Azure SQL Managed Instance vs Azure SQL Database

Compare Azure SQL MI vs Azure SQL DB

Features

Azure SQL Managed Instance

Azure SQL Database

Deployment

Created via Azure portal in a VNet; a few hours to provision fully, but minimal user config (Azure sets up SQL).

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

Management

Fully managed by Azure – patching, updates, backups handled by service.

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

Customization

Restricted – cannot access OS or certain features; limited to options Azure exposes (instance size, certain settings).

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

Use Case

Best for migrating on-prem apps to Azure with minimal changes, needing instance-level features (Agent, cross-DB) but wanting a managed service.

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).

Maintenance Responsibility

Microsoft – Azure automatically patches OS and SQL engine (with almost no downtime).

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

Operational Control

Partial – you have instance-level admin in SQL, but no OS access and some server-level permissions are restricted by Azure.

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).

Backups

Automated: Azure performs continuous backups (point-in-time restore up to 35 days); user can initiate extra backups to storage for long-term.

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.

Scalability

Vertical: change vCore count (online resize with brief disruption); Horizontal: limited – one primary instance, can add geo-replicas for read/DR (no multiple writable instances).

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.

Performance

Very good for most cases: GP tier ~ “disk over network” latency (~5-10ms) and up to ~80k IOPS at max vCores, BC tier ~ “local SSD” latency (1-2ms) and up to ~320k IOPS at max size; Azure manages performance, but you might not reach extreme on-prem levels for edge cases.

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).

Elasticity

No auto-scale of vCores on-the-fly; you must manually scale up/down. However, you can add/remove Managed Instances in a pool (instance pools) if using that model for multi-instance elasticity, but that’s more static allocation of multiple MIs.

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.

SQL Server Version

Azure handles the version – effectively it’s the latest SQL Server engine (currently equivalent to 2019/2022). You can’t choose an older engine version, but you can set database compatibility level down to 100 (SQL 2008) for legacy T-SQL compatibility.

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.

SQL Feature Support

Yes, one of MI’s advantages over Azure SQL DB – you can do three-part naming queries across databases on the instance, and even cross-instance via linked servers (within some constraints of managed env).

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.

Cross-Database Queries

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.

Custom Software

No – you cannot RDP into the instance or install anything. CLR assemblies are allowed in SAFE mode within SQL (no external access), but you can’t install a custom extensibility framework or third-party utility on the server. Integration with other services must be done externally over network.

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.

Network Configuration

Deployed into your VNet (requires a dedicated subnet)– it gets a private IP. You manage NSGs for that subnet. By default no public endpoint (optionally can enable one). It’s like a managed appliance sitting in your network.

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).

Security

Platform-managed security: TDE on by default, backups encrypted. Azure manages OS security patches. You can use Azure AD authentication for tighter identity control. MI is deployed in your private network, adding an extra layer of isolation. It meets Azure’s compliance standards out-of-the-box (you just focus on DB-level security like user permissions).

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.

Authentication

SQL Auth and Azure Active Directory Auth supported. You set an AAD admin and then you can use AAD users/groups as logins. No direct Windows AD integration (would need to sync AD to AAD). This gives centralized cloud identity management for the MI.

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.

High Availability

Built-in: MI (Business Critical) has HA with automatic failover of the primary replica to a secondary if something happens (Azure handles it). General Purpose has Azure Service Fabric-based failover using remote storage. Either way, you get an SLA for HA without configuring clustering yourself.

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.

Disaster Recovery

Easy DR: you can configure a geo-replica MI in another region (Auto-failover Group). This will asynchronously replicate all databases. Failover can be automatic (for groups) or manual. If you choose not to have a second MI, you still have geo-redundant backups which you could restore in another region (slower recovery).

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.

Pricing

Azure SQL MI pricing is per vCore, per hour, plus storage and backup costs. An 8 vCore General Purpose instance with 4TB follows an hourly compute + per-GB-month storage model. Business Critical costs 2-3× more per vCore due to faster hardware and extra replicas. SQL licensing is included.

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.

Licensing Model

Azure SQL MI supports License-Included or Azure Hybrid Benefit, which lowers costs if you bring SQL Server licenses with Software Assurance. Reserved Capacity (1-3 years) offers discounts over pay-as-you-go.

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.

Pricing Comparison of Database Configuration

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

An 8 vCore, 4TB General Purpose Azure SQL MI in East US costs $1,700–$2,000/month ($1,300 compute + $400 storage). Hybrid Benefit can reduce compute costs by 30-40%.

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%.

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

A second 8-vCore MI (Auto-Failover Group) doubles the cost to $3,500–$4,000/month. If using Business Critical, an 8 vCore, 4TB instance costs $5,000+ per month, including 3 built-in replicas (no extra VM needed for HA).

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.