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Learn how to configure secure connections to Azure-managed databases using Managed Identity authentication and best practices for production deployments.

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Azure SQL with Managed Identity Authentication

This guide demonstrates the most secure method for connecting to Azure SQL Database and Azure SQL Managed Instance using VM-attached managed identities, eliminating the need to manage credentials or connection strings. For alternative authentication methods and detailed configuration options, refer to:

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Step 1: Create Azure VM with System-Assigned Managed Identity

  1. Create VM with Managed Identity
    • Go to Azure Portal → Virtual Machines
    • Click Create → Azure virtual machine
    • Configure VM settings as needed
    • Under Management tab:
      • Enable System assigned managed identity: Set to On
    • Complete VM creation
    Security Best Practice: System-assigned managed identities are automatically managed by Azure and tied to the VM lifecycle. This eliminates credential management and reduces security risks. Learn more: Managed identity best practices
  2. Deploy Bytebase on the VM Deploy Bytebase on your Azure VM. The VM’s managed identity is automatically available - no credential configuration needed.

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Step 2: Configure Azure SQL Database

  1. Enable Microsoft Entra Authentication
  2. Grant Database Access to Managed Identity
    • Note your VM’s managed identity name (same as VM name)
    • Connect to Azure SQL using the Entra admin account
    • Run the following for each database:
    -- Create user for the VM's managed identity
CREATE USER [your-vm-name] FROM EXTERNAL PROVIDER;

-- Grant appropriate permissions (adjust as needed)
ALTER ROLE db_datareader ADD MEMBER [your-vm-name];
ALTER ROLE db_datawriter ADD MEMBER [your-vm-name];
ALTER ROLE db_ddladmin ADD MEMBER [your-vm-name];

-- For full database management in Bytebase:
ALTER ROLE db_owner ADD MEMBER [your-vm-name];
    Production Best Practice: Follow the principle of least privilege. Grant only the minimum permissions required for your use case. See Azure SQL Database permissions.

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Step 3: Connect from Bytebase

  1. Access Bytebase on your VM (typically http://localhost:5678)
  2. Click New Instance
  3. Configure the connection:
    • Host: Your Azure SQL server name (e.g., yourserver.database.windows.net)
    • Port: 1433
    • Database: Target database name
    • Authentication: Select Azure Default Credential
  4. Test and save the connection
Bytebase automatically uses the VM’s managed identity through Azure’s Instance Metadata Service (IMDS) for authentication.
Advantages of this approach:
  • No passwords or connection strings to manage
  • Automatic credential rotation handled by Azure
  • Enhanced security through Azure RBAC
  • Simplified compliance and auditing
For troubleshooting, see Troubleshoot managed identity authentication.

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Alternative: User-Assigned Managed Identity

For more granular control or cross-resource scenarios:
  1. Create User-Assigned Managed Identity
    • Go to Managed Identities
    • Create a new identity with a descriptive name
    • Assign it to your VM under Settings → Identity → User assigned
  2. Configure Database Access 
    CREATE USER [managed-identity-name] FROM EXTERNAL PROVIDER;
ALTER ROLE db_owner ADD MEMBER [managed-identity-name];
  3. Set Environment Variable (if using multiple identities) 
    export AZURE_CLIENT_ID=<managed-identity-client-id>
Reference: User-assigned managed identities

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Azure Database for PostgreSQL

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Entra ID Authentication

  1. Enable Entra Authentication
    • In Azure Portal, navigate to your PostgreSQL server
    • Go to Authentication → Active Directory admin
    • Set an Entra admin and save
  2. Create Database User Connect as the Entra admin and run: 
    -- For system-assigned managed identity
CREATE ROLE "your-vm-name" LOGIN;
GRANT ALL PRIVILEGES ON DATABASE yourdb TO "your-vm-name";
  3. Connect from Bytebase
    • Host: Your PostgreSQL server name
    • Port: 5432
    • Username: VM name (for system-assigned identity)
    • Authentication: Select Azure Default Credential
Reference: Azure Database for PostgreSQL Entra authentication

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Azure Database for MySQL

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Entra ID Authentication

  1. Enable Entra Authentication
    • Navigate to your MySQL server in Azure Portal
    • Go to Active Directory admin
    • Set an Entra admin
  2. Create Database User 
    CREATE AADUSER 'your-vm-name';
GRANT ALL PRIVILEGES ON *.* TO 'your-vm-name';
  3. Connect from Bytebase
    • Host: Your MySQL server name
    • Port: 3306
    • Username: VM name
    • Authentication: Select Azure Default Credential
Reference: Azure Database for MySQL Entra authentication

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Private Endpoints and VNet Integration

For enhanced security using private endpoints:

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Configure Private Endpoint

  1. Create Private Endpoint
    • Navigate to your database resource
    • Go to Networking → Private endpoint connections
    • Click + Private endpoint
    • Select your VNet and subnet
    • Complete the configuration
  2. Update DNS
    • Use Azure Private DNS zones for automatic resolution
    • Or manually configure DNS for the private endpoint
  3. Connect from Bytebase
    • Deploy Bytebase in the same VNet or peered VNet
    • Use the private endpoint DNS name for connection
Reference: Private endpoints for Azure SQL

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Best Practices

  1. Use Managed Identities: Eliminate password management overhead
  2. Enable Private Endpoints: Restrict database access to your VNet
  3. Follow Least Privilege: Grant minimal required permissions
  4. Enable Auditing: Use Azure SQL Auditing for compliance
  5. Use Azure Key Vault: For scenarios requiring password storage

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Troubleshooting

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Authentication Failed

  • Verify managed identity is properly assigned to VM
  • Check database user was created with FROM EXTERNAL PROVIDER
  • Ensure Entra authentication is enabled on the database

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Connection Timeout

  • Verify network security group rules
  • Check VNet and subnet configuration
  • Ensure database firewall rules allow your IP

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Private Endpoint Issues

  • Verify DNS resolution for private endpoint
  • Check VNet peering if using multiple VNets
  • Ensure network security allows traffic

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Managed Identity Not Working

  • Restart VM after enabling managed identity
  • Check Azure RBAC assignments
  • Verify IMDS endpoint is accessible from VM