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---
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title: How does Azure IoT Operations work in layered network?
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# titleSuffix: Azure Layered Network Environment
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description: Use the Layered Network Management service to enable Azure IoT Operations in industrial network environment.
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author: PatAltimore
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ms.author: patricka
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ms.topic: concept-article
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ms.date: 11/29/2023
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#CustomerIntent: As an operator, I want to learn about the architecture of Azure IoT Operations in a Purdue Network environment and how does Layered Network Managment support this scenario.
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---
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# How does Azure IoT Operations work in layered network?
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[!INCLUDE [public-preview-note](../includes/public-preview-note.md)]
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## Industrial scenario for the Azure IoT Operations
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In the basic architecture described in [Azure IoT Operations Architecture Overview](../get-started/overview-iot-operations.md#architecture-overview), all the Azure IoT Operations components are deployed to a single internet-connected cluster. In this type of environment, component-to-component and component-to-Azure connections are enabled by default.
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However, in many industrial scenarios, computing units for different purposes are located in separate networks. For example:
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- Assets and servers on the factory floor
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- Data collecting and processing solutions in the data center
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- Business logic applications with information workers
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In some cases, the network design includes a single isolated network that is located behind the firewall or is physically disconnected from the internet. In other cases, a more complicated layered network topology is configured, such as the [ISA-95](https://www.isa.org/standards-and-publications/isa-standards/isa-standards-committees/isa95)/[Purdue Network architecture](https://en.wikipedia.org/wiki/Purdue_Enterprise_Reference_Architecture).
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Layered Network Management is designed for facilitating connections between Azure and clusters in different kinds of isolated network environments. Enabling Azure IoT Operations to function in top-level isolated layers and nested isolated layers as needed.
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## How does Layered Network Management work?
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The following diagram describes the mechanism to redirect traffic from an isolated network to Azure Arc. It explains the underlying logic. For information on specific steps to achieve this mechanism, see [Configure Azure IoT Layered Network Management](howto-configure-l4-cluster-layered-network.md).
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1. When an Arc agent or extension is attempting to connect to its corresponding cloud side service, it uses the DNS to resolve the domain name of the target service endpoint.
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1. The custom DNS returns the **IP address of the Layered Network Management instance** at the upper level instead of the real IP address of the service endpoint.
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1. The Arc extension initiates a connection to the Layered Network Management instance with its IP address.
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1. If the Layered Network Management instance is at the internet facing level, it forwards the traffic to the target Arc service endpoint. If the Layered Network Management instance isn't at the top level, it forwards the traffic to the next Layered Network Management instance, and so on.
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> [!NOTE]
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> Layered Network Management only forwards internet traffic when the destination is on the allowlist.
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![Diagram of Layered Network Management redirecting traffic.](./media/concept-iot-operations-in-layered-network/how-does-layered-network-management-work.png)
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## Example of Azure IoT Operations in layered network
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The following diagram is an example of Azure IoT Operations being deployed to multiple clusters in multiple network layers. Based on the Purdue Network paradigm, level 4 is the enterprise network, level 3 is the operation and control layer, and level 2 is the controller system layer. Moreover, in our prototypical network, only level 4 has direct internet access.
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:::image type="content" source="./media/concept-iot-operations-in-layered-network/iot-operations-in-purdue-network.png" alt-text="Diagram of IoT Operations deployed in Purdue Network architecture." lightbox="./media/concept-iot-operations-in-layered-network/iot-operations-in-purdue-network.png":::
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In the pictured example, Azure IoT Operations is deployed to level 2 through 4. At level 3 and level 4, the **Layered Network Management services** are configured to receive and forward the network traffic from the layer that is one level below. With this forwarding mechanism, all the clusters illustrated in this deployment are able to connect to Azure and become Arc-enabled. The connection to Arc enables users to manage any Arc-enabled endpoint such as the servers, the cluster and the Arc-enabled service workloads from the cloud.
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With extra configurations, the Layered Network Management service can also direct east-west traffic. This route enables Azure IoT Operations components to send data to other components at upper level and form data pipelines from the bottom layer to the cloud.
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In a multi-layer network, the Azure IoT Operations components can be deployed across layers based on your architecture and data flow needs. This example provides some general ideas of where individual components will be placed.
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- The **OPC UA Broker** may locate at the lower layer that is closer to your assets and OPC UA servers. This is also true for the **Akri** agent.
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- The data shall be transferred towards the cloud side through the **MQ** components in each layer.
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- The **Data Processor** is generally placed at the top layer as the most likely layer to have significant compute capacity and as a final stop for the data to get prepared before being sent to the cloud.
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## Next steps
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- To understand how to set up a cluster in an isolated environment for Azure IoT Operations scenarios, see [Configure Layered Network Management service to enable Azure IoT Operations in an isolated network](howto-configure-aks-edge-essentials-layered-network.md).
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articles/iot-operations/manage-layered-network/howto-configure-aks-edge-essentials-layered-network.md

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In this example, you Arc-enable AKS Edge Essentials or K3S clusters in the isolated layer of an ISA-95 network environment using the Layered Network Management service running in one level above.
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The network and cluster architecture are described as follows:
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- A level 4 single-node cluster running on a host machine with:
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- Direct access to the internet.
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- A secondary network interface card (NIC) connected to the local network. The secondary NIC makes the level 4 cluster visible to the level 3 local network.
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- A level 4 single-node cluster running on a host machine with direct access to the internet.
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- A custom DNS in the local network. See the [Configure custom DNS](howto-configure-layered-network.md#configure-custom-dns) for the options. To set up the environment quickly, you should use the *CoreDNS* approach instead of a DNS server.
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- The level 3 cluster connects to the Layered Network Management service as a proxy for all the Azure Arc related traffic.
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- The level 3 cluster that is blocked from accessing internet. It connects to the Layered Network Management service as a proxy for all the Azure Arc related traffic.
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![Diagram showing a level 4 and level 3 AKS Edge Essentials network.](./media/howto-configure-aks-edge-essentials-layered-network/arc-enabled-aks-edge-essentials-cluster.png)
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For more information, see [Example of logical segmentation with minimum hardware](howto-configure-layered-network.md#example-of-logical-segmentation-with-minimum-hardware).
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### Configure level 4 AKS Edge Essentials and Layered Network Management
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![Diagram of a logical isolated network configuration.](./media/howto-configure-layered-network/logical-network-segmentation.png)
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### Configure level 4 Kubernetes cluster and Layered Network Management
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After you configure the network, you need to configure the level 4 Kubernetes cluster. Complete the steps in [Configure IoT Layered Network Management level 4 cluster](./howto-configure-l4-cluster-layered-network.md). In the article, you:
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- Set up a Windows 11 machine and configure AKS Edge Essentials.
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- Set up a Windows 11 machine and configure AKS Edge Essentials or set up K3S Kubernetes on an Ubuntu machine.
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- Deploy and configure the Layered Network Management service to run on the cluster.
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You need to identify the **local IP** of the host machine. In later steps, you direct traffic from level 3 to this IP address with a custom DNS.
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### Configure the custom DNS
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In the local network, you need to set up the mechanism to redirect all the network traffic to the Layered Network Management service. Use the steps in [Configure custom DNS](howto-configure-layered-network.md#configure-custom-dns). In the article:
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- If you choose the *CoreDNS* approach, you can skip to *Configure and Arc enable level 3 cluster* and configure the CoreDNS before your Arc-enable the level 3 cluster.
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- If you choose to use a *DNS server*, follow the steps to set up the DNS server before you move to the next section in this article.
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In the local network, you need to set up the mechanism to redirect all the network traffic to the Layered Network Management service. Use the steps in [Configure custom DNS](howto-configure-layered-network.md#configure-custom-dns). In the article:
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- If you choose the *CoreDNS* approach, you can skip to *Configure and Arc enable level 3 cluster* and configure the CoreDNS before your Arc-enable the level 3 cluster.
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- If you choose to use a *DNS server*, follow the steps to set up the DNS server before you move to the next section in this article.
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### Configure and Arc enable level 3 cluster
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Once your level 3 cluster is Arc-enabled, you can deploy IoT Operations to the cluster. All IoT Operations components are deployed to the level 3 cluster and connect to Arc through the Layered Network Management service. The data pipeline also routes through the Layered Network Management service.
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![Network diagram that shows IoT Operations running on a level 3 cluster.](./media/howto-configure-aks-edge-essentials-layered-network/iot-operations-level-3-cluster.png)
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![Network diagram that shows IoT Operations running on a level 3 cluster.](./media/howto-configure-layered-network/logical-network-segmentation-2.png)
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Follow the steps in [Quickstart: Deploy Azure IoT Operations to an Arc-enabled Kubernetes cluster](../get-started/quickstart-deploy.md) to deploy IoT Operations to the level 3 cluster.
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