You can use HCP Terraform’s native OpenID Connect integration with Vault to use Vault-backed dynamic credentials with the Azure provider in your HCP Terraform runs. Configuring the integration requires the following steps:

1. Configure Vault Dynamic Provider Credentials: Set up a trust configuration between Vault and HCP Terraform, create Vault roles and policies for your HCP Terraform workspaces, and add environment variables to those workspaces.
2. Configure the Vault Azure Secrets Engine: Set up the Azure secrets engine in your Vault instance.
3. Configure HCP Terraform: Add additional environment variables to the HCP Terraform workspaces where you want to use Vault-Backed Dynamic Credentials.
4. Configure Terraform Providers: Configure your Terraform providers to work with Vault-backed Dynamic Credentials.

Once you complete this setup, HCP Terraform automatically authenticates with Azure via Vault-generated credentials during the plan and apply phase of each run. The Azure provider's authentication is only valid for the length of the plan or apply phase.

Configure Vault Dynamic Provider Credentials

You must first set up Vault dynamic provider credentials before you can use Vault-backed dynamic credentials. This includes setting up the JWT auth backend in Vault, configuring trust between HCP Terraform and Vault, and populating the required environment variables in your HCP Terraform workspace.

See the setup instructions for Vault dynamic provider credentials.

Configure Vault Azure Secrets Engine

Follow the instructions in the Vault documentation for setting up the Azure secrets engine in your Vault instance. You can also do this configuration through Terraform. Refer to our example Terraform configuration.

Configure HCP Terraform

Next, you need to set certain environment variables in your HCP Terraform workspace to authenticate HCP Terraform with Azure using Vault-backed dynamic credentials. These variables are in addition to those you previously set while configuring Vault dynamic provider credentials. You can add these as workspace variables or as a variable set. When you configure dynamic provider credentials with multiple provider configurations of the same type, use either a default variable or a tagged alias variable name for each provider configuration. Refer to Specifying Multiple Configurations for more details.

Required Environment Variables

Optional Environment Variables

You may need to set these variables, depending on your use case.

Configure Terraform Providers

The final step is to directly configure your Azure and Vault providers.

Configure the AzureRM or Microsoft Entra ID

Ensure you pass a value for the subscription_id and tenant_id arguments in your provider configuration block or set the ARM_SUBSCRIPTION_ID and ARM_TENANT_ID variables in your workspace.

Do not set values for client_id, use_oidc, or oidc_token in your provider configuration block. Additionally, do not set variable values for ARM_CLIENT_ID, ARM_USE_OIDC, or ARM_OIDC_TOKEN.

Configure the Vault Provider

If you were previously using the Vault provider to authenticate the Azure provider, remove any existing usage of the Azure secrets engine from your Terraform Code. This includes the vault_azure_access_credentials data source and any instances of vault_generic_secret you previously used to generate Azure credentials.

Specifying Multiple Configurations

You can add additional variables to handle multiple distinct Vault-backed Azure setups, enabling you to use multiple provider aliases within the same workspace. You can configure each set of credentials independently, or use default values by configuring the variables prefixed with TFC_DEFAULT_.

For more details, see Specifying Multiple Configurations.

Required Terraform Variable

To use additional configurations, add the following code to your Terraform configuration. This lets HCP Terraform supply variable values that you can then use to map authentication and configuration details to the correct provider blocks.

variable "tfc_vault_backed_azure_dynamic_credentials" {  description = "Object containing Vault-backed Azure dynamic credentials configuration"  type = object({    default = object({      client_id_file_path = string      client_secret_file_path = string    })    aliases = map(object({      client_id_file_path = string      client_secret_file_path = string    }))  })}

Example Usage

AzureRM Provider

provider "azurerm" {  features {}  // use_cli should be set to false to yield more accurate error messages on auth failure.  use_cli                 = false  client_id_file_path     = var.tfc_vault_backed_azure_dynamic_credentials.default.client_id_file_path  client_secret_file_path = var.tfc_vault_backed_azure_dynamic_credentials.default.client_secret_file_path  subscription_id         = "00000000-0000-0000-0000-000000000000"  tenant_id               = "10000000-0000-0000-0000-000000000000"}provider "azurerm" {  features {}  // use_cli should be set to false to yield more accurate error messages on auth failure.  use_cli                 = false  alias                   = "ALIAS1"  client_id_file_path     = var.tfc_vault_backed_azure_dynamic_credentials.aliases["ALIAS1"].client_id_file_path  client_secret_file_path = var.tfc_vault_backed_azure_dynamic_credentials.aliases["ALIAS1"].client_secret_file_path  subscription_id         = "00000000-0000-0000-0000-000000000000"  tenant_id               = "20000000-0000-0000-0000-000000000000"}

Microsoft Entra ID Provider (previously AzureAD)

provider "azuread" {  features {}  // use_cli should be set to false to yield more accurate error messages on auth failure.  use_cli                 = false  client_id_file_path     = var.tfc_vault_backed_azure_dynamic_credentials.default.client_id_file_path  client_secret_file_path = var.tfc_vault_backed_azure_dynamic_credentials.default.client_secret_file_path  subscription_id         = "00000000-0000-0000-0000-000000000000"  tenant_id               = "10000000-0000-0000-0000-000000000000"}provider "azuread" {  features {}  // use_cli should be set to false to yield more accurate error messages on auth failure.  use_cli                 = false  alias                   = "ALIAS1"  client_id_file_path     = var.tfc_vault_backed_azure_dynamic_credentials.aliases["ALIAS1"].client_id_file_path  client_secret_file_path = var.tfc_vault_backed_azure_dynamic_credentials.aliases["ALIAS1"].client_secret_file_path  subscription_id         = "00000000-0000-0000-0000-000000000000"  tenant_id               = "20000000-0000-0000-0000-000000000000"}