
Introduction
As ARM template deployments grow in complexity, structuring them correctly becomes critical. In Microsoft Azure, two primary approaches exist for organizing complex deployments:
- Linked Templates
- Nested Templates
Both are built using the same deployment mechanism, but they serve different purposes. Choosing the wrong approach can lead to unnecessary complexity, poor maintainability, or deployment issues.
This article explains the differences, strengths, and when to use each.
What They Have in Common
Both linked and nested templates:
- Use Microsoft.Resources/deployments
- Support Parameter Passing
- Allow Dependency Control
- Enable Modular Deployments
The difference is not in capability, but in how they are structured and managed.
Linked Templates
Definition
Linked templates are external ARM templates referenced by a parent template.
They are stored outside the main template and accessed via a URI.
Key Characteristics
- Stored in external locations
- Referenced using templateLink
- Require network access
- Suitable for reuse across projects
Advantages
- High Reusability
- Better For Large-Scale Deployments
- Supports Team-Based Ownership
- Easier Version Control and Updates
Limitations
- Requires hosting (Azure Storage, repository, etc.)
- Access control must be managed
- Dependency on external availability
Nested Templates
Definition
Nested templates are inline templates defined inside a parent template.
They exist within the same file.
Key Characteristics
- Embedded Inside Parent Template
- No External Dependencies
- Uses Inline Template Definition
- Single-File Deployment
Advantages
- No need for External Storage
- Easier Portability
- Simplified Deployment Packaging
- Good for Logical Grouping
Limitations
- Limited Reusability
- Large Templates Become Difficult to Manage
- Not ideal for Multi-Team Environments
Key Differences
Location
- Linked templates: external files
- Nested templates: inside parent template
Reusability
- Linked templates: reusable across projects
- Nested templates: limited reuse
Deployment Dependency
- Linked templates: require accessible URI
- Nested templates: self-contained
Complexity Management
- Linked templates: better for large systems
- Nested templates: better for moderate complexity
Team Collaboration
- Linked templates: supports separation of responsibilities
- Nested templates: centralized control
When to Use Linked Templates
Use linked templates when:
- Building enterprise-scale deployments
- Multiple teams manage different components
- Templates need to be reused across environments
- Version control and lifecycle management are required
When to Use Nested Templates
Use nested templates when:
- You want a single deployment file
- External hosting is not desirable
- Deployment complexity is moderate
- Logical grouping within one template is sufficient
Practical Comparison Scenario
Scenario: Deploying a full environment
Components:
- Networking
- Compute
- Storage
- Identity
Using Linked Templates
- network.json
- compute.json
- storage.json
- identity.json
Each managed separately and referenced by the main template.
Best for:
- Large environments
- Team-based deployments
Using Nested Templates
All components defined inside one template:
- Nested section for networking
- Nested section for compute
- Nested section for storage
Best for:
- Controlled, single-team deployments
- Simpler environments
Common Mistakes
Using Nested Templates for Large Systems
Results in:
- Massive files
- Difficult maintenance
- Poor readability
Using Linked Templates Without Structure
Results in:
- Poor organization
- Hard-to-track dependencies
- Deployment confusion
Ignoring Deployment Dependencies
Both approaches require:
- Proper dependency management
- Correct deployment order
Best Practice Approach
In real-world environments, the best solution is often a combination.
Hybrid Model
- Use linked templates for major components
- Use nested templates for small logical groupings
This provides:
- Scalability
- Maintainability
- Flexibility
Conclusion
Linked and nested ARM templates are not competing approaches. They are complementary tools designed for different scenarios.
- Linked templates provide scalability and reuse
- Nested templates provide simplicity and portability
Choosing the right approach depends on:
- Deployment size
- Team structure
- Reusability requirements
ARM templates are not just about deployment.
They are about how you Design and Organize Infrastructure at Scale.

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