When to use Azure Load Balancer vs Application Gateway

Azure Load Balancer vs Application Gateway is same as if we talk about TCP vs HTTP load balancer, to understand this you need to first understand differences between Layer 4 and Layer 7 Load Balancing

 Let’s go back to OSI model.

Layer 4 load balancing operates at the intermediate transport layer, which deals with delivery of messages with no regard to the content of the messages. Transmission Control Protocol (TCP) is the Layer 4 protocol for Hypertext Transfer Protocol (HTTP) traffic on the Internet. Layer 4 load balancers simply forward network packets to and from the upstream server without inspecting the content of the packets. They can make limited routing decisions by inspecting the first few packets in the TCP stream

Layer 7 load balancing operates at the high‑level application layer, which deals with the actual content of each message. HTTP is the predominant Layer 7 protocol for website traffic on the Internet. Layer 7 load balancers route network traffic in a much more sophisticated way than Layer 4 load balancers, particularly applicable to TCP‑based traffic such as HTTP. A Layer 7 load balancer terminates the network traffic and reads the message within. It can make a load‑balancing decision based on the content of the message (the URL or cookie, for example).

Layer 7 load balancing is more CPU‑intensive than packet‑based Layer 4 load balancing, but rarely causes degraded performance on a modern server. Layer 7 load balancing enables the load balancer to make smarter load‑balancing decisions, and to apply optimizations and changes to the content (such as compression and encryption). It uses buffering to offload slow connections from the upstream servers, which improves performance.

Let’s look at a simple example. A user visits a high‑traffic website. Over the course of the user’s session, he or she might request static content such as images or video, dynamic content such as a news feed, and even transactional information such as order status. Layer 7 load balancing allows the load balancer to route a request based on information in the request itself, such as what kind of content is being requested. So now a request for an image or video can be routed to the servers that store it and are highly optimized to serve up multimedia content. Requests for transactional information such as a discounted price can be routed to the application server responsible for managing pricing. Example NGINX are the load‑balancing solutions used by high‑traffic websites such as Dropbox, Netflix, and Zynga.

Azure Load balancing provides a higher level of availability and scale by spreading incoming requests across multiple virtual machines. Azure Application Gateway is a web traffic load balancer that enables you to manage traffic to your web applications. Traditional load balancers operate at the transport layer (OSI layer 4 - TCP and UDP) and route traffic based on source IP address and port, to a destination IP address and port.

Application Gateway can make routing decisions based on additional attributes of an HTTP request, for example URI path or host headers. For example, you can route traffic based on the incoming URL. So if /images is in the incoming URL, you can route traffic to a specific set of servers (known as a pool) configured for images. If /video is in the URL, that traffic is routed to another pool that's optimized for videos. This type of routing is known as application layer (OSI layer 7) load balancing.

In your use case, you can use both, it’s a matter of your needs. Load balancer just forwards traffic to your vms, while application gateway can do path based routing, SSL offloading, has WAF capabilities, and so on. But it costs a lot more and is clunky.