The Azure SQL Decision
When moving to Azure, one of the most common architecture decisions is which Azure SQL service to use. There are three main options: Azure SQL Database, Azure SQL Managed Instance, and SQL Server on Azure VM. This video focuses on Azure SQL Managed Instance — the option most people underestimate.
What is Azure SQL Managed Instance?
Azure SQL Managed Instance is a fully managed PaaS deployment of SQL Server that provides near 100% compatibility with on-premises SQL Server. Unlike Azure SQL Database (which is a cloud-native service with some limitations), Managed Instance supports almost all SQL Server features — including SQL Agent, CLR, cross-database queries, linked servers, and Service Broker.
SQL Database vs Managed Instance — Key Differences
- Compatibility — SQL Database: ~95% compatibility. Managed Instance: ~99.9% compatibility with on-prem SQL Server
- SQL Agent — Not available in SQL Database. Fully available in Managed Instance
- Cross-database queries — Limited in SQL Database. Fully supported in Managed Instance
- VNet integration — SQL Database uses service endpoints. Managed Instance deploys natively inside your VNet
- Cost — Managed Instance is significantly more expensive than SQL Database but cheaper than running SQL Server on a VM with full management overhead
When to Choose Managed Instance
Managed Instance is the right choice when you are lifting and shifting an on-premises SQL Server with minimal changes, when your application uses SQL Agent jobs, when you need cross-database transactions, or when your database uses features not available in Azure SQL Database.
Migration Strategy
The Azure Database Migration Service supports near-zero-downtime migration from on-premises SQL Server to Managed Instance. I walk through the migration steps in the video, including the assessment phase using the Database Migration Assessment tool to identify compatibility issues before you start.
Cost Considerations
Managed Instance is priced per vCore. The Azure Hybrid Benefit allows you to use existing SQL Server licences, reducing cost by up to 55%. Always evaluate whether SQL Database might cover your requirements — the price difference is significant, and SQL Database benefits from more aggressive Azure investment in new features.
My Recommendation
For greenfield applications, start with Azure SQL Database. For lift-and-shift migrations from on-premises SQL Server where application changes are not feasible, Managed Instance is usually the right answer. I have guided multiple enterprise customers through this decision across APAC — the compatibility assessment phase is critical and should not be skipped.
