Hi Jamie Jamieson •,
Welcome to Microsoft Q&A forum and thanks for using Azure Services.
As I understand, you want to know why Azure SQL database degrades at at the same time each day.
We are sorry about the inconvenience you are facing.
These kind of occasional cause of transient errors is when the Azure system quickly shifts hardware resources to better load-balance various workloads. Most of these reconfiguration events finish in less than 60 seconds. During this reconfiguration time span, you might have issues with connecting to your database in SQL Database. Applications that connect to your database should be built to expect these transient errors. To handle them, implement retry logic in their code instead of surfacing them to users as application errors.
If your client program uses ADO.NET, your program is told about the transient error by the throw of SqlException.
We recommend you to set up retry logic as mentioned here:
Hope this helps.
If not, I will recommend you to raise support case for deeper investigation if this problem persists in your case
and in case if you don't have a support plan, do let us know here so that we can check on other options to unblock you.