Introducing GenAI Gateway Capabilities in Azure API Management
We are thrilled to announce GenAI Gateway capabilities in Azure API Management – a set of features designed specifically for GenAI use cases. Azure OpenAI service offers a diverse set of tools, providing access to advanced models like GPT3.5-Turbo to GPT-4 and GPT-4 Vision, enabling developers to build intelligent applications that can understand, interpret, and generate human-like text and images. One of the main resources you have in Azure OpenAI is tokens. Azure OpenAI assigns quota for your model deployments expressed in tokens-per-minute (TPMs) which is then distributed across your model consumers that can be represented by different applications, developer teams, departments within the company, etc. Starting with a single application integration, Azure makes it easy to connect your app to Azure OpenAI. Your intelligent application connects to Azure OpenAI directly using API Key with a TPM limit configured directly on the model deployment level. However, when you start growing your application portfolio, you are presented with multiple apps calling single or even multiple Azure OpenAI endpoints deployed as Pay-as-you-go or Provisioned Throughput Units (PTUs) instances. That comes with certain challenges: How can we track token usage across multiple applications? How can we do cross charges for multiple applications/teams that use Azure OpenAI models? How can we make sure that a single app does not consume the whole TPM quota, leaving other apps with no option to use Azure OpenAI models? How can we make sure that the API key is securely distributed across multiple applications? How can we distribute load across multiple Azure OpenAI endpoints? How can we make sure that PTUs are used first before falling back to Pay-as-you-go instances? To tackle these operational and scalability challenges, Azure API Management has built a set of GenAI Gateway capabilities: Azure OpenAI Token Limit Policy Azure OpenAI Emit Token Metric Policy Load Balancer and Circuit Breaker Import Azure OpenAI as an API Azure OpenAI Semantic Caching Policy (in public preview) Azure OpenAI Token Limit Policy Azure OpenAI Token Limit policy allows you to manage and enforce limits per API consumer based on the usage of Azure OpenAI tokens. With this policy you can set limits, expressed in tokens-per-minute (TPM). This policy provides flexibility to assign token-based limits on any counter key, such as Subscription Key, IP Address or any other arbitrary key defined through policy expression. Azure OpenAI Token Limit policy also enables pre-calculation of prompt tokens on the Azure API Management side, minimizing unnecessary request to the Azure OpenAI backend if the prompt already exceeds the limit. Learn more about this policy here. Azure OpenAI Emit Token Metric Policy Azure OpenAI enables you to configure token usage metrics to be sent to Azure Applications Insights, providing overview of the utilization of Azure OpenAI models across multiple applications or API consumers. This policy captures prompt, completions, and total token usage metrics and sends them to Application Insights namespace of your choice. Moreover, you can configure or select from pre-defined dimensions to split token usage metrics, enabling granular analysis by Subscription ID, IP Address, or any custom dimension of your choice. Learn more about this policy here. Load Balancer and Circuit Breaker Load Balancer and Circuit Breaker features allow you to spread the load across multiple Azure OpenAI endpoints. With support for round-robin, weighted (new), and priority-based (new) load balancing, you can now define your own load distribution strategy according to your specific requirements. Define priorities within the load balancer configuration to ensure optimal utilization of specific Azure OpenAI endpoints, particularly those purchased as PTUs. In the event of any disruption, a circuit breaker mechanism kicks in, seamlessly transitioning to lower-priority instances based on predefined rules. Our updated circuit breaker now features dynamic trip duration, leveraging values from the retry-after header provided by the backend. This ensures precise and timely recovery of the backends, maximizing the utilization of your priority backends to their fullest. Learn more about load balancer and circuit breaker here. Import Azure OpenAI as an API New Import Azure OpenAI as an API in Azure API management provides an easy single click experience to import your existing Azure OpenAI endpoints as APIs. We streamline the onboarding process by automatically importing the OpenAPI schema for Azure OpenAI and setting up authentication to the Azure OpenAI endpoint using managed identity, removing the need for manual configuration. Additionally, within the same user-friendly experience, you can pre-configure Azure OpenAI policies, such as token limit and emit token metric, enabling swift and convenient setup. Learn more about Import Azure OpenAI as an API here. Azure OpenAI Semantic Caching policy Azure OpenAI Semantic Caching policy empowers you to optimize token usage by leveraging semantic caching, which stores completions for prompts with similar meaning. Our semantic caching mechanism leverages Azure Redis Enterprise or any other external cache compatible with RediSearch and onboarded to Azure API Management. By leveraging the Azure OpenAI Embeddings model, this policy identifies semantically similar prompts and stores their respective completions in the cache. This approach ensures completions reuse, resulting in reduced token consumption and improved response performance. Learn more about semantic caching policy here. Get Started with GenAI Gateway Capabilities in Azure API Management We’re excited to introduce these GenAI Gateway capabilities in Azure API Management, designed to empower developers to efficiently manage and scale their applications leveraging Azure OpenAI services. Get started today and bring your intelligent application development to the next level with Azure API Management.Microsoft named a Leader in 2023 Gartner® Magic Quadrant™ for API Management
We're thrilled to announce that Gartner has once again recognized Microsoft as a Leader in the 2023 Magic Quadrant for API Management, marking the fourth consecutive year of this recognition. We believe our continued recognition as a Leader is a testament to our deep customer engagements.Azure API Management Your Auth Gateway For MCP Servers
The Model Context Protocol (MCP) is quickly becoming the standard for integrating Tools 🛠️ with Agents 🤖 and Azure API Management is at the fore-front, ready to support this open-source protocol 🚀. You may have already encountered discussions about MCP, so let's clarify some key concepts: Model Context Protocol (MCP) is a standardized way, (a protocol), for AI models to interact with external tools, (and either read data or perform actions) and to enrich context for ANY language models. AI Agents/Assistants are autonomous LLM-powered applications with the ability to use tools to connect to external services required to accomplish tasks on behalf of users. Tools are components made available to Agents allowing them to interact with external systems, perform computation, and take actions to achieve specific goals. Azure API Management: As a platform-as-a-service, API Management supports the complete API lifecycle, enabling organizations to create, publish, secure, and analyze APIs with built-in governance, security, analytics, and scalability. New Cool Kid in Town - MCP AI Agents are becoming widely adopted due to enhanced Large Language Model (LLM) capabilities. However, even the most advanced models face limitations due to their isolation from external data. Each new data source requires custom implementations to extract, prepare, and make data accessible for any model(s). - A lot of heavy lifting. Anthropic developed an open-source standard - the Model Context Protocol (MCP), to connect your agents to external data sources such as local data sources (databases or computer files) or remote services (systems available over the internet through e.g. APIs). MCP Hosts: LLM applications such as chat apps or AI assistant in your IDEs (like GitHub Copilot in VS Code) that need to access external capabilities MCP Clients: Protocol clients that maintain 1:1 connections with servers, inside the host application MCP Servers: Lightweight programs that each expose specific capabilities and provide context, tools, and prompts to clients MCP Protocol: Transport layer in the middle At its core, MCP follows a client-server architecture where a host application can connect to multiple servers. Whenever your MCP host or client needs a tool, it is going to connect to the MCP server. The MCP server will then connect to for example a database or an API. MCP hosts and servers will connect with each other through the MCP protocol. You can create your own custom MCP Servers that connect to your or organizational data sources. For a quick start, please visit our GitHub repository to learn how to build a remote MCP server using Azure Functions without authentication: https://aka.ms/mcp-remote Remote vs. Local MCP Servers The MCP standard supports two modes of operation: Remote MCP servers: MCP clients connect to MCP servers over the Internet, establishing a connection using HTTP and Server-Sent Events (SSE), and authorizing the MCP client access to resources on the user's account using OAuth. Local MCP servers: MCP clients connect to MCP servers on the same machine, using stdio as a local transport method. Azure API Management as the AI Auth Gateway Now that we have learned that MCP servers can connect to remote services through an API. The question now rises, how can we expose our remote MCP servers in a secure and scalable way? This is where Azure API Management comes in. A way that we can securely and safely expose tools as MCP servers. Azure API Management provides: Security: AI agents often need to access sensitive data. API Management as a remote MCP proxy safeguards organizational data through authentication and authorization. Scalability: As the number of LLM interactions and external tool integrations grows, API Management ensures the system can handle the load. Security remains to be a critical piece of building MCP servers, as agents will need to securely connect to protected endpoints (tools) to perform certain actions or read protected data. When building remote MCP servers, you need a way to allow users to login (Authenticate) and allow them to grant the MCP client access to resources on their account (Authorization). MCP - Current Authorization Challenges State: 4/10/2025 Recent changes in MCP authorization have sparked significant debate within the community. 🔍 𝗞𝗲𝘆 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 with the Authorization Changes: The MCP server is now treated as both a resource server AND an authorization server. This dual role has fundamental implications for MCP server developers and runtime operations. 💡 𝗢𝘂𝗿 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻: To address these challenges, we recommend using 𝗔𝘇𝘂𝗿𝗲 𝗔𝗣𝗜 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 as your authorization gateway for remote MCP servers. 🔗For an enterprise-ready solution, please check out our azd up sample repo to learn how to build a remote MCP server using Azure API Management as your authentication gateway: https://aka.ms/mcp-remote-apim-auth The Authorization Flow The workflow involves three core components: the MCP client, the APIM Gateway, and the MCP server, with Microsoft Entra managing authentication (AuthN) and authorization (AuthZ). Using the OAuth protocol, the client starts by calling the APIM Gateway, which redirects the user to Entra for login and consent. Once authenticated, Entra provides an access token to the Gateway, which then exchanges a code with the client to generate an MCP server token. This token allows the client to communicate securely with the server via the Gateway, ensuring user validation and scope verification. Finally, the MCP server establishes a session key for ongoing communication through a dedicated message endpoint. Diagram source: https://aka.ms/mcp-remote-apim-auth-diagram Conclusion Azure API Management (APIM) is an essential tool for enterprise customers looking to integrate AI models with external tools using the Model Context Protocol (MCP). In this blog, we've emphasized the simplicity of connecting AI agents to various data sources through MCP, streamlining previously complex implementations. Given the critical role of secure access to platforms and services for AI agents, APIM offers robust solutions for managing OAuth tokens and ensuring secure access to protected endpoints, making it an invaluable asset for enterprises, despite the challenges of authentication. API Management: An Enterprise Solution for Securing MCP Servers Azure API Management is an essential tool for enterprise customers looking to integrate AI models with external tools using the Model Context Protocol (MCP). It is designed to help you to securely expose your remote MCP servers. MCP servers are still very new, and as the technology evolves, API Management provides an enterprise-ready solution that will evolve with the latest technology. Stay tuned for further feature announcements soon! Acknowledgments This post and work was made possible thanks to the hard work and dedication of our incredible team. Special thanks to Pranami Jhawar, Julia Kasper, Julia Muiruri, Annaji Sharma Ganti Jack Pa, Chaoyi Yuan and Alex Vieira for their invaluable contributions. Additional Resources MCP Client Server integration with APIM as AI gateway Blog Post: https://aka.ms/remote-mcp-apim-auth-blog Sequence Diagram: https://aka.ms/mcp-remote-apim-auth-diagram APIM lab: https://aka.ms/ai-gateway-lab-mcp-client-auth Python: https://aka.ms/mcp-remote-apim-auth .NET: https://aka.ms/mcp-remote-apim-auth-dotnet On-Behalf-Of Authorization: https://aka.ms/mcp-obo-sample 3rd Party APIs – Backend Auth via Credential Manager: Blog Post: https://aka.ms/remote-mcp-apim-lab-blog APIM lab: https://aka.ms/ai-gateway-lab-mcp YouTube Video: https://aka.ms/ai-gateway-lab-demoAnnouncing the availability of TLS 1.3 in Azure API Management in Preview
TLS 1.3 is the latest version of the internet’s most deployed security protocol, which encrypts data to provide a secure communication channel between two endpoints. TLS 1.3 support in Azure API Management is planned to rollout during the first week of February 2024. The rollout will happen in stages, this means some regions will get it first as we roll out globally.Announcing Public Preview of Azure API Management Basic v2 and Standard v2 Tiers
We're thrilled to announce the public preview launch of our latest Azure API Management pricing tiers: Basic v2 and Standard v2. These new tiers address highly sought-after customer requests, bring quality-of-service enhancements, and offer a flexible starting point for API Management, allowing organizations of any size to embark on their API journey.Choosing the right Azure API Management tier for your networking scenarios
There are different options when it comes to integrating your API Management with your Azure Virtual Network (VNet) which are important to understand. These options will depend on your network perimeter access requirements and the available tiers and features in Azure API Management. This blog post aims to guide you through the different options available on both the classic tiers and v2 tiers of Azure API Management, to help you decide which choice works best for your requirements. We need to define how are we going to call the tiers : developer, basic, standard , premium. For example v1 tiers, classical tiers, etc…Introducing gRPC API Support in Azure API Management Self-Hosted Gateway
We’re excited to announce the public preview of gRPC support in Azure API Management in the self-hosted gateway. This new feature allows customers to manage their gRPC services as APIs in Azure API Management. What is gRPC? gRPC is a modern, high-performance framework that enables seamless communication between services. Leveraging HTTP/2 for transport and Protocol Buffers (protobuf) as the interface description language, gRPC facilitates lightweight, efficient communication perfect for microservices architecture. What the Preview Includes Full gRPC support. Perform unary, client streaming, server streaming, and bidirectional streaming calls. First-Class Schema Support. Import and manage gRPC services using their protobuf definitions and have Azure API Management handle the rest. Security and Compliance. Implement standard Azure API Management policies to protect your gRPC services. Unified Management. Manage gRPC APIs alongside other API in a single Azure API Management service instance. Deployment Flexibility. Securely and efficiently manage APIs on-premises, Azure, and other clouds from an API Management service instance by deploying self-hosted gateway near your backend services. Getting Started Ensure you have an active Azure subscription. If not, sign up for a free account today. Navigate to the Azure portal and create a new API Management service instance or use an existing one. Deploy a self-hosted gateway to the environment of your choice. Import your gRPC service’s protobuf definition into Azure API Management. Configure policies, monitor performance, and secure your gRPC services just like you would with any other API. For more information on using gRPC with Azure API Management, check out our documentation. We also encourage you to share your feedback using the comments below.
Expose REST APIs as MCP servers with Azure API Management and API Center (now in preview)
As AI-powered agents and large language models (LLMs) become central to modern application experiences, developers and enterprises need seamless, secure ways to connect these models to real-world data and capabilities. Today, we’re excited to introduce two powerful preview capabilities in the Azure API Management Platform: Expose REST APIs in Azure API Management as remote Model Context Protocol (MCP) servers Discover and manage MCP servers using API Center as a centralized enterprise registry Together, these updates help customers securely operationalize APIs for AI workloads and improve how APIs are managed and shared across organizations. Unlocking the value of AI through secure API integration While LLMs are incredibly capable, they are stateless and isolated unless connected to external tools and systems. Model Context Protocol (MCP) is an open standard designed to bridge this gap by allowing agents to invoke tools—such as APIs—via a standardized, JSON-RPC-based interface. With this release, Azure empowers you to operationalize your APIs for AI integration—securely, observably, and at scale. 1. Expose REST APIs as MCP servers with Azure API Management An MCP server exposes selected API operations to AI clients over JSON-RPC via HTTP or Server-Sent Events (SSE). These operations, referred to as “tools,” can be invoked by AI agents through natural language prompts. With this new capability, you can expose your existing REST APIs in Azure API Management as MCP servers—without rebuilding or rehosting them. Addressing common challenges Before this capability, customers faced several challenges when implementing MCP support: Duplicating development efforts: Building MCP servers from scratch often led to unnecessary work when existing REST APIs already provided much of the needed functionality. Security concerns: Server trust: Malicious servers could impersonate trusted ones. Credential management: Self-hosted MCP implementations often had to manage sensitive credentials like OAuth tokens. Registry and discovery: Without a centralized registry, discovering and managing MCP tools was manual and fragmented, making it hard to scale securely across teams. API Management now addresses these concerns by serving as a managed, policy-enforced hosting surface for MCP tools—offering centralized control, observability, and security. Benefits of using Azure API Management with MCP By exposing MCP servers through Azure API Management, customers gain: Centralized governance for API access, authentication, and usage policies Secure connectivity using OAuth 2.0 and subscription keys Granular control over which API operations are exposed to AI agents as tools Built-in observability through APIM’s monitoring and diagnostics features How it works MCP servers: In your API Management instance navigate to MCP servers Choose an API: + Create a new MCP Server and select the REST API you wish to expose. Configure the MCP Server: Select the API operations you want to expose as tools. These can be all or a subset of your API’s methods. Test and Integrate: Use tools like MCP Inspector or Visual Studio Code (in agent mode) to connect, test, and invoke the tools from your AI host. Getting started and availability This feature is now in public preview and being gradually rolled out to early access customers. To use the MCP server capability in Azure API Management: Prerequisites Your APIM instance must be on a SKUv1 tier: Premium, Standard, or Basic Your service must be enrolled in the AI Gateway early update group (activation may take up to 2 hours) Use the Azure Portal with feature flag: ➤ Append ?Microsoft_Azure_ApiManagement=mcp to your portal URL to access the MCP server configuration experience Note: Support for SKUv2 and broader availability will follow in upcoming updates. Full setup instructions and test guidance can be found via aka.ms/apimdocs/exportmcp. 2. Centralized MCP registry and discovery with Azure API Center As enterprises adopt MCP servers at scale, the need for a centralized, governed registry becomes critical. Azure API Center now provides this capability—serving as a single, enterprise-grade system of record for managing MCP endpoints. With API Center, teams can: Maintain a comprehensive inventory of MCP servers. Track version history, ownership, and metadata. Enforce governance policies across environments. Simplify compliance and reduce operational overhead. API Center also addresses enterprise-grade security by allowing administrators to define who can discover, access, and consume specific MCP servers—ensuring only authorized users can interact with sensitive tools. To support developer adoption, API Center includes: Semantic search and a modern discovery UI. Easy filtering based on capabilities, metadata, and usage context. Tight integration with Copilot Studio and GitHub Copilot, enabling developers to use MCP tools directly within their coding workflows. These capabilities reduce duplication, streamline workflows, and help teams securely scale MCP usage across the organization. Getting started This feature is now in preview and accessible to customers: https://aka.ms/apicenter/docs/mcp AI Gateway Lab | MCP Registry 3. What’s next These new previews are just the beginning. We're already working on: Azure API Management (APIM) Passthrough MCP server support We’re enabling APIM to act as a transparent proxy between your APIs and AI agents—no custom server logic needed. This will simplify onboarding and reduce operational overhead. Azure API Center (APIC) Deeper integration with Copilot Studio and VS Code Today, developers must perform manual steps to surface API Center data in Copilot workflows. We’re working to make this experience more visual and seamless, allowing developers to discover and consume MCP servers directly from familiar tools like VS Code and Copilot Studio. For questions or feedback, reach out to your Microsoft account team or visit: Azure API Management documentation Azure API Center documentation — The Azure API Management & API Center Teams
