Azure Function App creation fails with ServerFarmCreationNotAllowed

AlexanderAlvarado-7525 0 Reputation points
2026-09-22T18:15:56.7966667+00:00

I am trying to create an Azure Function App in the South Central US region using:

  • Operating system: Linux
  • Hosting plan: Flex Consumption
  • Runtime: Python 3.13
  • Instance size: 2048 MB

The deployment fails during preflight validation with:

  • ServerFarmCreationNotAllowed

The subscription is not allowed to create or update the serverfarm.

I have already verified the following:

  • The Azure subscription is Active
  • Microsoft.Web resource provider is Registered
  • The account performing the deployment has Owner access
  • No Azure Policy assignments are blocking the deployment
  • No subscription-level Deny Assignments are present
  • No resource-group Deny Assignments are present
  • Billing is current with no payment, credit, or spending-limit warnings
  • Other resources, including the storage account and Log Analytics workspace, were created successfully

The failed Activity Log event shows:

  • Operation: Validate Deployment
  • Status: Failed
  • Error: InvalidTemplateDeployment
  • Validation error: ValidationForResourceFailed
  • Inner error: ServerFarmCreationNotAllowed

I do not see a separate Microsoft.Web/serverFarms create/update Activity Log entry. The request appears to fail during preflight validation before the server farm resource is actually created.

At this point, I have not identified a billing, RBAC, policy, deny-assignment, or resource-provider registration issue.

Can someone confirm whether this error can be caused by a subscription-level App Service / Microsoft.Web restriction or backend entitlement, and what Microsoft needs to enable or remove so that the Function App can be created?

Azure Functions
Azure Functions

An Azure service that provides an event-driven serverless compute platform.

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  1. Rakesh Mishra 11,350 Reputation points Microsoft External Staff Moderator
    2026-09-23T01:15:11.5233333+00:00

    Hi @AlexanderAlvarado-7525 , we looked into the issue and please find below update.

    We have mitigated the issue with the help of backend team, and you should be able to create function app. Please try now and confirm. 

    This error occurs as per Azure automated platform policy to prevent resource creation abuse when resources are created via automated scripts. Your subscription is now exempted from the policy. Hope it clarifies the issue and let me know if you have any other questions.

    Please accept User's image as Yes if the answer is helpful so that it can help others in the community.

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  2. Divyesh Govaerdhanan 11,890 Reputation points MVP Volunteer Moderator
    2026-09-22T18:29:46.1266667+00:00

    Hi AlexanderAlvarado-7525,

    Thanks for the thorough troubleshooting, that's genuinely helpful. You've ruled out everything on the customer side (policy, RBAC, deny assignments, billing, resource provider registration), and the failure happening during preflight validation before the serverfarm resource is even created points to a subscription-level restriction Microsoft.Web/serverfarms rather than anything in your template or configuration.

    I'm escalating this to our backend team for investigation, since this pattern typically needs an internal fix applied to the subscription and isn't something you can resolve from the portal or CLI.

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