diff --git a/examples/inventory-rolling-update/README.md b/examples/inventory-rolling-update/README.md
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+# Rolling update to targets from inventory plugin
+
+This example runs a rolling update to set of servers. The servers are defined in a Terraform configuration in [resources](./resources) directory and used as target nodes via `server_group` option of the inventory plugin.
+
+To run this example, you will need:
+
+- Terraform
+- Ansible
+- upcloud-ansible-collection and UpCloud python SDK (`upcloud-api>=2.5.0`)
+
+First configure your credentials to UpCloud Terraform provider and Ansible inventory plugin by setting `UPCLOUD_USERNAME` and `UPCLOUD_PASSWORD` environment variables.
+
+Create the servers defined in the Terraform configuration with `terraform apply` command.
+
+```sh
+terraform -chdir=resources apply
+# Answer yes, when propted by Terraform
+```
+
+Configure a NGINX server with static web page by running the [configure-webserver.yml](./configure-webserver.yml) playbook.
+
+```sh
+# For initial configuration, configure all targets in parallel
+ansible-playbook configure-webserver.yml --extra-vars "serial_override=0"
+
+# When updating the targets, specify which tag (cow, dog, hello, tiger) to use
+ansible-playbook configure-webserver.yml --extra-vars "animal=tiger"
+```
+
+To monitor how the rolling update proceeds, open another terminal window and curl the load-balancer URL. The URL is visible at the output of prevous `terraform apply` command and can be printed by running `terraform output`.
+
+```sh
+watch -n 0.75 curl -s $(terraform -chdir=resources output lb_url)
+```
+
+Finally, to cleanup the created cloud resources, run `terraform destroy` in the [resources](./resources) directory.
+
+```sh
+terraform -chdir=resources destroy
+```
diff --git a/examples/inventory-rolling-update/ansible.cfg b/examples/inventory-rolling-update/ansible.cfg
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+[defaults]
+host_key_checking = False
+inventory = ./inventory.upcloud.yml
+
+[inventory]
+enable_plugins = community.upcloud.upcloud
diff --git a/examples/inventory-rolling-update/configure-webserver.yml b/examples/inventory-rolling-update/configure-webserver.yml
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+++ b/examples/inventory-rolling-update/configure-webserver.yml
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+- name: Configure webserver
+  hosts: all
+  remote_user: admin
+  become: yes
+  serial: "{{ serial_override | default(1) }}"
+  vars:
+    animal: cow
+  tasks:
+    - name: Install nginx
+      apt:
+        package: nginx
+        state: latest
+        update_cache: yes
+    - name: Get latest static content release
+      uri:
+        url: https://api.github.com/repos/UpCloudLtd/hello-container/releases/latest
+      register: release
+    - name: Remote default from enabled sites
+      file:
+        path: /etc/nginx/sites-enabled/default
+        state: absent
+      notify:
+        - Restart nginx
+    - name: Download and unarchive static content ({{ animal }})
+      unarchive:
+        remote_src: yes
+        src: https://github.com/UpCloudLtd/hello-container/releases/download/{{ release.json.tag_name }}/hello-{{ animal }}.tar.gz
+        dest: /usr/share/nginx/html/
+      notify:
+        - Restart nginx
+    - name: Configure nginx
+      get_url:
+        url: https://github.com/UpCloudLtd/hello-container/releases/download/{{ release.json.tag_name }}/index.conf
+        dest: /etc/nginx/conf.d/
+      notify:
+        - Restart nginx
+  handlers:
+    - name: Restart nginx
+      service:
+        name: nginx
+        state: restarted
diff --git a/examples/inventory-rolling-update/inventory.upcloud.yml b/examples/inventory-rolling-update/inventory.upcloud.yml
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+++ b/examples/inventory-rolling-update/inventory.upcloud.yml
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+plugin: community.upcloud.upcloud
+server_group: ansible-inventory-example-servergroup
diff --git a/examples/inventory-rolling-update/resources/.gitignore b/examples/inventory-rolling-update/resources/.gitignore
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+++ b/examples/inventory-rolling-update/resources/.gitignore
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+.terraform/
+.terraform*
+*.tfstate*
diff --git a/examples/inventory-rolling-update/resources/main.tf b/examples/inventory-rolling-update/resources/main.tf
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+++ b/examples/inventory-rolling-update/resources/main.tf
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+terraform {
+  required_providers {
+    upcloud = {
+      source  = "UpCloudLtd/upcloud"
+      version = "~> 2.4"
+    }
+  }
+}
+
+variable "prefix" {
+  type    = string
+  default = "ansible-inventory-example-"
+}
+
+variable "zone" {
+  type    = string
+  default = "pl-waw1"
+}
+
+locals {
+  publickey_filename = one(fileset(pathexpand("~/.ssh/"), "*.pub"))
+  publickey          = file("~/.ssh/${local.publickey_filename}")
+}
+
+resource "upcloud_network" "network" {
+  name = "${var.prefix}net"
+  zone = var.zone
+
+  ip_network {
+    family  = "IPv4"
+    address = "10.100.1.0/24"
+    dhcp    = true
+  }
+}
+
+resource "upcloud_server" "webservers" {
+  count    = 3
+  hostname = "${var.prefix}server-${count.index}"
+  title    = "${var.prefix}server-${count.index}"
+  zone     = var.zone
+  plan     = "1xCPU-1GB"
+
+  metadata = true
+
+  login {
+    user = "admin"
+    keys = [
+      local.publickey,
+    ]
+  }
+  template {
+    storage = "Ubuntu Server 22.04 LTS (Jammy Jellyfish)"
+    size    = 25
+    title   = "${var.prefix}storage-${count.index}"
+  }
+
+  # In production, the public interface should be (in most cases) omitted:
+  # - Use a jump-host in the same network to control the application nodes.
+  # - Use a NAT gateway to provide internet access for the application nodes.
+  network_interface {
+    type = "public"
+  }
+
+  network_interface {
+    type = "utility"
+  }
+
+  network_interface {
+    type    = "private"
+    network = upcloud_network.network.id
+  }
+}
+
+resource "upcloud_server_group" "webservers" {
+  title = "${var.prefix}servergroup"
+  anti_affinity_policy = "yes"
+  members = upcloud_server.webservers[*].id
+}
+
+module "load_balancer" {
+  source = "UpCloudLtd/basic-loadbalancer/upcloud"
+
+  name                = "${var.prefix}lb"
+  zone                = var.zone
+  network             = upcloud_network.network.id
+  backend_servers     = [for v in upcloud_server.webservers : v.network_interface.2.ip_address]
+  backend_server_port = 80
+
+  frontend_port = 80
+}
+
+output "lb_url" {
+  value = module.load_balancer.dns_name
+}