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Looking at SQL Server maximum capacity limits on here: http://msdn.microsoft.com/en-us/library/ms143432(v=sql.120).aspx

Database size can be as big as 524,272 terabytes.

Here, you could see VM size limits on Azure: http://msdn.microsoft.com/en-us/library/windowsazure/dn197896.aspx

If you look at the table on the second page, the maximum number of data disks that could be attached is 16 (1 TB each). Does that mean on Azure, SQL Server cannot house more than 16 TBs and anything more than that would require a new VM?

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How much capacity do you need? Let's start there. –  Jon Seigel Feb 5 at 18:41
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up vote 2 down vote accepted

Yes, all the storage that you can attach to a single Azure VM is 16TB so that's the practical limit on storage for a single server.

Now that said, there isn't a problem that can't be worked around.

If you needed say a 100TB database, you could spin up 7 VMs, attach 16TB of storage to each one. Then spin up an 8th VM which has SQL Server on it, then create the database using SMB network shares on the 7 other machines storing the database on the 7 remote machines.

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Note: you can go around 16TB limitation by store your database files directly in Azure Storage: http://msdn.microsoft.com/en-us/library/dn385720.aspx. This works starting from SQL Server 2014

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