What is the difference between Azure SQL Database and Azure SQL Managed Instance? Azure SQL Database: Database-as-a-Service (DBaaS): Azure SQL Database is a fully managed database service that offers a Platform-as-a-Service (PaaS) deployment model. It abstracts away most of the infrastructure management tasks, allowing developers to focus on their databases and applications. Scalability and Isolation: Azure SQL Database provides multiple service tiers with varying levels of performance and scalability. It is suitable for small to large databases and can scale up or down based on workload demands. Azure SQL Managed Instance: Platform-as-a-Service (PaaS) with SQL Server Compatibility: Azure SQL Managed Instance offers a more comprehensive SQL Server compatibility compared to Azure SQL Database. It provides a near 100% compatibility with the latest version of SQL Server, making it easier to migrate existing on-premises SQL Server workloads to the cloud.