Azure SQL Managed Instance Pricing UK 2026

General Purpose vs Business Critical · AHB · Reserved Instances · Storage · Migration planning

All prices in GBP · UK South · Last verified April 2026

What SQL Managed Instance actually costs

SQL Managed Instance (SQL MI) is Microsoft's PaaS offering with near-100% SQL Server compatibility. Unlike Azure SQL Database, it is a full instance — not a single database. The billing model reflects that: there is no free tier, no Basic tier, and no serverless option. The minimum monthly cost starts at around £418/month (GP 4 vCore, PAYG).

Three components make up the monthly bill:

• Compute — priced per vCore per hour, split by tier (GP vs BC)
• Storage — provisioned storage above the included amount per vCore
• Backup — PITR backup storage, charged by redundancy type

General Purpose vs Business Critical

The two production tiers in SQL MI are General Purpose (GP) and Business Critical (BC). The compute rates for UK South (GBP, April 2026):

BC costs approximately twice as much as GP for the same vCore count. The premium buys: local SSD storage (vs remote GP), built-in read replicas (three copies), higher IOPS and throughput, and faster failover (<1 second vs 30 seconds for GP).

For most lift-and-shift migrations, GP is the right starting tier. Move to BC only if you have specific high-IOPS, sub-second failover, or read-scale requirements.

Azure Hybrid Benefit — the biggest lever

Azure Hybrid Benefit (AHB) lets you apply existing SQL Server licences (with active Software Assurance) to reduce the compute cost of SQL MI. The savings are significant because a large portion of the PAYG rate is the SQL Server licence fee itself.

• GP AHB: ~30% compute saving (removes Standard Edition licence cost)
• BC AHB: ~50% compute saving (removes Enterprise Edition licence cost — higher value)

If you are migrating from on-premises SQL Server with active SA, AHB should be the first optimisation you apply. The licence cost you are already paying is removed from the cloud bill entirely.

Reserved Instances — stacking discounts

SQL MI supports 1-year and 3-year Reserved Instance commitments on the compute layer. RI discounts apply on top of any AHB savings — the discounts stack multiplicatively, not additively.

Important: RI discounts apply to compute only. Storage, backup, and other charges are not reduced by a Reserved Instance.

Storage — included and extra

SQL MI includes 32 GB of storage per vCore at no extra charge. For an 8-vCore instance, that is 256 GB included. Storage above the included amount is charged monthly:

• GP extra storage: £0.0995/GB/month
• BC extra storage: £0.2167/GB/month

For a 1 TB database on GP 8 vCore: (1024 - 256) × £0.0995 = £76.44/month in extra storage. This is a meaningful cost at scale — factor included storage into your vCore sizing decisions.

SQL MI vs SQL Database — when to choose each

SQL MI is the right choice when:

• You are lifting an on-premises SQL Server with minimal code changes
• Your application uses SQL Server Agent, cross-database queries, or instance-level features
• You need CLR integration, linked servers, or distributed transactions
• Your team cannot spend time on SQL Database compatibility testing

SQL Database is the right choice when:

• You are building a new cloud-native application
• You need a serverless option (auto-pause, scale-to-zero)
• Cost is the primary driver and the workload can use Basic/Standard tiers
• You only need a single database (not a full instance)

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