Step-by-Step Guide: Creating an Azure SQL Managed Instance (Pay-As-You-Go & Free Offer)

Azure SQL Managed Instance (SQL MI) is the ideal “bridge” for organizations looking to move their on-premises SQL Server workloads to the cloud with minimal code changes. Combining the best of SQL Server with the benefits of a fully managed Platform-as-a-Service (PaaS), it offers high compatibility and automated management.

In this guide, we will walk through the process of provisioning a SQL Managed Instance via the Azure Portal, covering both the standard Pay-As-You-Go model and the Azure Free Offer.

Watch the Full Demo

For a visual walkthrough of this process, including how the automated VNet security groups are configured, check out my full video on YouTube: Create an Azure SQL Managed Instance Demo.

1. Getting Started in the Azure Portal

To begin, sign into your Azure Portal. In the top search bar, type “Azure SQL managed instances” and select the service from the results.

On the landing page, you will see two primary options:

  • SQL managed instance: The standard production-ready offering.
  • SQL managed instance – free offer: A cost-effective way to test and develop for 12 months.

2. Configuring Basic Settings

Once you select Create, you’ll need to provide the foundational details for your instance:

  • Project Details: Select your active Subscription and a Resource Group (e.g., Azure-demo).
  • Instance Details: Provide a unique name for your instance.
  • Region: Choose a region close to your users (e.g., South India).

3. Selecting Compute and Storage

This is a critical step for managing your costs and performance. Click on Configure managed instance to view your options:

Service Tiers

  • General Purpose: Ideal for most production workloads. It uses remote storage and offers a balanced cost-to-performance ratio.
  • Business Critical: Designed for high-performance applications with low latency requirements and high I/O intensity.

Hardware Configuration

You can choose between different hardware generations:

  • Standard Series (Gen5): Uses Intel Broadwell processors; a reliable and cost-effective choice.
  • Premium Series: Uses Intel Ice Lake or memory-optimized hardware, providing higher RAM per vCore (up to 13.6 GB).

Note: For a standard demo, starting with 4 vCores and 32GB of storage (often included as a free discount) is recommended to keep costs manageable.

4. Authentication and Security

Azure provides flexible ways to secure your data:

  1. SQL Authentication: Uses a traditional username and password.
  2. Microsoft Entra (formerly Azure AD) Authentication: Provides centralized identity management.
  3. Both: A hybrid approach supporting both methods.

For this setup, ensure you generate a strong password (at least 16 characters) and store it securely in a password manager.

5. Networking and Connectivity

Because SQL MI is deployed within your virtual network, Azure handles the complex networking for you:

  • Virtual Network: Azure will create a dedicated VNet and subnet specifically for your instance.
  • Connection Policy: Use Redirect for lower latency (direct client-to-node communication) or Proxy for simpler routing through a gateway.
  • Public Endpoint: Enable this only if you need to connect directly from a local machine over the internet. Otherwise, keep it disabled for maximum security.

6. Advanced Settings and Maintenance

Before finalizing, review these additional configurations:

  • Collation & Time Zone: Set these to match your existing on-premises database requirements.
  • Update Policy: Choose your maintenance window preference. You can stay “Always up to date” or opt for specific SQL Server versions like SQL Server 2022.

7. The Azure SQL MI Free Offer

If you are looking to learn or test, the Free Offer is a fantastic choice. Key differences include:

  • Duration: Free for 1 year.
  • Resources: You typically get 4 or 8 vCores on the General-Purpose tier.
  • Storage: 64GB of data storage plus 64GB of backup storage included.

To activate this, simply click Apply free offer on the Basics tab during creation.

8. Review and Deployment

After reviewing your summary where you will see the estimated monthly cost – click on Review + Create.

Important: Provisioning a SQL Managed Instance is a heavy operation. It typically takes 10 to 20 minutes for the deployment to complete. Once finished, you can find your host name and essential networking details in the Overview tab of your new resource.

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