First, we need to create a local network gateway. This refers to the on-premises location where we have Windows Server 2012 R2 installed with RRAS enabled.

To create the local network gateway, perform the following steps:

1. Navigate to Azure portal by opening https://portal.azure.com/.
2. Select Create a resource and type Local network gateway into the search box. Select Local network gateway from the list and create a new one.
3. On the Create local network gateway screen, add the following values:
   • Name: PacktOnPremisesGateway.
   • IP address: Here, you need to fill in the public IP address from the on-premises VPN device where Azure needs to connect to.
   • Address space: 82.173.0.0/16. This represents the address ranges for the on-premises network. You can add multiple address ranges.
   • Configure BGP settings: Don't select this.
   • Subscription: Select the same subscription that we used for the previous examples.
   • Resource group: Select the resource group that we already created, that is, PacktVPNResourceGroup.
   • Location: Select the same location where the VNet resides, that is, East US:

4. Click Create.