Incident Response Playbook for Hybrid Cloud Ransomware Attacks

This document provides a comprehensive, phased guide for responding to, recovering from, and hardening against a sophisticated ransomware attack within a hybrid Microsoft environment. It covers tactical steps from initial containment in both on-premise and Azure environments to long-term strategic resilience. The methodology emphasizes building back stronger by leveraging cloud-native security controls and adopting a Zero Trust mindset.

Scenario Overview and Threat Model

This playbook addresses a critical incident where a ransomware attack has successfully compromised a hybrid infrastructure. The environment consists of an on-premise Active Directory domain, file servers, and databases, with an established identity synchronization to Microsoft Entra ID (formerly Azure AD) and some workloads running in Azure IaaS.

Threat Scenario: Attackers gained initial access via a compromised credential, moved laterally through the on-premise network, and deployed ransomware. Key on-premise systems are encrypted, including Domain Controllers, file shares, and application databases. The business is at a standstill, facing significant financial loss and data exfiltration risk.

Primary Objectives of the Response

  • Containment: Immediately halt the spread of the ransomware across on-premise and cloud resources.
  • Eradication: Securely eliminate all attacker presence from the environment.
  • Recovery: Safely restore critical business services with minimal data loss, prioritizing identity and core applications.
  • Resilience: Harden the new environment to prevent a recurrence of the same or similar attacks.

Common Pitfalls and Strategic Missteps in Hybrid Recovery

An effective response requires avoiding common errors that can prolong downtime or lead to re-infection. A successful strategy evolves beyond initial reactive steps to address the root cause and systemic weaknesses.

Key Challenges to Anticipate:

Pitfall Description & Impact Corrective Strategy
Incomplete Containment Isolating on-premise servers but failing to lock down corresponding cloud VMs allows the threat to persist and spread via the hybrid connection. Implement parallel isolation measures using on-premise network ACLs and cloud-native Network Security Groups (NSGs) simultaneously.
Restoring to a “Dirty” Environment Attempting to restore data back onto compromised infrastructure or networks leads to immediate re-infection. Establish a completely new, isolated “clean room” VNet in Azure. All services are restored into this sterile environment first.
Neglecting Endpoint Remediation Focusing solely on servers while ignoring compromised user workstations. Reconnecting clean servers to a dirty endpoint network invalidates all recovery efforts. Mandate a comprehensive endpoint remediation strategy (EDR scans, re-imaging) before allowing any user device to connect to restored services.
Unvalidated Backups Assuming backups are clean. Ransomware often has a dwell time, meaning recent backups may contain dormant malware. All backups must be restored to an isolated “detonation chamber” sandbox, scanned, and monitored for malicious activity before being certified as clean.
Overlooking DNS and Dependencies Successfully restoring services but having no plan for how users and applications will find them. This leads to extended, preventable downtime. Develop a detailed DNS cutover plan as part of the recovery phase, mapping old hostnames to new private IP addresses in the recovery environment.

The 5-Phase Incident Response and Recovery Playbook

This playbook outlines a structured, five-phase approach to guide technical teams through the crisis, from initial alert to long-term strategic improvement.

Phase 1: Identification & Containment (Hours 0-4)

Goal: Stop the bleeding and assess the blast radius.
  1. Activate Incident Response Team: Formally declare a major incident. Establish a war room and a clear communication lead to manage updates to stakeholders.
  2. Isolate Network Segments:
    • On-Premise: Apply restrictive Access Control Lists (ACLs) on core switches or physically disconnect network cables from compromised servers. Block all traffic except to a designated forensics network.
    • Azure: Create a high-priority Network Security Group rule to block all traffic to and from compromised VMs. 
      NSG Name: nsg-quarantine-lockdown
Rule: DenyAll_Inbound_Outbound | Priority: 100 | Action: Deny
  3. Preserve Forensic Evidence: Before altering any system, preserve its state for investigation.
    • If possible, perform a memory dump of critical compromised servers to capture volatile data.
    • In Azure, create snapshots of all compromised VM disks. Use a clear naming convention: snap-vm-dc01-compromised-forensics-[YYYYMMDD]
  4. Analyze Cloud & Identity Logs: Immediately investigate for signs of compromise in the cloud control plane.
    • Review Azure Activity Logs for unauthorized resource creation/modification.
    • Review Entra ID sign-in and audit logs for suspicious sign-ins, privilege escalations, or MFA changes.
    • Triage all high-severity alerts in Microsoft Defender for Cloud.

Phase 2: Eradication & Clean Environment Preparation (Hours 4-24)

Goal: Eliminate attacker access and build a sterile foundation for recovery.
  1. Execute Global Credential Reset: Assume all credentials are compromised.
    • In Entra ID, force a password reset for all users and revoke all active sessions using PowerShell:Revoke-AzureADUserAllRefreshToken
    • Once a clean on-premise Domain Controller is established, reset the Kerberos Ticket Granting Ticket (krbtgt) account password twice to invalidate all existing Kerberos tickets.
  2. Establish a Clean Recovery Environment in Azure:
    • Resource Group:rg-recovery-prod-eastus-01
    • Virtual Network:vnet-recovery-prod-eastus-01  (with a new, non-overlapping IP address space).
    • Network Security Group:nsg-recovery-strict-baseline(initially denies all traffic; rules will be added explicitly).
  3. Validate Backups in a Sandbox:
    1. Deploy a temporary “detonation chamber” VM inside the recovery VNet, disconnected from all other networks.
    2. Mount a storage volume containing the latest backups (e.g., from Veeam backups in Azure Blob Storage).
    3. Perform a test restore and run comprehensive anti-malware scans. Monitor the sandbox VM for several hours for any anomalous process or network activity before certifying the backup as “clean.”

Phase 3: Service Restoration & Validation (Hours 24-72)

Goal: Systematically restore business services in order of dependency.
  1. Restore Identity Services (Top Priority):
    • Deploy a new Windows Server VM (e.g., vm-newdc01-prod-eastus-01 ) from a fresh Azure Marketplace image into the recovery VNet.
    • Promote it to a Domain Controller, either restoring Active Directory from a validated backup or creating a new forest if backups cannot be trusted. Seize all FSMO roles.
    • Install Azure AD Connect on a new, dedicated server to re-establish identity synchronization.
  2. Restore Critical Database (ERP System):
    • Leverage a Platform-as-a-Service (PaaS) solution to improve security. Provision a new Azure SQL Database instance (e.g.,sqldb-erp-prod-eastus-01
    • Configure its firewall to only allow access from the private IPs of the new application servers.
    • Restore the database from the latest validated .bak file.
  3. Restore File Services and Applications:
    • Deploy new application server VMs into the recovery VNet.
    • Update application configuration files with the new database connection string:DATABASE_CONNECTION_URI...
    • Deploy a new Windows File Server or utilize Azure Files. Restore data from validated backups.
  4. Execute DNS Cutover: Update on-premise DNS servers to point critical service records (A records, CNAMEs) to the new private IP addresses of the restored VMs in Azure.

Phase 4: Security Hardening & Reconnection (Post-Recovery)

Goal: Build back stronger by implementing modern security controls before re-admitting users.
  1. Enforce Zero Trust Identity Controls:
    • Conditional Access: Create a policy namedCA-Global-Require-MFA-for-Admins targeting all administrative roles, requiring MFA for all cloud app access.
    • Privileged Identity Management (PIM): Configure all Global Administrator and other critical roles to require PIM activation. This eliminates standing admin access.
  2. Deploy Centralized Monitoring with Azure Sentinel:
    • Create a new Azure Sentinel workspace and enable data connectors for Entra ID, Azure Activity, Microsoft Defender for Cloud, and Windows Security Events (via Azure Monitor Agent).
    • Enable built-in analytics rules for ransomware activity, credential theft, and suspicious lateral movement.
  3. Harden VM Access and Patching:
    • Enable Just-in-Time (JIT) VM Access in Microsoft Defender for Cloud to keep RDP/SSH ports closed by default.
    • Enroll all new VMs in Azure Update Management to enforce a strict and automated patching schedule.
  4. Phased User Reconnection: Reconnect users in controlled phases, starting with IT. Closely monitor Sentinel and endpoint logs for any anomalies before proceeding to the next phase.

Phase 5: Normalization, Validation & Resilience (Long Term)

Goal: Transition from crisis mode to a state of continuous improvement and proven resilience.
  1. Comprehensive Endpoint Remediation: Deploy an EDR solution (e.g., Microsoft Defender for Endpoint) to all user workstations. Isolate, wipe, and re-image any device showing signs of compromise.
  2. Third-Party Penetration Test: Engage an external security firm to validate the new environment’s security controls and attempt to breach them.
  3. Secure Decommissioning: Securely wipe and dismantle all compromised on-premise hardware according to data destruction best practices.
  4. Overhaul Backup Strategy (3-2-1-1-0 Rule):
    • Implement a strategy of 3 copies, on 2 media, with 1 copy off-site, 1 copy immutable, and 0 test errors.
    • Utilize Azure Backup with Recovery Services Vaults in a paired region and enable immutable storage for backup data.
    • Automate quarterly recovery drills to validate backup integrity and process.
  5. Update and Drill the IR Plan: Conduct a blameless post-mortem, update the formal IR plan with lessons learned, and run regular tabletop exercises to ensure team readiness.

 

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