Microsoft Launches Logic Apps Automation SaaS with Built-In AI Agents and RAG

At Build 2026, Microsoft launched Azure Logic Apps Automation, a new managed SaaS SKU designed to let business teams build production-grade automations without dedicated integration developers. The service provides an isolated, single-tenant compute environment with VNET integration, RBAC, and audit logging enabled by default. Key features include three AI agent integration patterns—agent-loop orchestration, Microsoft Foundry agents, and managed sandbox harnesses—plus Knowledge as a Service (KBaaS), a fully managed RAG pipeline requiring no Cosmos DB or embedding model setup. Microsoft also announced general availability of the Logic Apps MCP Server, enabling existing workflows to be exposed as AI-callable tools, and Codeful Workflows for .NET-based code-first development.