There are many options for relational database functionality in the cloud, and they serve different
SQL Server in Azure Virtual Machines gives you the ability to migrate existing databases to an IaaS infrastructure. When using SQL Server in a VM, you can either bring your own SQL Server license to Azure or use one of the preconfigured SQL Server images in the Azure preview portal. SQL Server on VM is optimized for extending existing on-premises SQL Server applications to Azure in a hybrid scenario, deploying an existing application to Azure in a migration scenario, or creating a development/test scenario. An example of the hybrid scenario is keeping secondary database replicas in Azure via Azure Virtual Network. With SQL Server in Virtual Machines, you have the full administrative rights over a dedicated SQL Server instance and a cloud-based VM. It is a perfect choice when an organization already has IT resources available to maintain the VMs. With SQL Server in Virtual Machines, you can build a highly customized system to address your application’s specific performance and availability requirements. SQL Server running in Virtual Machines is perfect when your existing and new applications require access and control to all features of a SQL Server instance, and when you want to migrate existing onpremises applications and databases to the cloud as-is. Because you do not need to change the presentation, application, and data layers, you save time and budget on redesigning your existing solution. Instead, you can focus on migrating all your solution packages to the VMs and doing some performance optimizations required by the Azure platform. You can run many other commonly used relational databases such as Oracle or IBM’s DB2 as VMs in the cloud.
SQL Database is a relational database-as-a-service that makes it possible for you to create new
applications using database services in a PaaS environment. With SQL Database, you can develop
directly on the service by using built-in features and functionality. When using SQL Database, you pay as you go, with options to scale up or out for greater power. SQL Database is optimized to reduce
overall costs to the minimum for provisioning and managing many databases because you do not
need to manage any VMs, operating system, or database software including upgrades, high
availability, and backups. SQL Database is the right solution for cloud-designed applications when developer productivity and fast time-to-market are critical. With programmatic DBA–like functionality, it is perfect for cloud architects and developers because it lowers the need for managing the underlying operating system and database. It helps developers understand and configure database-related tasks. For example, you can use the REST API and PowerShell cmdlets to automate and manage administrative operations for thousands of databases. With elastic scale in the cloud, you can easily focus on the application layer and deliver your application to the market faster.
Source of Information : Microsoft Enterprise Cloud Strategy