Managed instance is tailored for on-premises workloads that are planning to move to the cloud. It introduces a [new purchasing model](sql-database-service-tiers-vcore.md) that provides greater flexibility in selecting the right level of resources for your workloads. In the on-premises world, you are probably accustomed to sizing these workloads by using physical cores, memory and IO bandwidth. The purchasing model for managed instance is based upon virtual cores, or “vCores,” with additional storage and IO available separately. The vCore model is a simpler way to understand your compute requirements in the cloud versus what you use on-premises today. This new model enables you to right-size your destination environment in the cloud. Some general guidelines that might help you to choose the right service tier and characteristics are described here:
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