Hello Buchammagarivikram Reddy •,
Issue: The user encountered a "GatewayTimeout" error while creating an Azure SQL connection in a consumption-based Logic App using SQL Server authentication, even though the SQL database was hosted in Azure (not on-premises). This led to confusion about whether a data gateway was required.
Root Cause: Consumption-based Logic Apps require a data gateway to connect to SQL Managed Instance (SQL MI), even if it's hosted in Azure, due to the underlying network restrictions and integration runtime behavior.
Solution: To resolve this, a data gateway server was deployed in the same VNet as the SQL MI. Once in place, the Logic App was able to successfully establish connectivity to the SQL MI. This solution follows Microsoft’s recommended architecture.
Reference: Connect to SQL Databases from Workflows - Azure Logic Apps | Microsoft Learn