The significant difference is Layer. The Azure Load Balancer traffic works at Layer 4, while Application Gateway works at Layer 7 traffic, and specifically with HTTP (including HTTPS and WebSockets).
Azure Application Gateway
Application Gateway (AGW) is web traffic, and security(OWASP) manage the web applications (one or multiple sites), i.e. load balancer that enables to drive traffic to the web applications manage using WAF.
Azure Application Gateway — Route Based Traffic
- AppsGW load balancer workload can make URI or Host Header routing based to the decision. Example: route the incoming URL can inbound to Images Pool and Videos request a path to video pool.
- AppsGW support end-to-end TLS/SSL encryption. The allow unencrypted traffic between AGW and backend servers, less time to processing to encrypt and decrypt the traffic.
- Distribution of traffic using (WAF Policy) according to one of several traffic-routing methods(priority, weighted, performance, geographic, multivalued and subnet).
Azure Application Gateway — Backend Pools
- Web application firewall (WAF) that protects your workload from common exploits like SQL injection attacks or cross-site scripting attacks. (OWASP) framework.k
- Continuous monitoring of endpoint health and automatic failover when endpoints fail.
- It provides application delivery controller (ADC) as a service, offering various Layer 7 load-balancing capabilities. Use it to optimize web farm productivity by offloading CPU-intensive SSL termination to the gateway.
Azure Load Balancer
Azure Load Balancer operates at layer four of the Open Systems Interconnection (OSI) model. LB is distributing load (incoming network traffic) across a group of backend resources or servers. Azure Load Balancer distributes inbound flows that arrive at the load balancer’s front end to backend pool instances. These flows are according to configured load balancing rules and health probes. The backend pool instances can be Azure Virtual Machines or instances in a virtual machine scale set.
A public load balancer can provide outbound connections for virtual machines (VMs) inside your virtual network. These connections are accomplished by translating their private IP addresses to public IP addresses. Public Load Balancers are used to load balance internet traffic to your VMs.
An internal (or private) load balancer is used where private IPs are needed at the frontend only. Internal load balancers are used to load balance traffic inside a virtual network. A load balancer frontend can be accessed from an on-premises network in a hybrid scenario.