Azure MCP Server: Functions and App Service

Azure gives you two realistic hosting paths for an MCP server: Functions for bursty, stateless tool calls, or App Service for a persistent process that can hold SSE connections open.

Functions: Best for Stateless Tools

An HTTP-triggered Function handling tools/call requests scales to zero and costs nothing at idle — a good fit if your tools are quick, independent lookups.

App Service: Best for Persistent Connections

If your server needs to hold SSE streams open or maintain in-memory session state across tool calls, App Service's always-on instance avoids the cold-start and connection-drop issues Functions introduce.