Managed instance is a new deployment option of Azure SQL Database, providing near 100% compatibility with the latest SQL Server on-premises (Enterprise Edition) Database Engine, providing a native virtual network (VNet) implementation that addresses common security concerns, and a business model favorable for on-premises SQL Server customers. The managed instance deployment model allows existing SQL Server customers to lift and shift their on-premises applications to the cloud with minimal application and database changes.
References:
https://docs.microsoft.com/en-us/azure/sql-database/sql-database-managed-instance