in development, the cloud deployment at Tesco is operated in a highly democratized manner, giving departments and teams autonomy over their subscriptions and storage accounts. However, to manage their cloud spend, ensure their deployment is configured correctly and optimize their data estate, each team is looking for detailed insights in a timely manner. The Cloud Platform Engineering (CPE) team works with each team providing them centralized data for cost analysis, security, and operational reporting. Currently, gathering and reporting on these insights to each team is a highly manual and operationally challenging task. As early adopters they have been using Azure Storage Discovery to provide a centralized, tenant-wide dashboard—to enable a “single-pane-of-glass” for key metrics and baselines. This helps them reduce the resources and time associated with answering simple questions such as “how much data do we have, and where?” or “what’s our baseline trends?”

As our data estate in Azure Storage continues to grow, it has become time consuming to gather the insights required to drive decisions around ‘How’ and ‘What’ we do—especially at the pace which is often demanded by stakeholders. Today, a lot of this is done using PowerShell scripts which even with parallelism, take a significant time to run, due to our overall scale. Anything which reduces the time it takes me to gather valuable insights is super valuable. On the other side, if I were to put my Ops hat on, the data presented is compelling for conversations with application teams; allowing us to focus on what really matters and addressing our top consumers, as opposed to being ‘snowed in’ under a mountain of data.
—Rhyan Waine, Lead Engineer, Cloud Platform Engineering, Tesco

Manage budget by identifying Storage Accounts that are growing rapidly

Willis Towers Watson (WTW) is at the forefront of using generative AI to enhance their offering for Human Resources and Insurance services while also balancing their costs. With Azure Storage Discovery, the team was able to quickly identify storage accounts where data was growing rapidly and increasing costs. With the knowledge of which storage accounts to focus on, they were able to identify usage patterns, roll out optimizations and control their costs.

As soon as my team started using Storage Discovery, they were immediately impressed by the insights it provided. Their reaction was, ‘Great—let’s dive in and see what we can uncover.’ Very quickly, they identified several storage accounts that were growing at an unusual rate. With that visibility, we were able to zero in on those Storage Accounts. We also discovered data that hadn’t been accessed in a long time, so we implemented automatic cleanups using Blob Lifecycle Management to efficiently manage and delete unused data.
—Darren Gipson, Lead DevOps Engineer, Willis Towers Watson

How Storage Discovery works

To get started with Azure Storage Discovery, follow these two simple steps: first, configure a Discovery workspace which contains the definition of the resource, and then define the Scopes that represent your business groups or workloads. Once these steps are completed, Azure Storage Discovery will start aggregating the relevant insights and make them available to you in detailed dashboards that can be found in the Reports page.

Deploying a Discovery workspace enables you to select which part of your data estate in Azure Blob Storage you want to analyze. You can do this by selecting all the subscriptions and resource groups of interest within your Microsoft Entra tenant. Upon successful verification of your access credentials, Azure Storage Discovery will advance to the next step.

Once the workspace is configured, you can create up to 5 scopes, each representing a business group, a workload, or any other logical grouping of storage accounts that has business value to you. This filtering can be done by selecting ARM resource tags that were previously applied to your storage accounts.

After the deployment is successful, Azure Storage Discovery provides reports right within the Azure portal with no additional setup.

Pricing and availability

Storage Discovery is available in select Azure regions during public preview. The service offers a Free pricing plan with insights related to capacity and configurations retained for up to 15 days and a Standard pricing plan that also includes advanced insights related to activity, errors and security configurations retained for up to 18 months to analyze annual trends and cycles in your business workloads. Pricing is based on the number of storage accounts and objects analyzed, with tiered rates to support all sizes of data estates in Azure Blob Storage.

The Free and Standard pricing plans will be offered for free, with no additional cost until September 30th, 2025. Learn more about pricing in the Azure Storage Discovery documentation.

Get started with Azure Storage Discovery

You can get started using Azure Storage Discovery to unlock the full potential of your storage within minutes. We invite you to preview Azure Storage Discovery for data management of your object storage. To get started, refer to the quick start guide to configure your first workspace. To learn more, check out the documentation.

We’d love to hear your feedback. What insights are most valuable to you? What would make Storage Discovery more compelling for your business? Let us know at StorageDiscoveryFeedback@service.microsoft.com.

Discover more about Azure Storage Discovery

The post Introducing Azure Storage Discovery: Transform data management with storage insights appeared first on Microsoft Azure Blog.
Quelle: Azure