Azure CNI Overlay for Application Gateway for Containers and Application Gateway Ingress Controller

jonw

Microsoft

Aug 29, 2025

We are thrilled to announce the general availability of Azure CNI Overlay for Application Gateway for Containers and Application Gateway Ingress Controller (AGIC)! This feature enables customers to use AKS clusters with Azure CNI Overlay for IP scalability along with a performant L7 ingress solution!

What are Azure CNI Overlay and Application Gateway?

Azure CNI Overlay leverages logical network spaces for pod IP assignment management (IPAM). This provides enhanced IP scalability with reduced management responsibilities.

Application Gateway for Containers is the latest and most recommended container L7 load-balancing solution. It introduces a new scalable control plane and data plane to address the performance demands and modern workloads being deployed to AKS clusters on Azure.

Azure network control plane configures routing between Application Gateway and overlay pods.

Why is the feature needed?

As businesses increasingly use containerized solutions, managing container networks at scale has become a priority. Within container network management, IP address exhaustion, scalability and application load balancing performance are highly requested and discussed in many forums.

Azure CNI Overlay is the default container networking IPAM mode on AKS. In the overlay design, AKS nodes use IPs from Azure virtual network (VNet) IP address range and pods are addressed from an overlay IP address range. The overlay pods can communicate with each other directly via a different routing domain. Overlay IP addresses can be reused across multiple clusters in the same VNet, provisioning a solution for IP exhaustion and increasing IP scale to over 1M.

Azure CNI Overlay supporting Application Gateway for Containers provides customers with a more performant, reliable, and scalable container networking solution. Meanwhile, Azure CNI Overlay supporting AGIC provides customers with full feature parity if they choose to upgrade AKS clusters from kubenet to Azure CNI Overlay.

Key Benefits

High scale with Azure CNI Overlay combined with a high-performance ingress solution

Azure CNI Overlay provides direct pod to pod routing with high IP scale using direct azure native routing with no encapsulation overhead. IPs can be reused across clusters in the same VNET allowing customers to conserve IP addresses.

Application Gateway for Containers is the latest and most recommended container L7 load-balancing solution.

Installing Application Gateway for Containers on AKS clusters with Azure CNI Overlay provides customers with the best solution combination of IP scalability and ingress solution on Azure.

Feature parity between kubenet and Azure CNI Overlay

With the retirement announcement of kubenet, we expect to see customers upgrade their AKS container networking solution from kubenet to Azure CNI Overlay soon. This feature allows customers to maintain business continuity during the transitioning process.