azure: Fix Load balancer IP setup

Fixing the issue where the load balancer IP was not set in the
range of the machine network CIDRs by setting it to the first
IP in the CIDR range.

Also extending this logic to non-existing vnet installs since
the problem can happen even during normal installs.

pkg/asset/manifests/azure/cluster.go

@@ -104,6 +104,35 @@ func GenerateClusterAssets(installConfig *installconfig.InstallConfig, clusterID
 	}
 
 	virtualNetworkID := ""
+	lbip := capz.DefaultInternalLBIPAddress
+	machineCidr := installConfig.Config.MachineNetwork
+	// Check if default lbip is within machine network.
+	isInMachineCIDR := false
+	for _, cidrRange := range machineCidr {
+		_, ipnet, err := net.ParseCIDR(cidrRange.CIDR.String())
+		if err != nil {
+			return nil, fmt.Errorf("failed to get machine network CIDR: %w", err)
+		}
+		if ipnet.Contains(net.ParseIP(lbip)) {
+			isInMachineCIDR = true
+			break
+		}
+	}
+
+	// If not in machine network, assign the first IP in the CIDR to lbip.
+	if !isInMachineCIDR {
+		ip, ipnet, err := net.ParseCIDR(machineCidr[0].CIDR.String())
+		if err != nil {
+			return nil, fmt.Errorf("failed to get machine network CIDR: %w", err)
+		}
+		lbip = ip.Mask(ipnet.Mask).String()
+	}
+	apiServerLB.FrontendIPs = []capz.FrontendIP{{
+		Name: fmt.Sprintf("%s-internal-frontEnd", clusterID.InfraID),
+		FrontendIPClass: capz.FrontendIPClass{
+			PrivateIPAddress: lbip,
+		},
+	}}
 	if installConfig.Config.Azure.VirtualNetwork != "" {
 		client, err := installConfig.Azure.Client()
 		if err != nil {
@@ -117,16 +146,12 @@ func GenerateClusterAssets(installConfig *installconfig.InstallConfig, clusterID
 		if virtualNetwork != nil {
 			virtualNetworkID = *virtualNetwork.ID
 		}
-		lbip, err := getNextAvailableIP(ctx, installConfig)
+		lbip, err := getNextAvailableIP(ctx, installConfig, lbip)
 		if err != nil {
 			return nil, err
 		}
-		apiServerLB.FrontendIPs = []capz.FrontendIP{{
-			Name: fmt.Sprintf("%s-internal-frontEnd", clusterID.InfraID),
-			FrontendIPClass: capz.FrontendIPClass{
-				PrivateIPAddress: lbip,
-			},
-		},
+		apiServerLB.FrontendIPs[0].FrontendIPClass = capz.FrontendIPClass{
+			PrivateIPAddress: lbip,
 		}
 	}
 
@@ -255,9 +280,7 @@ func GenerateClusterAssets(installConfig *installconfig.InstallConfig, clusterID
 	}, nil
 }
 
-func getNextAvailableIP(ctx context.Context, installConfig *installconfig.InstallConfig) (string, error) {
-	lbip := capz.DefaultInternalLBIPAddress
-	machineCidr := installConfig.Config.MachineNetwork
+func getNextAvailableIP(ctx context.Context, installConfig *installconfig.InstallConfig, lbip string) (string, error) {
 	client, err := installConfig.Azure.Client()
 	if err != nil {
 		return "", fmt.Errorf("failed to get azure client: %w", err)
@@ -267,6 +290,7 @@ func getNextAvailableIP(ctx context.Context, installConfig *installconfig.Instal
 		return "", fmt.Errorf("failed to get azure virtual network client: %w", err)
 	}
 
+	machineCidr := installConfig.Config.MachineNetwork
 	availableIP, err := vClient.CheckIPAddressAvailability(ctx, installConfig.Config.Azure.NetworkResourceGroupName, installConfig.Config.Azure.VirtualNetwork, lbip)
 	if err != nil {
 		return "", fmt.Errorf("failed to get azure ip availability: %w", err)