Hi Rajesh, Yes, you can have VMs in subnets that have service endpoints, this is often used this way so that you can reach Azure services via VMs using that service endpoint. You can find service endpoints here: https://learn.microsoft.com/en-us/azure/virtual-network/virtual-network-service-endpoints-overview If you want to have all traffic on the same subnet you can use private endpoints for some services. https://learn.microsoft.com/en-us/azure/private-link/private-endpoint-overview
Can we create IaaS resources inside a subnet with Service Enpoint enabled?

If I enable Service Ep for a subnet, will I be able to create IaaS resources like VM or NIC in that subnet ?
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dashanan13 930 Reputation points
2024-02-17T09:18:46.48+00:00 Hei @Rajesh Swarnkar , Thanks for reaching out to Microsoft Q&A. As Martin Therkelsen already stated above, Yes a network (subnet) that has service endpoints can host other resouces (like VM and storage accounts) Service endpoints are for specific PAAS services to contact Azure via Azure network, they do not reserve the subnet to that service exclusively. If a subnet is reserved for a specific service like a firewall subnet then that subnet will not host anyother resource, this is mostly becasue that subnet will be used for sub resources generated by the dedicated resource. If this helped then do consider marking this as answer.