Sasha Nosov takes us through Azure Arc deployment options for SQL Server:
As you can see, both on-Azure and off-Azure options offer you a choice between IaaS and PaaS. The IaaS category targets the applications that cannot be changed because of the SQL version dependency, ISV certification or simply because the lack of in-house expertise to modernize. The PaaS category targets the applications that will benefit from modernization by leveraging the latest SQL features, gaining a better SLA and reducing the management complexity.
Click through for a graphic, as well as further clarification on each item.