Transparent Data Encryption (TDE) in Azure SQL: Protecting Data at Rest 

Image Credit: Microsoft

 

As data security continues to take center stage, organizations using Azure SQL Database need robust protection to guard against unauthorized access. One of the most effective ways to secure data at rest is through Transparent Data Encryption (TDE). 

TDE helps ensure your data is protected — even if someone gains access to your underlying storage. This article breaks down what TDE is, how it works in Azure SQL, and how to implement and manage it effectively. 

What is Transparent Data Encryption (TDE)? 

Transparent Data Encryption (TDE) is a feature in Azure SQL Database and SQL Server that encrypts the storage of an entire database — including data files, log files, and backups — without requiring changes to application code. 

It’s called “transparent” because: 

• The encryption and decryption process happens automatically. 

• Applications and users don’t need to modify their access patterns. 

 

Why Use TDE? 

• ✅ Protect data at rest (stored on disk or in backups) 

• ✅ Helps meet compliance requirements (HIPAA, GDPR, ISO 27001) 

• ✅ No changes needed to applications 

• ✅ Built-in with Azure SQL — enabled by default 

 

How Does TDE Work? 

TDE uses encryption keys to encrypt/decrypt data: 

Key Components: 

Component	Description
Database Encryption Key (DEK)	A symmetric key used to encrypt the database
TDE Protector	An asymmetric key used to protect the DEK
Azure Key Vault (optional)	A managed HSM or software-based key store

In Azure SQL, the DEK is encrypted using a TDE protector stored in Azure Key Vault (customer-managed key) or Microsoft-managed keys by default. 

 

TDE Options in Azure SQL 

Option	Description
Service-managed key (default)	Azure manages the TDE protector key
Customer-managed key (CMK)	You manage and rotate keys using Azure Key Vault

 

How to Enable or Configure TDE 

Option 1: Using Azure Portal 

• Navigate to your Azure SQL Database or SQL Managed Instance 
• Under Security, go to Transparent Data Encryption 
• TDE is enabled by default 
• For customer-managed keys: 
• Link a Key Vault 
• Select the key you created 
• Assign appropriate permissions 

Option 2: Using PowerShell 

Set-AzSqlDatabaseTransparentDataEncryption ` 
  -ResourceGroupName "myResourceGroup" ` 
  -ServerName "mySqlServer" ` 
  -DatabaseName "myDatabase" ` 
  -State "Enabled" 
 

 

Customer-Managed Key (CMK) - BYOK Scenario 

If your organization needs more control over encryption keys: 

• Create a key in Azure Key Vault 

• Set up access policies for Azure SQL 

• Use the CMK as your TDE protector 

Benefits of CMK: 

• Bring Your Own Key (BYOK) 

• Control key rotation and revocation 

• Enhanced compliance and auditing 

 

Auditing & Monitoring TDE 

• Use Azure Monitor and Azure Policy to ensure TDE is always enabled 

• Set alerts for unauthorized key access or key expiration 

• Audit TDE settings via Azure Security Center 

 

Important Considerations 

• TDE only encrypts data at rest — for in-transit protection, use TLS encryption. 

• TDE is not a substitute for Row-Level Security, Dynamic Data Masking, or Always Encrypted. 

• Backups of a TDE-enabled database are also encrypted automatically. 

 

TDE on Azure SQL Managed Instance & SQL Server on Azure VM 

• Fully supported on both 

• On SQL Server in IaaS VMs, TDE is not enabled by default — you must configure it manually 

• You can use EKM (Extensible Key Management) provider to integrate with Key Vault 

 

Summary 

Feature	Description
Purpose	Encrypt data at rest in Azure SQL
Default Status	Enabled by default (service-managed key)
Optional Feature	Use Customer-Managed Key via Key Vault
Impact on Apps	Transparent (no code change)
Performance Overhead	Minimal (typically < 5%)
Compliance Support	Helps meet security standards and regulations

 

 

Final Thoughts 

Transparent Data Encryption is one of the easiest and most effective tools to secure data in Azure SQL. Whether you're handling financial records, healthcare data, or personal customer information, TDE ensures that data stored in your databases is always encrypted, always protected. 

To enhance your security posture further, consider pairing TDE with: 

• Dynamic Data Masking 

• Always Encrypted 

• Azure Defender for SQL 

 

Additonal Resources 

• Microsoft Docs – TDE in Azure SQL 

• Azure Key Vault Documentation 

Want help setting up TDE or managing your own encryption keys? 
Contact Cloud360 for expert Azure security consulting and implementation support.