diff --git a/cloudconfig/util_test.go b/cloudconfig/util_test.go
new file mode 100644
index 0000000..75c2073
--- /dev/null
+++ b/cloudconfig/util_test.go
@@ -0,0 +1,196 @@
+package cloudconfig
+
+import (
+	"fmt"
+	"testing"
+
+	"github.com/cloudbase/garm-provider-common/params"
+	"github.com/stretchr/testify/require"
+)
+
+var (
+	fileName          = "test-filename"
+	downloadURL       = "https://example.com/test.zip"
+	tempDownloadToken = "test-token"
+	extraSpecsJson    = `{
+        "runner_install_template": "dGVzdF90ZW1wbGF0ZToge3sgLlJ1bm5lck5hbWUgfX0gLSB7eyAuRXh0cmFDb250ZXh0LnRlc3RfdmFyMSB9fSAtIHt7IC5FeHRyYUNvbnRleHQudGVzdF92YXIyIH19",
+        "extra_context": {
+            "test_var1": "bogus-value1",
+            "test_var2": "bogus-value2"
+        },
+        "pre_install_scripts": {
+            "test-script": "dGVzdC1zY3JpcHQtY29udGVudA=="
+        }
+    }`
+
+	newCloudCfg     = NewDefaultCloudInitConfig()
+	bootstrapParams = params.BootstrapInstance{
+		ExtraSpecs: []byte(extraSpecsJson),
+		UserDataOptions: params.UserDataOptions{
+			DisableUpdatesOnBoot: newCloudCfg.PackageUpgrade,
+			ExtraPackages:        newCloudCfg.Packages,
+		},
+	}
+	tools = params.RunnerApplicationDownload{
+		Filename:          &fileName,
+		DownloadURL:       &downloadURL,
+		TempDownloadToken: &tempDownloadToken,
+	}
+)
+
+func TestGetSpecs(t *testing.T) {
+	expectedSpecs := CloudConfigSpec{
+		RunnerInstallTemplate: []byte("test_template: {{ .RunnerName }} - {{ .ExtraContext.test_var1 }} - {{ .ExtraContext.test_var2 }}"),
+		ExtraContext: map[string]string{
+			"test_var1": "bogus-value1",
+			"test_var2": "bogus-value2",
+		},
+		PreInstallScripts: map[string][]byte{
+			"test-script": []byte("test-script-content"),
+		},
+	}
+
+	specs, err := GetSpecs(bootstrapParams)
+	require.NoError(t, err)
+	require.Equal(t, expectedSpecs, specs)
+}
+
+func TestGetSpecsExtraSpecsNil(t *testing.T) {
+	bootstrapParams := params.BootstrapInstance{
+		ExtraSpecs: []byte(`{"runner_install_template": "dGVzdA=="}`),
+	}
+
+	specs, err := GetSpecs(bootstrapParams)
+	require.NoError(t, err)
+	require.Equal(t, "test", string(specs.RunnerInstallTemplate))
+}
+
+func TestGetSpecsUnmarshalFailed(t *testing.T) {
+	bootstrapParams := params.BootstrapInstance{
+		ExtraSpecs: []byte("invalid-json"),
+	}
+
+	_, err := GetSpecs(bootstrapParams)
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "unmarshaling extra specs: invalid character")
+}
+
+func TestGetRunnerInstallScript(t *testing.T) {
+	script, err := GetRunnerInstallScript(bootstrapParams, tools, "test-runner-name")
+	require.NoError(t, err)
+	require.Equal(t, "test_template: test-runner-name - bogus-value1 - bogus-value2", string(script))
+}
+
+func TestGetRunnerInstallScriptMissingFilename(t *testing.T) {
+	_, err := GetRunnerInstallScript(bootstrapParams, params.RunnerApplicationDownload{}, "test-runner-name")
+	require.Error(t, err)
+	require.EqualError(t, err, "missing tools filename")
+}
+
+func TestGetRunnerInstallScriptMissingURL(t *testing.T) {
+	tools := params.RunnerApplicationDownload{
+		Filename: &fileName,
+	}
+
+	_, err := GetRunnerInstallScript(params.BootstrapInstance{}, tools, "test-runner-name")
+	require.Error(t, err)
+	require.EqualError(t, err, "missing tools download URL")
+}
+
+func TestGetRunnerInstallScriptGettingSpecsFailed(t *testing.T) {
+	bootstrapParams := params.BootstrapInstance{
+		ExtraSpecs: []byte("invalid-json"),
+	}
+
+	_, err := GetRunnerInstallScript(bootstrapParams, tools, "test-runner-name")
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "getting specs: unmarshaling extra specs: invalid character")
+}
+
+func TestGetRunnerInstallScriptFailed(t *testing.T) {
+	_, err := GetRunnerInstallScript(params.BootstrapInstance{}, tools, "test-runner-name")
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "generating script: unsupported os type: ")
+}
+
+func TestGetCloudInitConfig(t *testing.T) {
+	cloudInitCfg, err := GetCloudInitConfig(bootstrapParams, []byte("test-install-script"))
+	require.NoError(t, err)
+	require.Contains(t, cloudInitCfg, `#cloud-config`)
+}
+
+func TestGetCloudInitConfigGetSpecsFailed(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		ExtraSpecs: []byte("invalid-json"),
+	}
+
+	_, err := GetCloudInitConfig(bootstrapParams, []byte("test-install-script"))
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "getting specs: unmarshaling extra specs: invalid character")
+}
+
+func TestGetCloudInitConfigAddCACertBundleFailed(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		CACertBundle: []byte(`dummy-ca-cert-bundle`),
+	}
+
+	_, err := GetCloudInitConfig(bootstrapParams, []byte("test-install-script"))
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "adding CA cert bundle: failed to parse CA cert bundle")
+}
+
+func TestGetCloudConfigForLinux(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		OSType: "linux",
+		UserDataOptions: params.UserDataOptions{
+			DisableUpdatesOnBoot: newCloudCfg.PackageUpgrade,
+			ExtraPackages:        newCloudCfg.Packages,
+		},
+	}
+
+	cloudCfg, err := GetCloudConfig(bootstrapParams, tools, "test-runner-name")
+	require.NoError(t, err)
+	require.Contains(t, cloudCfg, `#cloud-config`)
+}
+
+func TestGetCloudConfigForWindows(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		OSType: "windows",
+		UserDataOptions: params.UserDataOptions{
+			DisableUpdatesOnBoot: newCloudCfg.PackageUpgrade,
+			ExtraPackages:        newCloudCfg.Packages,
+		},
+	}
+
+	cloudCfg, err := GetCloudConfig(bootstrapParams, tools, "test-runner-name")
+	require.NoError(t, err)
+	require.Contains(t, cloudCfg, `#ps1_sysnative`)
+}
+
+func TestGetCloudConfigGeneratingScriptFailed(t *testing.T) {
+	_, err := GetCloudConfig(bootstrapParams, params.RunnerApplicationDownload{}, "test-runner-name")
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "generating script: missing tools filename")
+}
+
+func TestGetCloudConfigInitFailed(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		CACertBundle: []byte(`dummy-ca-cert-bundle`),
+		OSType:       "linux",
+	}
+
+	_, err := GetCloudConfig(bootstrapParams, tools, "test-runner-name")
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "getting cloud init config: adding CA cert bundle: failed to parse CA cert bundle")
+}
+
+func TestGetCloudConfigUnknownOSType(t *testing.T) {
+	bootstrapParams = params.BootstrapInstance{
+		ExtraSpecs: []byte(extraSpecsJson),
+		OSType:     "dummy-os-type",
+	}
+
+	_, err := GetCloudConfig(bootstrapParams, tools, "test-runner-name")
+	require.Error(t, err)
+	require.EqualError(t, err, fmt.Sprintf("unknown os type: %s", bootstrapParams.OSType))
+}