AWS RDS vs Azure SQL DB vs SQL Server On-Premises

Features

AWS RDS for SQL Server

Azure SQL Database

SQL Server On-Premises

Deployment

Launch via AWS console by selecting SQL edition/size – automated provisioning in minutes, no OS install needed.

Instant provisioning of a database via portal/CLI – ready in minutes, no VM or OS to manage (fully platform-managed).

Provision hardware/VMs and install OS and SQL – slowest option, entirely manual (weeks to procure if new hardware).

Management

Fully managed by AWS – automated backups, patching during maintenance windows.

Fully managed by Azure – Microsoft handles all patching and maintenance.

Fully self-managed by your IT team (complete responsibility for maintenance).

Customization

Somewhat limited – no OS access, must use parameter groups for tuning; many but not all SQL features availableSomewhat limited – no OS access, must use parameter groups for tuning; many but not all SQL features available.

Very restricted – no OS or instance access, only DB-scoped settings; cannot use unsupported features (e.g., CLR, xp_cmdshell).

Unlimited – choose any hardware, OS, SQL configuration (most flexible).

Use Case

Great for simplifying DB management in AWS for standard workloads – companies that want cloud automation and can live within RDS feature limits (trading some flexibility for ease).

Best for new cloud-native apps, SaaS, and scenarios requiring zero infrastructure management – modern applications that can live within one DB (or use sharding/pools).

Ideal for strict data control, low-latency to on-prem apps, or existing data center investments; also when compliance or legacy systems mandate it.

Maintenance Responsibility

Amazon – AWS applies SQL patches during set maintenance windows (or automatic minor version upgrades).

Microsoft – fully automatic patch management and updates (you don’t even see it happening).

Your IT team entirely – on-prem requires internal processes for all updates.

Operational Control

Partial – you get an admin account but not full sysadmin; certain procedures and settings are blocked for stability.

Partial – you have db_owner on your databases and a contained “server” admin, but many instance-level features aren’t available (no control over master/tempdb beyond some settings).

Complete control at hardware, OS, and DB level – no restrictions (can even delay patches indefinitely, for example).

Backups

Automated: daily snapshots + log backups (PITR up to 35 days) are handled by AWS; you can also take manual snapshots for longer retention.

Automated: full PITR backups are done by Azure (e.g., every 5-10 min log backups); long-term retention can be configured for weekly/monthly/yearly backups.

Completely on user – typically use maintenance plans or enterprise backup tools writing to tapes/cloud.

Scalability

Vertical: modify instance class (reboot); Horizontal: Read Replicas (for Enterprise) allow up to 5 read-only copies (including cross-region); no horizontal write scaling (one primary).

Vertical: move between DTU/vCore tiers easily (some operations online); Horizontal: scale out by sharding or using multiple databases (Elastic Pool), or use readable geo-replicas – not transparent sharding, app must handle if needed.

Vertical: buy/upgrade hardware (major project); Horizontal: add servers and distribute load (requires significant effort and maybe app changes).

Performance

Strong performance for most workloads but with some cloud overhead: RDS uses EBS storage (e.g., gp3 or io2 volumes up to 64k+ IOPS), and you can choose instance types with more memory/CPU. Very large workloads or those needing special hardware (like NVMe) might not fit in RDS’s offerings as of now.

Excellent for typical workloads, with options to choose higher tiers if needed: Business Critical has low-latency SSD and 2-4 replicas for read, Hyperscale can scale out readers and handle very large DBs. The platform handles tuning, but you might sacrifice some extreme tuning (e.g., can’t control file placement).

Potentially the highest (you can use top-end hardware, dedicated storage arrays, etc.); ultimate performance if budget allows, with no virtualization overhead if physical.

Elasticity

No automatic compute scaling – the instance class is fixed. RDS does support auto storage increase, so storage can grow with usage. For compute, one could use AWS Application Auto Scaling for RDS in some cases to trigger a bigger instance on schedule, but it involves a reboot – so essentially not seamless auto-scale.

Yes (Serverless option) – Azure SQL DB serverless will auto-scale CPU/RAM within set bounds and even pause the DB on inactivity, providing true on-demand elasticity. For provisioned databases, you can scale with an API call (not automatic, but quick) and use Azure Automation to schedule or trigger it.

None – capacity is fixed once purchased. Scaling requires planning and manual execution (or new hardware purchase).

SQL Server Version

RDS supports multiple SQL Server versions (as of 2023, versions 2012, 2014, 2016, 2017, 2019, and now 2022 are available on RDS) – you choose a major version when launching, and AWS handles the minor version patching. However, older versions eventually get deprecated for new instances.

Azure SQL Database always runs the latest stable SQL Server engine managed by Microsoft. It doesn’t match a specific legacy version but supports compatibility levels up to 160 (SQL 2022) for older T-SQL compatibility.

Any version/edition for which you have media and license – including very old versions (some orgs still run 2008 or 2005 for legacy apps, which on-prem allows, albeit unsupported by MS).

SQL Feature Support

Most SQL Server features are supported, but RDS lacks extensibility: no FILESTREAM, PolyBase, ML Services, CLR (2017+), or xp_cmdshell. Some server-level settings can’t be changed after launch.

Azure SQL DB supports most SQL features but lacks SQL Agent, CLR assemblies, FILESTREAM, and cross-database transactions. Features like JSON, Full-Text Search, In-Memory OLTP, and Temporal Tables are fully supported.

Everything SQL Server offers is available if you set it up – including things like replication, Linked Servers, Service Broker, etc. You have to configure them, but nothing is disabled by a provider.

Cross-Database Queries

Yes, if multiple databases are on the same RDS instance, you can cross-query them. You cannot cross-query between different RDS instances directly (no official linked server support for cross-instance, since you lack sysadmin to configure it, though heterogeneous links might be possible in some cases with limitations).

No (not directly): each Azure SQL DB is isolated. Cross-DB joins require external tables or client-side join logic. Azure provides elastic query which is essentially a workaround (create external data source to another DB). So it’s not as seamless as on a full instance.

Yes, common on on-prem to have many DBs on one server and join them. Also, cross-server via linked server is possible.

Custom Software

No – cannot access the OS. Even enabling certain SQL features that require custom action is not possible. For example, you cannot install a custom certificate for SQL Server at the OS level (RDS manages the certificates). You rely on what AWS provides out-of-box.

No – you get only the database environment. If you need something like a specialized full-text extender or a custom compression DLL, you can’t install that on Azure SQL DB. You’d have to move to MI or VM if installation is required.

Yes – common to have monitoring agents (SCOM, etc.) on SQL servers, or backup agents. You could even run a third-party application on the same machine (though best practice is to separate, it’s up to you).

Network Configuration

Deployed in your AWS VPC – you choose subnet group (which maps to subnets in different AZs for Multi-AZ). Usually kept in a private subnet; you control access via security groups and route tables. Option for a public endpoint exists (mainly for development or if you have no VPN).

By default, accessible over the internet with a secure endpoint (you restrict by firewall rules). If needed, use Private Link to bring it into your VNet with a private IP. You don’t see or manage the underlying network, but you can control connectivity at a high level (public/private).

On your corporate network – ultimate control (your own firewall, switches, VLANs). You can make it as open or isolated as you need. Typically behind corporate firewalls and accessible only within company network.

Security

RDS encrypts data, logs, and backups using AWS KMS, supports SSL for in-transit encryption, and integrates with AWS Directory Service for Windows Authentication. AWS manages OS security patching, and RDS meets compliance standards like SOC1 and PCI DSS.

Azure SQL DB enforces TDE for data at rest, encrypted connections, and compliance with PCI DSS, HIPAA, etc. Auditing and Advanced Threat Protection enhance security, while Private Link restricts network access. As a multi-tenant service, OS-level access is not available, but Microsoft ensures data isolation and certification compliance.

Entirely on you – from physical security of the server room, to network security, to OS and SQL security. You can achieve very high security (even completely air-gapped networks), but it requires strict processes. Encryption (TDE, etc.) must be configured by you.

Authentication

Supports SQL authentication and Windows Authentication via AWS Managed Microsoft AD, allowing domain-joined AD users to log in. Does not support Azure AD or IAM authentication for SQL Server.

Supports SQL authentication and Azure AD authentication, allowing Azure AD users to log in with modern identity management and MFA. Traditional Windows AD accounts require syncing to Azure AD for authentication.

Windows Auth and SQL Auth – often tightly integrated with on-prem AD. You can enforce AD group policies, etc. If not on a domain, SQL Auth is used. No cloud-specific auth out of the box (though you could integrate Kerberos and AD FS if needed for fancy setups).

High Availability

RDS Multi-AZ maintains a synchronous standby replica in another AZ, enabling automatic failover (30-60s) during outages. The application reconnects to the same endpoint seamlessly.

Azure SQL DB provides built-in HA with at least three replicas: General Purpose uses Azure storage redundancy, while Business Critical employs a 3-4 node Always On quorum with 99.99% SLA. Failovers are automatic with minimal impact.

Many options but all manual: Failover Cluster Instances (with shared storage like SAN), Always On AG, database mirroring (old), log shipping as quasi-HA. Requires redundant hardware and networking. You manage failover process (though AG can auto-failover).

Disaster Recovery

RDS Enterprise Edition supports Cross-Region Read Replicas for DR and read scaling, but writes require manual promotion. Non-Enterprise users rely on manual snapshots for cold standby, as automated cross-region failover isn’t built-in.

Supports Active Geo-Replication with up to 4 readable replicas in different regions. Failover can be manual or automated via Auto-Failover Groups. If not configured, point-in-time restore to another region serves as a DR option.

Entirely on you: could be as robust as a secondary data center with log shipping or AGs, or as basic as offsite backup tapes. DR testing and execution are your ops team’s duty.

Pricing

RDS for SQL Server charges hourly based on instance class, storage, and I/O. Pricing includes the SQL license, making it costlier than MySQL/Postgres. A db.m5.2xlarge (8 vCPU, 32GB) costs ~$3/hour, while Multi-AZ roughly doubles the price.

Azure SQL DB pricing is based on compute (vCores or DTUs) and storage. An 8 vCore General Purpose database with 4TB costs ~$1,800/month, while Business Critical is 2-3× higher due to extra replicas and SSDs. Hyperscale storage is charged per GB, but compute is similar to General Purpose. SQL licensing is included.

Big upfront CapEx for hardware & licenses, then minor OpEx (power, cooling). Amortized 3-year cost for an 8-core server might be ~$1-3k/month depending on edition (Standard vs Enterprise), but you own the asset. Scaling requires new investment.

Licensing Model

RDS for SQL Server is License-Included only (except RDS Custom); BYOL is not supported. Costs include SQL Server CALs or per-core licensing, with discounts available via Reserved Instances (1-3 years). Express/Web editions are cheaper but limited.

Azure SQL DB follows a license-included model, but Azure Hybrid Benefit reduces costs if you bring existing licenses. Billing is pay-as-you-go or reserved capacity (1-3 years). There are no CALs, and Enterprise Edition (SA) holders get cost breaks on Business Critical.

Perpetual or Subscription licenses. Typically purchase per core (Enterprise ~$7.5k/core, Standard ~$1.9k/core) plus optional SA ~25%/yr. Hardware bought or leased separately. No builtin pay-per-use; however, you could run SQL Developer or Express free in non-prod.

Pricing Comparison of Database Configuration

8vCore + 4TB Data size + Backup,  Single Instance

A db.m5.2xlarge (8 vCPU) RDS SQL Standard instance with 4TB General Purpose storage in US East costs $2.2k–$2.5k/month on-demand ($3.00–$3.50/hour), including the SQL license. Running the same on EC2 (BYOL) is cheaper but lacks RDS’s management benefits.

An 8 vCore, 4TB General Purpose Azure SQL DB costs ~$1,800/month ($1,400 compute + $400 storage).
Switching to Business Critical raises the price to $4,000–$5,000/month. Hybrid Benefit can cut vCore costs by ~40%.

On-prem not monthly billed, but roughly ~$1k (Std) / ~$3k (Ent) per month value when spread over a few years.

8vCore + 4TB Data size + Backup + DR/HA

The same 8 vCPU Multi-AZ (HA enabled) instance costs $4.4k–$5k/month due to a standby replica. Adding a cross-region read replica increases the total to $7k+/month. Costs can be reduced with Reserved Instances or Standard edition instead of Enterprise.

HA is included at no extra cost. For DR, a geo-replicated secondary (8 vCore GP instance) adds ~$1,800/month, bringing total costs to $3,600/month.
Auto-Failover Groups require paying for both primary & secondary. Business Critical geo-secondaries cost the full BC rate.

Multi-site on-prem: requires second set of hardware (and possibly second license if active-active).
Hard to monthly-ize, but essentially 2× hardware cost; SQL license for passive is free with SA.