Managing a hybrid data center with 10–200 on-premises Windows Server 2019/2022 machines can be challenging for a small IT team. Patching servers, tracking configuration changes, and monitoring security often require multiple tools or manual effort. Microsoft Azure Arc is a hybrid cloud solution that extends Azure management services to on-premises and multi-cloud servers. In practical terms, Azure Arc lets you project your on-premises Windows Servers into Azure, so you can use Azure services – like centralized update management, monitoring, and security – as if those machines were Azure resources. This blog post explores how Azure Arc can simplify hybrid server management in a small business environment, focusing on:

  • Azure Update Management for patching Arc-connected servers.
  • Azure Arc extensions (especially the Azure Monitor Agent) that enable Change Tracking, Inventory, and integration with Microsoft Defender for Endpoint.
  • Benefits for critical systems like domain controllers and infrastructure servers.
  • A real-world use case demonstrating Change Tracking and Inventory in action.
  • Preparing for SIEM integration (with a teaser for Microsoft Sentinel).
  • How to get started: setting up a Log Analytics workspace and onboarding servers via a service principal (step-by-step).

Throughout, we’ll explore technical details suitable for IT professionals and guide on implementing Azure Arc in a small data center. Let’s start with one of the most immediate wins: keeping your servers up to date.

Azure Update Management with Azure Arc

One key benefit of Azure Arc is Azure Update Manager, a cloud-based patch management solution that works across Azure VMs and Arc-enabled on-prem servers. Azure Update Manager allows you to assess update compliance and deploy Windows (and Linux) updates to your machines from a single Azure console. In an Azure Arc context, you can centrally manage patches for all your on-prem Windows Server 2019/2022 systems without setting up traditional tools like WSUS or SCCM.

How Azure Update Manager Works: Once your servers are connected to Azure Arc, Azure’s update management service can scan them for missing patches and report on overall compliance. From the Azure portal, you can create update deployments (one-time or recurring) to install updates on selected servers. Features include scheduling maintenance windows, grouping servers (even dynamically by criteria), and opting for automatic patching during off-hours. You also get detailed reporting and auditing of patch status – for example, you can see which updates succeeded or failed on each machine.

Why This Matters for Small Businesses: If you maintain, say, 50 Windows servers, ensuring they all get critical updates is time-consuming. Azure Update Manager provides a “single pane of glass” to monitor patch compliance for your entire fleet. Instead of manually logging into each server or relying on group policies alone, you can use Azure Arc to push patches enterprise-wide. This reduces the risk of missed updates (which could leave vulnerabilities unpatched) and saves admin time. You can define maintenance schedules that fit your business – for example, schedule web servers to patch on Sunday at 2 AM and domain controllers on a different day – all from the Azure portal. The Azure Arc agent on each server communicates with Azure to download and apply approved updates (using the Windows Update agent under the hood), so no inbound connectivity is needed; your servers need outbound internet access.

Another advantage is the cost and licensing for Update Manager. If your Windows Servers are licensed with Software Assurance or are enrolled in Azure’s pay-as-you-go plan, Azure Update Manager is included at no extra charge (you only pay any network or log storage costs)​. This means small businesses can leverage cloud-based patch management without additional licensing fees in those cases. (If not, standalone Azure Update Manager can be purchased for Arc servers​.) In short, Azure Arc + Update Manager gives you cloud-speed patching with minimal overhead – a big win for lean IT teams.

Azure Arc Extensions: Azure Monitor Agent for Change Tracking, Inventory, and Security

Beyond updates, Azure Arc enables powerful monitoring and configuration management through Arc extensions. Extensions are add-on components you can deploy to Arc-connected servers (similar to Azure VM extensions) to deliver specific functionality. The most important extension for server monitoring is the Azure Monitor Agent (AMA). Once installed on your Windows Server, the AMA extension allows Azure to collect telemetry (logs, performance, and more) and unlock features like Change Tracking, Inventory, and security integration.

Azure Monitor Agent (AMA): Microsoft’s modern unified monitoring agent for VMs and servers replaces the old Log Analytics agent. When you enable AMA on an Arc-enabled server, it connects that machine to an Azure Log Analytics workspace for data ingestion. AMA is flexible and secure, supporting multiple data streams and target workspaces via Data Collection Rules. For our purposes, AMA is the vehicle that powers change tracking and inventory and sends data to services like Defender or Sentinel.

Change Tracking and Inventory via Azure Arc

Once AMA runs on your Arc-connected Windows Server, you can turn on Change Tracking and Inventory, an Azure service that continuously audits your server’s configuration. In the Azure Portal, enabling Change Tracking/Inventory will deploy the necessary agents or configurations to start collecting data (in the past, this used a Log Analytics solution; with AMA, it uses data collection rules to capture the information).

  • Change Tracking records modifications to the server’s software and configuration. It monitors file changes, registry changes, service status changes, and software installation/uninstallation. Every change is logged with details on what changed and when, and this data is sent to the Log Analytics workspace (into the ConfigurationChange table) for analysis. This helps you detect configuration drift or unauthorized changes quickly. For example, if someone disabled a Windows service or modified a critical registry setting, you’d see an entry showing the before/after values and timestamps.
  • Inventory provides an up-to-date catalog of software and system information on the server. It collects the list of installed applications (with versions), Windows updates, running services, OS configuration details, and more. This data is stored in the ConfigurationData table in the Log Analytics workspace. Inventory helps track what software is present on which servers – great for license compliance, audit preparation, or simply knowing if that one legacy app is still installed somewhere.

Change Tracking and Inventory give you visibility into your servers’ state over time. Azure Arc makes enabling these on your on-prem machines easy: you typically need to link the machine to a Log Analytics workspace (we’ll cover this setup later) and enable the Change Tracking solution or appropriate policy. Under the covers, Azure Arc ensures the necessary agents/extensions (like a change-tracking extension that feeds data to AMA) are in place. The supported operating systems for these features include Windows Server 2012 and above​– which covers our 2019/2022 servers – so compatibility in a small business environment is assured.

Change Tracking and Inventory are included as a benefit for Windows Server Arc-connected machines with Software Assurance or Arc-enabled pay-as-you-go licensing. However, they require a Log Analytics workspace, which may incur minimal data ingestion costs​ (depending on how much change data your servers generate). For most small deployments, the volume of change logs is modest (you can set data retention and quotas as needed), but it’s something to be aware of when planning.

Integration with Microsoft Defender for Endpoint

Security is a paramount concern, and Azure Arc can help improve your security posture for on-prem servers by integrating with Microsoft Defender for Endpoint (MDE). Defender for Endpoint is Microsoft’s endpoint detection and response (EDR) solution that detects malware, suspicious activity, and advanced threats on endpoints. Onboarding a standalone server to Defender for Endpoint might require running a script or using Group Policy. With Azure Arc, this process can be streamlined and centrally managed.

How does it work? Azure Arc doesn’t contain Defender for Endpoint, but it works with Microsoft Defender for Cloud (formerly Azure Security Center) to onboard and monitor Arc-enabled servers. Suppose you enable the Defender for Servers plan in the Defender for Cloud for your subscription. In that case, Azure can automatically deploy the Defender for Endpoint agent to Arc-connected machines and integrate their alerts into Azure’s security console. In other words, by using Azure Arc, you can onboard on-premises servers directly to Defender for Endpoint from the Azure portal without individual manual installs. This unified onboarding ensures that MDE protects all those 10–200 servers and reports on the same dashboard as your other devices.

Once integrated, your Arc-enabled servers with active sensor data will appear in the Microsoft 365 Defender portal. Any threat detections (like ransomware behavior or a malicious process) on those servers generate alerts you can see in Defender for Cloud and the Defender portal – and even correlate with change tracking or inventory data. For example, if Defender for Endpoint alerts that malware was detected on a server, you could pivot to see recent changes on that machine (via Change Tracking logs) to investigate what changed around the time of infection.

This is huge from a small business perspective: It brings enterprise-grade security monitoring to your on-prem servers with minimal effort. Instead of managing another separate security agent deployment, you leverage Azure Arc to handle it. It’s worth noting that Defender for Endpoint is a paid service (usually licensed per node or via Defender for Servers plans), but the value in early threat detection and response is often worth it. We’ll discuss security monitoring in the SIEM section and the next blog post.

Deploying Azure Arc on Domain Controllers and Critical Servers

With the capabilities of Azure Arc in mind, let’s discuss why you’d want to deploy it on domain controllers and other infrastructure servers – often the most critical machines in a small business network. It’s natural to be cautious about adding agents or making changes on domain controllers (DCs), but Azure Arc’s benefits on these servers are significant:

  • Consistent Patching of DCs: Domain controllers must be kept up-to-date, but many admins delay DC patching due to fear of disruptions. Azure Arc Update Management helps plan and automate DC patching in a controlled way. For example, if you have two domain controllers, you can schedule one to update simultaneously (maintaining one online), all via Azure. You get compliance reports showing that your DCs are fully patched with the latest security updates – critical for security audits or cyber insurance compliance.
  • Tracking Configuration Changes on DCs: Changes on a domain controller – whether to registry, system files, or software – can have a far-reaching impact (or indicate a security breach if unauthorized). By enabling Change Tracking on your DCs, you gain a near real-time journal of changes. Suppose an administrator (or attacker) alters a registry key related to LDAP or installs a new piece of software on a DC; the Arc Change Tracking log will capture that event. This is invaluable for troubleshooting (“what changed on the DC to cause this issue?”) and security forensics. Small businesses typically lack a dedicated change management database, so this automated change log fills that gap.
  • Inventory and Asset Management: For infrastructure servers like file servers, application servers, database servers, etc., Arc Inventory gives you a centralized inventory of software and roles across all machines. You can quickly answer questions like “Which servers have SQL Server 2019 installed?” or “Is Java runtime present (and which version) on our servers?” without having to log into each one. For domain controllers, inventory can list what software (if any) is installed on the DC beyond the OS (ideally minimal) so you can detect any non-standard applications on your DCs.
  • Remote Management via Azure: Azure Arc also lights up the Windows Admin Center (WAC) in Azure for your servers. You can manage your Arc-enabled Windows Servers directly from the Azure portal using WAC’s tools (like certificate management, Event Viewer, registry editor, etc.). Consider a scenario where you need to check something on a domain controller quickly, but you’re offsite – with Arc and WAC, you could connect through Azure without a VPN or RDP into the DC. This capability is secure (it uses Azure AD for authentication and runs through an Azure relay, with no inbound ports on the DC). It is a significant productivity boost for a small IT team. Your domain controllers and servers become manageable from anywhere, as if they were Azure VMs.
  • Uniform Policy and Governance: By having your critical servers in Azure Arc, you can apply Azure Policies to them for governance. For instance, you could apply a policy that monitors the specific security configuration enabled on all Arc-connected servers (including DCs). This ensures your on-prem servers adhere to the same standards as your cloud resources.

From a risk perspective, the Arc agent is lightweight and communicates outbound over HTTPS, so it doesn’t expose new attack surfaces on a domain controller. Microsoft officially supports Azure Arc on Windows Server domain controllers (Windows Server 2012 and above)​. Many small businesses have various server types (DCs, file/print servers, line-of-business app servers); Azure Arc can be deployed to centralize management. The practical benefit is spending less time firefighting on individual machines and more time leveraging Azure’s centralized tools to keep the environment stable and secure.

Use Case: Detecting Unauthorized Changes with Change Tracking and Inventory

To make the benefits more concrete, let’s walk through a realistic scenario in a small business environment where Azure Arc’s Change Tracking and Inventory capabilities prove their worth:

Scenario: “Mystery Software on the Domain Controller” – You come into work and notice the domain controller has a new application running on the taskbar. No one on the IT team recalls installing anything on the DC. This could be innocent (perhaps a technician installed a tool and forgot to document it) or a red flag (malicious software or ad-hoc changes that violate policy). How can Azure Arc help?

  1. Inventory Check: You open the Azure portal, navigate to your Arc-enabled domain controller resource, and view the Inventory. Sure enough, you see an entry for a software that wasn’t there last week – let’s say “Remote Management Utility X” installed on Friday at 7 PM. This immediately gives you a clue as to what changed. Azure Inventory provides not just the presence of the software but also the install date and version. You confirm that this software is not authorized.
  2. Change Tracking Timeline: Next, you switch to Change Tracking for that server to see the timeline of changes around that date. You filter for software changes and see that Remote Management Utility X was installed on Friday at 7:05 PM, and at 7:10 PM, a Windows service related to that software was started. A registry key change is also logged simultaneously (likely the software adding itself to run at startup). Azure Arc’s change log has captured all these events. This answers the when and gives context – maybe it correlates with a particular user’s activity.
  3. Investigation and Response: You can now investigate who made this change with this information. Perhaps you can check Windows Event Logs (accessible via Azure if you’ve set AMA to collect event logs) or ask the team. If it turns out to be unauthorized, you can uninstall the software. You might also tighten controls, for example, using Azure Arc’s integration with Azure Policy to alert if new software is installed on a DC outside of approved maintenance windows.
  4. Preventing Future Incidents: After resolving the issue, you create an alert in Azure Monitor so that any future software installations on critical servers send an email notification. This can be done by querying the Log Analytics data (the ConfigurationChange table) for installation events and creating an alert rule.

This use case highlights how having that automated change audit trail can drastically reduce time to identify and remediate issues. Without Azure Arc, one might not notice the unauthorized software until it causes a problem, or you’d have to manually dig through the server’s event logs (if you even know when it was installed). With Arc, it’s surfaced in a purpose-built log that’s easy to query. The same goes for other scenarios: tracking when a config file was modified on a web server suddenly broke, or confirming that a critical Windows service was stopped and by whom.

Another scenario is patch auditing: after Patch Tuesday and your scheduled updates, you can use Azure Arc’s update compliance report to verify that every server installed the patches. If one server shows missing updates (perhaps it is offline or had an error), you catch it immediately. You can rerun the deployment, avoiding the situation of an unpatched server lurking unknown. These insights are extremely valuable for maintaining operational control and security, even in small businesses.

Looking Ahead: Why SIEM Integration with Sentinel Matters

By now, we’ve established that Azure Arc can centralize management and monitoring for your hybrid servers. The next logical step is integrating all this rich operational data with an SIEM (Security Information and Event Management) solution. Enter Microsoft Sentinel – Azure’s cloud-native SIEM. Why is Sentinel integration vital in this setup?

In a word: holistic visibility. Azure Arc brings your servers’ telemetry to the cloud (Log Analytics), and Microsoft Defender for Endpoint brings security alerts. Microsoft Sentinel can ingest data from both and correlate it with myriad other sources – Azure AD sign-in logs, Office 365 audit logs, firewall logs, etc. This gives you a unified view for threat detection and troubleshooting across your entire environment (cloud and on-prem).

For example, Sentinel could correlate an Arc Change Tracking event (say, a new local user added to a server) with an Azure AD log (maybe a suspicious login) and a Defender for Endpoint alert (malware found) to flag a potential breach with much higher confidence. It can then trigger automated responses or alert the on-call staff. In a small business that might not have a dedicated Security Operations Center, having Sentinel watch over your Arc-connected infrastructure is like hiring an around-the-clock security analyst (in the form of analytics rules and AI).

Even from an IT operations standpoint, Sentinel can be functional: you can create custom queries to watch for anomalies in your servers (like an unusual number of changes in a short period) and have Sentinel alert you. Sentinel has built-in workbooks and hunting queries for Windows Server logs, which you can leverage once your servers send their data to the Log Analytics workspace.

Our next blog post will explore how to connect Azure Arc-enabled servers to Microsoft Sentinel and build a robust monitoring strategy. We will cover setting up data connectors, writing custom detection rules, and using Sentinel’s SOAR (automation) capabilities to respond to incidents in a hybrid environment. This integration will elevate the environment we set up today into a truly intelligent, secure, and self-monitoring system.

Teaser: If you found the change-tracking scenario above interesting, imagine getting an alert in Sentinel as soon as that unauthorized software was installed on the domain controller, correlating it with an abnormal user login at an odd hour – that’s the power we’ll unlock with Sentinel. Stay tuned for the follow-up post on Sentinel and SIEM for Azure Arc-managed hybrid servers.

Preparing Your Environment: Log Analytics Workspace Requirements

Before fully leveraging Azure Arc’s monitoring and SIEM capabilities, you must set up an Azure Log Analytics Workspace. This workspace is essentially a cloud database for logs and metrics – it’s where Azure Arc will store the data for Update Management, Change Tracking, and Inventory and where Sentinel will pull data from. Here are the requirements and steps to prepare a Log Analytics workspace for Azure Arc:

  • Azure Subscription: To create resources, you’ll need an Azure subscription with permissions (Owner/Contributor). If you’re new to Azure, setting up a free trial or using your organization’s Azure tenant is the first step.
  • Resource Group and Region: Decide on an Azure Resource Group and region for the Log Analytics workspace. It’s often a good practice to create a dedicated resource group for “Hybrid Management” or something similar to contain your Arc servers and related resources. Choose a region close to your on-prem location (for example, if you are in Canada, you might choose Canada Central) to reduce latency. However, log data is not usually critical. Ensure the region supports Azure Arc (most do)​.
  • Creating the Workspace: In the Azure Portal, search for “Log Analytics workspaces”. Add a new workspace, give it a name (e.g., “Hybrid-LogAnalytics”), select the resource group and region, and choose a pricing tier (the default “Pay-as-you-go (Per GB)” is fine for most, and you can set data retention as needed). Creating the workspace is straightforward and only takes a few seconds.
  • Workspace Configuration: No special configuration is needed for basic use. By default, the workspace will start collecting data once agents are connected. However, if you plan to install any agents manually, you should note the Workspace ID and Key (found in the workspace’s Advanced Settings). In Arc’s case, if you use the Azure Monitor Agent extension, you typically won’t need to input the key – Azure handles the linkage – but the ID is used in backend association. It’s good to have it handy.
  • Linking Change Tracking and Update Management: In earlier implementations (using Azure Automation), you had to link an Automation Account to the workspace for update management and change tracking. With Azure Update Manager (the new version) and AMA-based change tracking, that linking is no longer required. Simply having the workspace and using Arc to enable those features will suffice. Azure Arc’s Windows Server Management capabilities (Update Manager, Change Tracking, etc.) will utilize this workspace when you turn them on. The important part is that your Arc-connected servers know to send data to this workspace (we will ensure that by deploying the AMA extension pointing to it or via Arc policies).
  • Networking Considerations: Ensure your servers can reach the Log Analytics ingestion endpoints. This typically means allowing outbound HTTPS (port 443) to Azure *.blob.core.windows.net (for agent download) and *.ods.opinsights.azure.com (for data ingestion), among other Azure URLs. If your servers go through a proxy or firewall, you may need to configure URL allowlists. Microsoft documents the required endpoints, ensuring general Azure service endpoints are reachable. For small businesses without restrictive egress firewalls, internet access is usually enough.

The Log Analytics workspace is central to Azure Arc’s monitoring features. Think of it as the storage for all the telemetry from your on-prem servers. You might only need one workspace for all 10–200 servers (you can segregate by environment or region if needed, but one is fine to start). Once this workspace is ready, you can onboard servers and deploy the monitoring extensions.

Onboarding Servers to Azure Arc with a Service Principal: Step-by-Step

With the groundwork laid, it’s time to connect your on-premises Windows Servers (2019/2022) to Azure Arc. Onboarding at scale (dozens of machines) is best done using a script and an Azure AD application (service principal) for authentication rather than interactively one by one. Here’s a step-by-step guide:

1. Ensure Prerequisites are Met:

Before onboarding, verify a few prerequisites on the Azure and server sides.

  • On each target server, you must have local administrator privileges (to install the Arc agent). The server’s OS should be Windows Server 2012 or higher (true for 2019/2022). Also, as mentioned, the server needs outbound internet access on port 443.
  • In Azure, you need the Azure Arc resource providers registered in your subscription: Microsoft.HybridCompute, Microsoft.GuestConfiguration, and Microsoft.HybridConnectivity. These enable Arc to create the server resource and manage extensions. Usually, the first time you add an Arc server via the portal, it prompts to register these. You can check in the Azure Portal (Subscriptions > Resource Providers) or use Azure PowerShell/CLI to register them if not already.
  • You also need appropriate Azure role permissions to onboard. The built-in role, AzureConnected Machine Onboarding, is designed for Arc server onboarding. Your Azure account or the service principal you use should be assigned this role (or Contributor) on the resource group where the Arc servers will reside.

2. Create a Service Principal for Arc Onboarding:

Instead of logging in interactively on each server, we create an Azure AD application identity (service principal) with permission to connect machines to Arc. Using a service principal is more secure and scriptable. You can create this via Azure Portal or PowerShell:

  • Portal method: In Azure Portal, go to Azure Arc > Service principals (under the Arc settings) and click Add. Give it a name like “ArcOnboarding-SP”. Scope it to a specific resource group (recommended for least privilege) or the whole subscription if you use one RG for Arc servers. Choose the scope and assign the Azure Connected Machine Onboarding role. When you click Create, it will generate a Client ID, Client Secret, and Tenant ID – be sure to copy these values (especially the secret, as it’s shown only once).
  • PowerShell method: Run New-AzADServicePrincipal -DisplayName “ArcOnboardingSP” -Role “Azure Connected Machine Onboarding”. This will create the app and assign the role in one go. The output will include an AppId and a Secret (password). Save these and your Azure Tenant ID (which you can get with Get-AzContext or from the Azure AD overview page).

However you create it, you should now have the following credentials for your service principal: Application (Client) ID, Client Secret (Password), and Tenant ID. You also need to know the target subscription ID and resource group name for the Arc resources.

3. Generate the Arc Installation Script:

The Azure Portal can generate a script that automates installation and onboarding using the service principal. This is handy to ensure all parameters are correct. Go to Azure Arc > Servers in the Azure Portal and click Add -> Add multiple servers -> Generate script. In the wizard:

  • Choose the subscription and resource group for the servers.
  • Choose the region where the metadata will be stored (this should match where you want the Arc resource; it can be the same region as your Log Analytics workspace for simplicity).
  • Select the operating system of your servers (Windows).
  • Connectivity method: likely Public endpoint (since your servers will connect to Azure). Configure your environment using a proxy or Azure Arc Private Link accordingly.
  • Under Authentication, please select the service principal you created (it should appear in the drop-down by the name you gave, e.g., ArcOnboarding-SP). This will securely embed the client ID/secret into the script.
  • (Optionally, add any tags you want these server resources to have – e.g., environment or location tags – in the Tags step)​.
  • Click Download to get the script (OnboardingScript.ps1 for Windows).

This PowerShell script contains all the steps to install the Connected Machine agent (the Arc agent) and then register the machine to Azure Arc using the service principal credentials. It will look at the end like running azcmagent connect with parameters –service-principal-id, –service-principal-secret, –tenant-id, –subscription-id, –resource-group, and –location filled in for your environment. If you want to set a specific Azure resource name, there’s also an optional resource name; it uses the machine’s hostname by default.

4. Run the Onboarding Script on Each Server:

Now, take that script and execute it on each target server. You can do this manually (RDP to each machine and run the .ps1 script as Administrator in PowerShell) or use a remote execution method (like psexec, Group Policy startup scripts, or your configuration management tool) to run it. The script will download the Azure Arc agent MSI, install it as Microsoft Azure Connected Machine Agent, and then initiate the connection to Azure using the service principal. This process usually takes a minute or two per server. If successful, you’ll get a message that the machine connected to Azure Arc successfully.

5. Verify in Azure Portal:

After running the script, go back to the Azure Portal’s Azure Arc section and refresh the list of Servers. You should see each onboarded server listed by its name (and the resource group you specified). Initially, the status might show as “Connected,” or it might take a minute to display the properties fully. Click on a server to see details like OS version and Arc-enabled. This confirms that the connection is established.

At this point, your servers are officially Azure Arc-enabled! They are resources in Azure and can be managed accordingly. But to use the features we discussed (Update management, monitoring, etc.), there are a couple more things to do post-onboarding:

6. Enable Extensions and Services:

Now that the servers are in Azure Arc, you should install the Azure Monitor Agent (AMA) extension on them and associate it with your Log Analytics workspace. This can be done from each Arc server’s page (Under Extensions, choose Add extension > Azure Monitor Agent). Alternatively, if you have many servers, you can use Azure Policy to deploy AMA to all Arc-enabled machines automatically. When installing AMA, you’ll need to specify the target Log Analytics workspace (the one we set up earlier) so the agent knows where to send data. Once AMA is installed, you can enable Change Tracking and Inventory. In the Azure Portal, navigate to Azure Arc -> Servers -> (select your server) -> Insights or Inventory, and follow the prompts to turn them on. Behind the scenes, this will configure the data collection rules for AMA or deploy any dependent extension to start collecting that data.

Similarly, if you want to use Azure Update Manager, you may need to enable that feature for the server or cluster of servers. In the Azure Portal, go to Update Management Center (UMC) and onboard the Arc machines. The Jumpstart documentation​ jumpstart.azure.com suggests that if you were using the older Update Management (Azure Automation), you’d link to an Automation Account; but with the new Update Manager, onboarding Arc servers is mostly a matter of having them Arc-connected (agent installed) and then they appear in the UMC dashboard to manage. Ensure any required Azure Policies for Update Manager are in place (the Arc Jumpstart has a policy “Configure periodic checking for updates on Arc machines” you can deploy, ensuring the Arc agent can report update compliance).

7. (Optional) Onboard to Defender for Endpoint:

If you have Microsoft Defender for Cloud enabled with the Defender for Servers plan, go ahead and enable the integration or auto-provisioning for Arc machines. In Defender for Cloud settings, an option automatically deploys the MDE agent on new Arc-enabled machines. Turning that on will ensure that the Microsoft Defender for Endpoint sensor is installed within a few hours of an Arc server connecting and that the machine appears in the Defender console. If you don’t have those licenses, you can still manually onboard the servers to MDE using a local script, but doing it via Arc/Defender for Cloud is much more streamlined.

By following the above steps, you’ve onboarded your servers into Azure Arc in a repeatable, scalable way. All your essential servers (including those domain controllers and file servers) are now represented in Azure. You can manage updates, view change logs, query inventory, and more from the Azure portal or via Azure CLI/PowerShell. As a final check, you might run a test: try stopping a service or installing a test application on a server, and then confirm you can see that change in the Azure Change Tracking logs after a short while – a satisfying validation that everything is working.

Conclusion

In this post, we explored how Azure Arc can transform the management of a small business’s hybrid data center. We started with cloud-based patch management via Azure Update Manager, ensuring that Windows Servers from 2019 onward get timely updates with minimal effort. We then dove into the Azure Monitor Agent extension, which unlocks Change Tracking and Inventory – giving you visibility into every change and installed application on your Arc-enabled servers​– and we discussed how this data, combined with Azure Arc’s integration with Defender for Endpoint, strengthens your security posture. We saw why even critical machines like domain controllers benefit from Arc enablement, and we walked through a real scenario where Arc’s insights helped catch an unauthorized change. Finally, we went through the practical steps to set up a Log Analytics workspace and onboard servers at scale using a service principal so you can implement these solutions in your environment.

Azure Arc brings cloud capabilities to on-premises servers in an especially empowering way for lean IT teams in small and mid-sized organizations. It bridges the gap between your on-prem world and Azure, so you can uniformly manage configurations, updates, and security across your entire estate with the tooling and automation that the cloud provides. The result is better uptime, improved security, and less time spent on tedious manual tasks.

Next Steps: In the next blog post, we’ll build on this foundation by integrating our Arc-managed servers with Microsoft Sentinel for intelligent security analytics. We gave a teaser of why a SIEM is important – correlating signals and providing advanced threat detection. In that post, expect a deep dive into connecting log data to Sentinel, writing custom detection rules (for example, alerting on specific changes captured by Azure Arc), and automating responses. If Azure Arc is the eyes and hands managing your servers, Sentinel will be the brain analyzing and responding to what those eyes see.

Stay tuned for “Azure Arc Part 2: SIEM Integration with Microsoft Sentinel”. By leveraging Azure Arc with Sentinel, you’ll achieve a proper end-to-end hybrid management and security solution that punches well above its weight – perfect for the small business data center that needs to stay agile, secure, and ahead of the curve.

Thanks,

Steve Labeau – Principal Consultant / Blogger