Grounding Copilot Studio Agents with Azure AI Search and Foundry IQ
An employee opens the HR agent and asks, "How much PTO do I accrue each month?" A few minutes later, someone else asks, "Where is the official code of ethics policy?" Those sound like the same problem. They are not. The first person needs a grounded answer they can understand. The second person needs a link to the right document quickly, without interpretation. If you design for one experience, the other one feels broken. That is usually where knowledge-agent projects start to get messy. “Grounding” can sound like one switch you turn on, but in practice it is a spectrum: from zero-code classic search, to agentic retrieval over a knowledge base, to a forced-grounding agent that synthesizes answers when synthesis is required. The easier way to think about it is this: who is doing the retrieval work, and what does the user need back? This post walks through five working retrieval patterns for an “Ask HR” agent built on Copilot Studio, Azure AI Search, and Foundry IQ. Each one is running code in the companion sample repo: foundry-copilot-hr-policy-knowledge. Each has a clear “use this when,” and the five patterns share the same reusable knowledge base so you can layer them on without re-indexing. By the end, you should have a decision tree you can reuse for your own knowledge source, whether that is HR policy, product docs, or support runbooks. Scope: companion sample for learning and experimentation, not production-ready deployment. Review the Azure Well-Architected Framework for reliability, security, cost, and operational hardening before you ship. The scenario: one index, many front doors Here is the setup. The sample answers employee questions from a small corpus of internal HR policy documents: PTO accrual, hiring rules, code of ethics, blood-borne pathogen procedures, and dozens more. Underneath every pattern is one foundation: an Azure AI Search index named hr-policy-index, populated by an indexer and skillset that chunk and vectorize the documents. Patterns A, C, and the Hosted Agent query that index directly. Patterns A2 and B add a Foundry IQ knowledge base named hr-knowledge-base on top of the same index for agentic retrieval. That layering is the part to pay attention to. The retrieval assets stay separate from the orchestration layer, so you can start with the simplest pattern, prove value quickly, and move to a more capable one later without re-indexing. Two questions that decide everything Before we get into the patterns, it helps to define the two retrieval terms I use throughout the rest of the post: Classic search, index-first retrieval: one hybrid (keyword + vector) query against an Azure AI Search index, ranked and returned. Fast and predictable. Agentic retrieval, the knowledge base plans multiple sub-queries from the user's question, runs them in parallel, re-ranks, and merges the results before the agent composes an answer. Higher quality on complex, multi-part questions. If you want the fuller picture of how these two approaches map to retrieval-augmented generation, the Azure AI Search team's RAG and generative AI overview walks through the trade-offs and uses a similar HR/PTO example. Once those terms are clear, the decision tree comes down to three practical questions: Q1: Do users need an answer or are they really trying to find the right document? If they just need the document, stay on the locator path. If they need the policy explained or summarized, move into the answer-synthesis path. QL: Is the content in a citation-friendly knowledge base? For example, SharePoint content or Azure AI Search content with a reliable blob_url. If yes, Copilot Studio can usually handle this with native citation cards in Pattern A. If not, use Pattern C with the dual tool /api/lookup path so the agent can return the exact document link. Q2: Do you actually need an LLM agent in the middle? If the answer is no, keep it simple: use classic search or agentic retrieval over the knowledge base. If the answer is yes, move into the agent path. QK: For that non-agent path, is classic index search enough, or do you need agentic KB retrieval? Classic search points to Pattern A. Agentic retrieval over the knowledge base points to Pattern A2. Q3: If you need an agent, do you want Foundry to run the request loop, or do you need to self-host it? If Foundry can manage the runtime, use Pattern B. If you need the request loop in your own container, use the Hosted Agent. That is the decision tree in plain terms: Q1 decides whether this is a document-locator experience or an answer-synthesis experience. Q2 decides whether you need an LLM agent at all. Q3 is only about where the agent runs, either Foundry or your container. It does not change the front door; Copilot Studio can still be the user-facing experience. How the sample repo is organized The repo follows the same flow as the post. Start with docs/DataPipelineAndTesting.md to understand how the HR policy corpus is indexed, tested, and validated. Use docs/RetrievalPatterns.md as the decision model for choosing between classic search, agentic retrieval, forced grounding, and hosted runtime options. Then use the pattern-specific docs when you are ready to wire each path. For Copilot Studio patterns, docs/CopilotStudioIntegration.md maps to Pattern A, while docs/CopilotStudioHybridExample.md maps to Pattern C and the dual-tool locator flow. For the more advanced agent paths, docs/FoundryAgentArchitecture.md covers Pattern B and the hosted agent architecture. docs/Distribution-M365-Teams.md shows how the agent can be distributed through Microsoft 365 and Teams once the retrieval pattern is working. The rest of the post is that tree, one branch at a time. Pattern A: Direct index (classic search, zero agent code) Start here. Copilot Studio queries hr-policy-index directly through its built-in Knowledge action. No custom agent code runs in the answer path. The sample only owns the index, skillset, and indexing pipeline. Populate the index (server-side indexer + skillset handles chunking and vectorization): uv run python scripts/index_knowledge_base_integrated_vectorization.py # Builds hr-policy-index; a client-side alternative exists for dev/test What you get: very low latency in the sample, roughly 1-2 seconds, no LLM cost in the retrieval path, and native citation cards. When the source documents carry a blob_url or metadata_storage_path, Copilot Studio can render a click-through card straight to the document. For many "where is the policy?" questions, that may be enough. The honest limitation: Pattern A is still classic search. It does not force synthesis. If Copilot Studio generates an answer from retrieved snippets, it may paraphrase a policy in a way that is close, but not precise enough. For HR policy, that matters. If exact wording matters, that is your sign to step up to Pattern B. Pattern A2: Copilot Studio meets Foundry IQ (agentic retrieval, no prompt agent) This is the pattern I would look at when you want better retrieval quality without taking on the overhead of a full prompt agent. In the Copilot Studio new agent experience preview, an agent connects directly to a Foundry IQ knowledge base through Microsoft IQ, with no Foundry prompt agent in between. You reuse the same hr-knowledge-base on top of the same hr-policy-index (one command: python -m src.agents.create_foundry_agent), but retrieval is now agentic: the knowledge base plans sub-queries, retrieves in parallel, reranks, and hands merged results to the agent. Wiring it takes a few clicks in Copilot Studio (step-by-step on Microsoft Learn): Build → Microsoft IQ → Foundry IQ → Create new connection Choose Microsoft Entra ID Integrated authentication Select hr-knowledge-base Add to agent A2 is worth the upgrade from A for two reasons. First, you get agentic-retrieval quality without having to build, deploy, or maintain a prompt agent. The knowledge base becomes the reusable asset you improve in Microsoft Foundry, not something you keep reworking inside each Copilot Studio agent. Second, when configured with Microsoft Entra ID Integrated authentication, retrieval can return ACL-trimmed results per user. Each person sees content based on their access. Foundry IQ knowledge bases can also inherit enterprise-readiness controls such as customer-managed keys, network isolation, and Entra ID. A single knowledge base can also federate across multiple knowledge sources in parallel. Use A2 when you want stronger hybrid retrieval quality without taking on the overhead of operating a full agent. Pattern B: Foundry Agent Service with forced grounding When answers need to be synthesized and grounded, publish a prompt agent to Microsoft Foundry with Foundry Agent Service. In the sample, the agent uses an MCPTool pointing at the knowledge-base endpoint, with tool_choice="required" so the model retrieves policy chunks before answering. # src/agents/hr_policy_agent.py (excerpt) agent = PromptAgentDefinition( model=model_deployment_name, # e.g. gpt-5-mini instructions=HR_POLICY_INSTRUCTIONS, tools=[mcp_tool], # KB MCP endpoint tool_choice="required", # require retrieval before answering ) Invoke it through the OpenAI client the project hands you: client = project.get_openai_client() response = client.responses.create( input="How does PTO accrue for a new hire?", extra_body={"agent_reference": {"name": agent_name}}, ) What you get: synthesized answers with grounding and inline [Policy XXXX - Title] citations, all from a single SDK call on a managed runtime. The trade-off: synthesis takes longer. In the sample, answers take roughly 10-14 seconds versus 1-2 seconds for classic search. For policy explanations, that extra time can be worth it because the user gets a composed, grounded answer instead of a list of snippets. Pattern C: Dual-tool routing for deterministic document locators Some questions do not need an essay; they just need the right URL, fast. Pattern C lets Copilot Studio route per turn: "Where is the PTO policy?" → POST /api/lookup, a deterministic endpoint with no LLM, roughly 1-2 seconds, returning the document URL verbatim in the answer body. "How many PTO hours do I accrue?" → hand off to Pattern A or B for a synthesized answer. POST /api/lookup { "query": "PTO policy" } → 200 OK { "policy_id": "12345", "title": "Types of Leave: Paid Time Off (PTO)", "blob_url": "https://.../12345-pto.pdf" } Reach for Pattern C when native citations are not enough. For example, use it when you need fast locator responses, the URL printed directly in the answer body, deterministic and auditable output, or support for a source that is not citation-friendly. The endpoint lives at src/backend/main.py:/api/lookup, with its contract in copilot/openapi-lookup-v2.json. Hosted Agent: the same agent on your own runtime If you need to own the request loop, custom authentication, side-car services, or infrastructure that stays inside your boundary, run the agent yourself. The Hosted Agent is the self-hosted version of the same idea: a container built on Microsoft Agent Framework with FoundryChatClient. It supports both classic and agentic retrieval through one environment variable: RETRIEVAL_MODE Strategy Retrieval type tool (default) Custom @tool search_hr_policies (hybrid + semantic) Classic search context-semantic Built-in AzureAISearchContextProvider before each turn Classic search context-agentic AzureAISearchContextProvider over hr-knowledge-base Agentic retrieval The context-* modes use Agent Framework’s out-of-the-box RAG context provider. Retrieval runs automatically before each model call with standardized context and citation prompts, so the agent does not have to call a search tool explicitly. That gives the self-hosted path parity with the managed Foundry path across both retrieval types. Copilot Studio can still be the front door. Q3 in the decision tree is really about where the request loop runs, not who greets the user. Choosing a pattern Pattern Orchestrator Retrieval Latency (sample) Best for A Copilot Studio Classic ~1-2 s Start here, native citations, no agent code A2 Copilot Studio → Foundry IQ Agentic ~2-4 s Agentic quality, no agent to maintain B Foundry Agent Service Classic/agentic via MCP ~10-14 s Forced-grounding synthesis in Foundry C Copilot Studio (router) None for lookup ~1-2 s Deterministic, verbatim document locators Hosted Agent Framework container Classic + agentic ~10-14 s Self-hosted runtime, custom auth A simple way to read the table: start at A, move to A2 when you want agentic retrieval without operating an agent, choose B when each answer needs to be synthesized and grounded in Foundry, add C for high-volume locator traffic, and pick the Hosted Agent when you need the runtime on your own infrastructure. These are not mutually exclusive. A mature agent often routes locator queries to C and content questions to A2 or B. What's next? Try it: clone the sample and follow Steps 1-3 of the walkthrough to stand up Pattern A, provision hr-knowledge-base, connect Copilot Studio, and ask a question in minutes. Go agentic: wire the same knowledge base into the Copilot Studio new agent experience via Foundry IQ (Pattern A2) and compare answer quality side by side. Learn more: explore agentic retrieval in Azure AI Search, Foundry IQ, and Microsoft Agent Framework. Adapt it: swap the HR policy corpus for your own product docs, support runbooks, or internal knowledge source, then compare Pattern A, A2, and B against the same user questions. Use the repo-doc map: start with docs/RetrievalPatterns.md for the decision model, docs/CopilotStudioIntegration.md for Pattern A, docs/CopilotStudioHybridExample.md for Pattern C, docs/FoundryAgentArchitecture.md for Pattern B and Hosted Agent, and docs/DataPipelineAndTesting.md for ingestion and validation. My recommendation: start simple, prove the index works, and move up the stack only when the use case needs it. Some questions need a trusted link. Others need a grounded explanation. A strong architecture supports both without forcing every request through the same path. References Copilot Studio + Foundry IQ Connect to Foundry IQ from an agent Foundry IQ FAQ Foundry IQ / knowledge layer What is Foundry IQ? Connect a Foundry IQ knowledge base to Foundry Agent Service Azure AI Search, retrieval Agentic retrieval overview RAG and generative AI in Azure AI Search Classic vs agentic search Create a knowledge base Create a knowledge source Hybrid search Semantic ranking Quickstart: agentic retrieval Tutorial: end-to-end agentic retrieval solution Microsoft Foundry Agent Service (Pattern B) Foundry Agent Service overview Microsoft Agent Framework (Hosted Agent) Microsoft Agent Framework overview Hosted MCP tools Governance Azure Well-Architected Framework Related Microsoft Foundry blog posts Foundry IQ is now in Copilot Studio Answers You Can Trust: Grounding Enterprise Agents with Foundry IQ Foundry IQ: Unlocking ubiquitous knowledge for agentsFoundry IQ: Improve recall by up to 54% with knowledge bases
Foundry IQ: Improve recall by up to 54% with knowledge bases. Foundry IQ (Azure AI Search) has improved its agentic retrieval engine resulting in better answer quality and improved token cost savings. We compared standalone retrieval tools to knowledge bases using the challenging BrowseComp-Plus benchmark and found: Replacing single-shot RAG with a knowledge base improves evidence recall by up to 46%. Combining a smaller agent model with agentic retrieval improves evidence recall by up to 54% while controlling costs and increasing agent responsiveness. In both cases, the amount of retrieval tool calls your agent makes is reduced, resulting in 34% token cost savings.Announcing the Azure AI RAG Vercel Next.JS Template
We’re excited to introduce the Azure AI RAG Vercel Next.JS Template, now available in the Vercel Templates Marketplace. This new template empowers developers to easily deploy retrieval-augmented generation (RAG) applications using Azure AI Search and Azure OpenAI—all with just a few clicks. What’s Included? One-Click RAG Integration: Quickly stand up a RAG application that incorporates battle-tested retrieval from Azure AI Search, and advanced modes like Hybrid Search and Semantic Ranking. This lets you ground Azure OpenAI model responses in relevant, up-to-date data with the top-quality candidates. Fully-Managed AI Stack: Leverage Vercel’s global hosting platform and the Vercel AI SDK’s Azure provider to run inference and embedding generation on Azure OpenAI. Modern Web App Foundation: Built with Next.js and integrate with the useChat hook for real-time streaming responses, this template ensures a smooth user experience. It also includes pre-configuration for Tailwind CSS, and a vector embedding retrieval workflow backed by Azure AI Search. Why It Matters By combining Vercel’s performance-optimized hosting with Azure AI’s robust retrieval and OpenAI model integrations, this template slashes setup time for a RAG solution. Instead of spending days configuring vector databases, embedding pipelines, and streaming endpoints, you can start delivering answers and insights in minutes with a powerful web framework in Next.JS. It’s a powerful jumpstart for any project that wants to harness the powers of Generative AI. Learn More & Get Started Today Template: Azure AI RAG Chatbot GitHub Repo: Azure-Samples/azure-ai-vercel-rag-starter: Sample retrieval-augmented generation (RAG) app template using Azure AI Search, Azure OpenAI, and Vercel AI SDK Learn more about Azure AI Search: Azure AI Search Learn more about Azure OpenAI: Azure OpenAIImproved data processing features in Foundry IQ: Richer content extraction and data enrichment
Foundry IQ (Azure AI Search) introduces new capabilities in preview focused on improving enterprise data pipelines for RAG and agentic retrieval scenarios. The release expands SharePoint indexing support to include ASPX pages, SharePoint Lists, recursive subsite discovery, and source traceability, enabling broader access to enterprise knowledge across intranet content, operational lists, and document libraries. New integrations with Content Understanding in Foundry Tools improve document extraction, semantic chunking, structure preservation, and AI-generated image descriptions for complex documents such as PDFs. These capabilities help preserve layout, reading order, tables, and visual context during ingestion, improving grounding quality and retrieval accuracy in enterprise AI applications.Foundry IQ: New governance and enterprise AI security capabilities
Enterprise AI isn’t just about better retrieval—it’s about secure access to business‑critical content. Discover how Foundry IQ (Azure AI Search) enables governance, compliance, and private connectivity across agentic retrieval workflows. We are introducing the following features: - Incremental SharePoint permissions sync for indexed document content, SharePoint Lists and ASPX pages. - Purview sensitivity labels in Foundry IQ knowledge bases - Purview auditing for elevated admin queries - Private connectivity support between for Foundry IQ and Foundry resources via NSP
Vector Drift in Azure AI Search: Three Hidden Reasons Your RAG Accuracy Degrades After Deployment
What Is Vector Drift? Vector drift occurs when embeddings stored in a vector index no longer accurately represent the semantic intent of incoming queries. Because vector similarity search depends on relative semantic positioning, even small changes in models, data distribution, or preprocessing logic can significantly affect retrieval quality over time. Unlike schema drift or data corruption, vector drift is subtle: The system continues to function Queries return results But relevance steadily declines Cause 1: Embedding Model Version Mismatch What Happens Documents are indexed using one embedding model, while query embeddings are generated using another. This typically happens due to: Model upgrades Shared Azure OpenAI resources across teams Inconsistent configuration between environments Why This Matters Embeddings generated by different models: Exist in different vector spaces Are not mathematically comparable Produce misleading similarity scores As a result, documents that were previously relevant may no longer rank correctly. Recommended Practice A single vector index should be bound to one embedding model and one dimension size for its entire lifecycle. If the embedding model changes, the index must be fully re-embedded and rebuilt. Cause 2: Incremental Content Updates Without Re-Embedding What Happens New documents are continuously added to the index, while existing embeddings remain unchanged. Over time, new content introduces: Updated terminology Policy changes New product or domain concepts Because semantic meaning is relative, the vector space shifts—but older vectors do not. Observable Impact Recently indexed documents dominate retrieval results Older but still valid content becomes harder to retrieve Recall degrades without obvious system errors Practical Guidance Treat embeddings as living assets, not static artifacts: Schedule periodic re-embedding for stable corpora Re-embed high-impact or frequently accessed documents Trigger re-embedding when domain vocabulary changes meaningfully Declining similarity scores or reduced citation coverage are often early signals of drift. Cause 3: Inconsistent Chunking Strategies What Happens Chunk size, overlap, or parsing logic is adjusted over time, but previously indexed content is not updated. The index ends up containing chunks created using different strategies. Why This Causes Drift Different chunking strategies produce: Different semantic density Different contextual boundaries Different retrieval behavior This inconsistency reduces ranking stability and makes retrieval outcomes unpredictable. Governance Recommendation Chunking strategy should be treated as part of the index contract: Use one chunking strategy per index Store chunk metadata (for example, chunk_version) Rebuild the index when chunking logic changes Design Principles Versioned embedding deployments Scheduled or event-driven re-embedding pipelines Standardized chunking strategy Retrieval quality observability Prompt and response evaluation Key Takeaways Vector drift is an architectural concern, not a service defect It emerges from model changes, evolving data, and preprocessing inconsistencies Long-lived RAG systems require embedding lifecycle management Azure AI Search provides the controls needed to mitigate drift effectively Conclusion Vector drift is an expected characteristic of production RAG systems. Teams that proactively manage embedding models, chunking strategies, and retrieval observability can maintain reliable relevance as their data and usage evolve. Recognizing and addressing vector drift is essential to building and operating robust AI solutions on Azure. Further Reading The following Microsoft resources provide additional guidance on vector search, embeddings, and production-grade RAG architectures on Azure. Azure AI Search – Vector Search Overview - https://learn.microsoft.com/azure/search/vector-search-overview Azure OpenAI – Embeddings Concepts - https://learn.microsoft.com/en-us/azure/ai-foundry/openai/how-to/embeddings?view=foundry-classic&tabs=csharp Retrieval-Augmented Generation (RAG) Pattern on Azure - https://learn.microsoft.com/en-us/azure/search/retrieval-augmented-generation-overview?tabs=videos Azure Monitor – Observability Overview - https://learn.microsoft.com/azure/azure-monitor/overviewAnswer synthesis in Foundry IQ: Quality metrics across 10,000 queries
With answers, you can control your entire RAG pipeline directly in Foundry IQ by Azure AI Search, without integrations. Responding only when the data supports it, answers delivers grounded, steerable, citation-rich responses and traces each piece of information to its original source. Here’s how it works and how it performed across our experiments.Turn Enterprise Knowledge into Answers with Copilot Studio and Azure AI Search
From the Field: Why This Integration Works As an experienced AI Cloud Solution Architect working in Greater China Region (GCR), I’ve seen one emerging pattern that delivers quick wins for some of my customers: combining Microsoft Copilot Studio with an existing Azure AI Search index. Teams choose this approach because it delivers two outcomes immediately: business users get grounded, reliable answers, and enterprises avoid re-building pipelines or re-platforming knowledge stores. This guide shows exactly how to connect Copilot Studio to an Azure AI Search index that is already live, so your copilot can answer confidently using your enterprise documents. What We Assume Is Already Ready To stay focused on the integration step, we assume: You have an Azure AI Search service deployed You have an index containing vectorized content (manuals, PDFs, policies, FAQs) Your platform/data team already handled ingestion, embeddings, and indexing In short, your Azure AI Search endpoint and admin key are ready, and the index already contains chunked content with embeddings. Step 1 - Collect Your Azure AI Search Connection Details From the Azure AI Search resource: Endpoint URL Azure AI Search → Overview → Url: https://<your-search-service>.search.windows.net Admin Key Azure AI Search → Keys Use either the primary or secondary key. Governance tip: For production, rotate keys regularly and use managed identities when possible. Step 2 - Add Azure AI Search as Knowledge Inside Copilot Studio Open your Copilot Studio agent Go to the Knowledge tab Select Add knowledge, choose Azure AI Search Provide: Endpoint URL Admin key Create or select the connection Choose your existing index from the dropdown Select Add to agent Step 3 - Test a Grounded Response Open the Test copilot pane and ask a question your indexed content can answer, such as: “What are the different licensing options available for Power Platform?” Verify that: The Activity Map shows Azure AI Search being invoked The answer reflects the correct document in your index Citations or references appear where applicable Conclusion Business value: You can activate grounded, explainable answers in Copilot Studio immediately by reusing your existing Azure AI Search index - no re-platforming, no new pipelines. Team model: Data/Platform teams own ingestion, enrichment, and vectorization. Business teams build and refine the copilot experience in Copilot Studio. Scale and governance: All components stay inside Azure, with enterprise-grade security, RBAC, and operational monitoring, while enabling low‑code agility for makers. For the full end-to-end lab (storage setup, embeddings, index creation), see: 🔗 https://github.com/Azure/Copilot-Studio-and-Azure (Lab 1.4). Acknowledgements This tutorial builds on foundational work by my EMEA colleague Pablo Carceller, whose GitHub repo on Copilot Studio and Azure has helped teams worldwide accelerate real customer implementations. 👉 GitHub - Copilot Studio and Azure: https://github.com/Azure/Copilot-Studio-and-Azure I would also like to thank the broader Cloud Accelerate Factory GCR team for their contributions, insights, and active collaboration in validating this pattern across customer engagements. Special appreciation to our AI Architects Dr. Longyu Qi, Jian (Jason) Shao, Lei (Leo) Ma, and Ethan Tseng, as well as our PM partners Yunxi (Rayne) Jin and Emma Wang, whose feedback and field experiences helped shape and refine this guide. Image credits: demo visuals adapted from materials by Pablo Carceller (GitHub Lab 1.4).Microsoft Foundry: Unlock Adaptive, Personalized Agents with User-Scoped Persistent Memory
From Knowledgeable to Personalized: Why Memory Matters Most AI agents today are knowledgeable — they ground responses in enterprise data sources and rely on short‑term, session‑based memory to maintain conversational coherence. This works well within a single interaction. But once the session ends, the context disappears. The agent starts fresh, unable to recall prior interactions, user preferences, or previously established context. In reality, enterprise users don’t interact with agents exclusively in one‑off sessions. Conversations can span days, weeks, evolving across multiple interactions rather than isolated sessions. Without a way to persist and safely reuse relevant context across interactions, AI agents remain efficient in the short term be being stateful within a session, but lose continuity over time due to their statelessness across sessions. Bridging this gap between short-term efficiency and long‑term adaptation exposes a deeper challenge. Persisting memory across sessions is not just a technical decision; in enterprise environments, it introduces legitimate concerns around privacy, data isolation, governance, and compliance — especially when multiple users interact with the same agent. What seems like an obvious next step quickly becomes a complex architectural problem, requiring organizations to balance the ability for agents to learn and adapt over time with the need to preserve trust, enforce isolation boundaries, and meet enterprise compliance requirements. In this post, I’ll walk through a practical design pattern for user‑scoped persistent memory, including a reference architecture and a deployable sample implementation that demonstrates how to apply this pattern in a real enterprise setting while preserving isolation, governance, and compliance. The Challenge of Persistent Memory in Enterprise AI Agents Extending memory beyond a single session seems like a natural way to make AI agents more adaptive. Retaining relevant context over time — such as preferences, prior decisions, or recurring patterns — would allow an agent to progressively tailor its behavior to each user, moving from simple responsiveness toward genuine adaptation. In enterprise environments, however, persistence introduces a different class of risk. Storing and reusing user context across interactions raises questions of privacy, data isolation, governance, and compliance — particularly when multiple users interact with shared systems. Without clear ownership and isolation boundaries, naïvely persisted memory can lead to cross‑user data leakage, policy violations, or unclear retention guarantees. As a result, many systems default to ephemeral, session‑only memory. This approach prioritizes safety and simplicity — but does so at the cost of long‑term personalization and continuity. The challenge, then, is not whether agents should remember, but how memory can be introduced without violating enterprise trust boundaries. Persistent Memory: Trade‑offs Between Abstraction and Control As AI agents evolve toward more adaptive behavior, several approaches to agent memory are emerging across the ecosystem. Each reflects a different set of trade-offs between abstraction, flexibility, and control — making it useful to briefly acknowledge these patterns before introducing the design presented here. Microsoft Foundry Agent Service includes a built‑in memory capability (currently in Preview) that enables agents to retain context beyond a single interaction. This approach integrates tightly with the Foundry runtime and abstracts much of the underlying memory management, making it well suited for scenarios that align closely with the managed agent lifecycle. Another notable approach combines Mem0 with Azure AI Search, where memory entries are stored and retrieved through vector search. In this model, memory is treated as an embedding‑centric store that emphasizes semantic recall and relevance. Mem0 is intentionally opinionated, defining how memory is structured, summarized, and retrieved to optimize for ease of use and rapid iteration. Both approaches represent meaningful progress. At the same time, some enterprises require an approach where user memory is explicitly owned, scoped, and governed within their existing data architecture — rather than implicitly managed by an agent framework or memory library. These requirements often stem from stricter expectations around data isolation, compliance, and long‑term control. User-Scoped Persistent Memory with Azure Cosmos DB The solution presented in this post provides a practical reference implementation for organizations that require explicit control over how user memory is stored, scoped, and governed. Rather than embedding long‑term memory implicitly within the agent runtime, this design models memory as a first‑class system component built on Azure Cosmos DB. At a high level, the architecture introduces user‑scoped persistent memory: a durable memory layer in which each user’s context is isolated and managed independently. Persistent memory is stored in Azure Cosmos DB containers partitioned by user identity and consists of curated, long‑lived signals — such as preferences, recurring intent, or summarized outcomes from prior interactions — rather than raw conversational transcripts. This keeps memory intentional, auditable, and easy to evolve over time. Short‑term, in‑session conversation state remains managed by Microsoft Foundry on the server side through its built‑in conversation and thread model. By separating ephemeral session context from durable user memory, the system preserves conversational coherence while avoiding uncontrolled accumulation of long‑term state within the agent runtime. This design enables continuity and personalization across sessions while deliberately avoiding the risks associated with shared or global memory models, including cross‑user data leakage, unclear ownership, and unintended reuse of context. Azure Cosmos DB provides enterprises with direct control over memory isolation, data residency, retention policies, and operational characteristics such as consistency, availability, and scale. In this architecture, knowledge grounding and memory serve complementary roles. Knowledge grounding ensures correctness by anchoring responses in trusted enterprise data sources. User‑scoped persistent memory ensures relevance by tailoring interactions to the individual user over time. Together, they enable trustworthy, adaptive AI agents that improve with use — without compromising enterprise boundaries. Architecture Components and Responsibilities Identity and User Scoping Microsoft Entra ID (App Registrations) — provides the frontend a client ID and tenant ID so the Microsoft Authentication Library (MSAL) can authenticate users via browser redirect. The oid (Object ID) claim from the ID token is used as the user identifier throughout the system. Agent Runtime and Orchestration Microsoft Foundry — serves as the unified AI platform for hosting models, managing agents, and maintaining conversation state. Foundry manages in‑session and thread‑level memory on the server side, preserving conversational continuity while keeping ephemeral context separate from long‑term user memory. Backend Agent Service — implements the AI agent using Microsoft Foundry’s agent and conversation APIs. The agent is responsible for reasoning, tool‑calling decisions, and response generation, delegating memory and search operations to external MCP servers. Memory and Knowledge Services MCP‑Memory — MCP server that hosts tools for extracting structured memory signals from conversations, generating embeddings, and persisting user‑scoped memories. Memories are written to and retrieved from Azure Cosmos DB, enforcing strict per‑user isolation. MCP‑Search — MCP server exposing tools for querying enterprise knowledge sources via Azure AI Search. This separation ensures that knowledge grounding and memory retrieval remain distinct concerns. Azure Cosmos DB for NoSQL — provides the durable, serverless document store for user‑scoped persistent memory. Memory containers are partitioned by user ID, enabling isolation, auditable access, configurable retention policies, and predictable scalability. Vector search is used to support semantic recall over stored memory entries. Azure AI Search — supplies hybrid retrieval (keyword and vector) with semantic reranking over the enterprise knowledge index. An integrated vectorizer backed by an embedding model is used for query‑time vectorization. Models text‑embedding‑3‑large — used for generating vector embeddings for both user‑scoped memories and enterprise knowledge search. gpt‑5‑mini — used for lightweight analysis tasks, such as extracting structured memory facts from conversational context. gpt‑5.1 — powers the AI agent, handling multi‑turn conversations, tool invocation, and response synthesis. Application and Hosting Infrastructure Frontend Web Application — a React‑based web UI that handles user authentication and presents a conversational chat interface. Azure Container Apps Environment — provides a shared execution environment for all services, including networking, scaling, and observability. Azure Container Apps — hosts the frontend, backend agent service, and MCP servers as independently scalable containers. Azure Container Registry — stores container images for all application components. Try It Yourself Demonstration of user‑scoped persistent memory across sessions. To make these concepts concrete, I’ve published a working reference implementation that demonstrates the architecture and patterns described above. The complete solution is available in the Agent-Memory GitHub repository. The repository README includes prerequisites, environment setup notes, and configuration details. Start by cloning the repository and moving into the project directory: git clone https://github.com/mardianto-msft/azure-agent-memory.git cd azure-agent-memory Next, sign in to Azure using the Azure CLI: az login Then authenticate the Azure Developer CLI: azd auth login Once authenticated, deploy the solution: azd up After deployment is complete, sign in using the provided demo users and interact with the agent across multiple sessions. Each user’s preferences and prior context are retained independently, the interaction continues seamlessly after signing out and returning later, and user context remains fully isolated with no cross‑identity leakage. The solution also includes a knowledge index initialized with selected Microsoft Outlook Help documentation, which the agent uses for knowledge grounding. This index can be easily replaced or extended with your own publicly accessible URLs to adapt the solution to different domains. Looking Ahead: Personalized Memory as a Foundation for Adaptive Agents As enterprise AI agents evolve, many teams are looking beyond larger models and improved retrieval toward human‑centered personalization at scale — building agents that adapt to individual users while operating within clearly defined trust boundaries. User‑scoped persistent memory enables this shift. By treating memory as a first‑class, user‑owned component, agents can maintain continuity across sessions while preserving isolation, governance, and compliance. Personalization becomes an intentional design choice, aligning with Microsoft’s human‑centered approach to AI, where users retain control over how systems adapt to them. This solution demonstrates how knowledge grounding and personalized memory serve complementary roles. Knowledge grounding ensures correctness by anchoring responses in trusted enterprise data. Personalized memory ensures relevance by tailoring interactions to the individual user. Together, they enable context‑aware, adaptive, and personalized agents — without compromising enterprise trust. Finally, this solution is intentionally presented as a reference design pattern, not a prescriptive architecture. It offers a practical starting point for enterprises designing adaptive, personalized agents, illustrating how user‑scoped memory can be modeled, governed, and integrated as a foundational capability for scalable enterprise AI.
