Azure SQL Database is designed as a single database service, while SQL Managed Instance provides a managed instance environment that can host multiple databases, similar to an on-premises SQL Server instance.
Azure SQL Database typically uses public endpoints, while SQL Managed Instance is deployed inside a customer's virtual network, allowing private IP connectivity.
SQL Managed Instance supports cross-database queries similar to on-premises SQL Server, while Azure SQL Database does not support cross-database queries natively.
Both Azure SQL Database and SQL Managed Instance support Azure Active Directory authentication and Transparent Data Encryption to protect data at rest.
SQL Managed Instance is designed to provide near 100% compatibility with on-premises SQL Server, including instance-level features, making it ideal for migrations requiring minimal application changes.