The answer is Transparent Data Encryption, Always Encrypted, and Azure SQL Auditing. This combination is correct because Transparent Data Encryption (TDE) encrypts the entire Azure SQL database at rest, while Always Encrypted protects sensitive data in transit and at rest by ensuring encryption keys remain with the client application and are never exposed to the database engine, and Azure SQL Auditing logs all column-level access to meet PCI DSS audit requirements. On the Microsoft Cybersecurity Architect exam, this question tests your ability to layer encryption controls for compliance—a common trap is confusing Always Encrypted with TDE or forgetting that TDE alone does not protect data in transit. Remember the mnemonic “TAA” for TDE, Always Encrypted, and Auditing: TDE handles the storage, Always Encrypted secures the columns end-to-end, and Auditing tracks who touched them.
SC-100 Practice Question: Design security operations, identity, and compliance capabilities
This SC-100 practice question tests your understanding of design security operations, identity, and compliance capabilities. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
Your company is deploying a new line-of-business application in Azure that must comply with PCI DSS. The application uses Azure SQL Database. You need to design a solution to encrypt sensitive data at rest and in transit, and to audit access to sensitive columns. Which combination of Microsoft security capabilities should you recommend?
Why wrong: Dynamic Data Masking obfuscates data but does not encrypt it; firewall rules control access but not encryption.
B
Transparent Data Encryption, Always Encrypted, and Azure SQL Auditing
TDE encrypts the entire database at rest, Always Encrypted protects specific columns with client-side keys, and auditing logs access to sensitive data.
C
Azure Policy and Microsoft Defender for Cloud
Why wrong: Azure Policy ensures compliance but does not provide encryption; Defender for Cloud assesses vulnerabilities but does not encrypt data.
D
Azure Storage Service Encryption and Azure Key Vault
Why wrong: Storage Service Encryption applies to Azure Storage, not Azure SQL Database.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Transparent Data Encryption, Always Encrypted, and Azure SQL Auditing
Option B is correct because Transparent Data Encryption (TDE) encrypts the SQL database at rest, Always Encrypted protects sensitive columns in transit and at rest by ensuring encryption keys are never exposed to the database engine, and Azure SQL Auditing logs all access to sensitive columns for compliance with PCI DSS requirements.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Dynamic Data Masking and Azure SQL Firewall rules
Why it's wrong here
Dynamic Data Masking obfuscates data but does not encrypt it; firewall rules control access but not encryption.
✓
Transparent Data Encryption, Always Encrypted, and Azure SQL Auditing
Why this is correct
TDE encrypts the entire database at rest, Always Encrypted protects specific columns with client-side keys, and auditing logs access to sensitive data.
Related concept
Read the scenario before looking for a memorised answer.
✗
Azure Policy and Microsoft Defender for Cloud
Why it's wrong here
Azure Policy ensures compliance but does not provide encryption; Defender for Cloud assesses vulnerabilities but does not encrypt data.
✗
Azure Storage Service Encryption and Azure Key Vault
Why it's wrong here
Storage Service Encryption applies to Azure Storage, not Azure SQL Database.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse Dynamic Data Masking with encryption, but masking does not protect data at rest or in transit and can be bypassed by privileged users, whereas Always Encrypted and TDE provide true encryption required by PCI DSS.
Detailed technical explanation
How to think about this question
Always Encrypted uses client-side encryption where the database engine never sees the plaintext data; it relies on column encryption keys (CEKs) protected by column master keys (CMKs) stored in Azure Key Vault or Windows Certificate Store. TDE uses a database encryption key (DEK) stored in the database boot record, protected by a server certificate or an asymmetric key in Azure Key Vault, and encrypts the entire database at the page level. Azure SQL Auditing writes audit logs to Azure Storage or Log Analytics, capturing all SELECT, INSERT, UPDATE, and DELETE operations on encrypted columns, which is essential for PCI DSS Requirement 10.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this SC-100 question in full detail.
Design security operations, identity, and compliance capabilities — This question tests Design security operations, identity, and compliance capabilities — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Transparent Data Encryption, Always Encrypted, and Azure SQL Auditing — Option B is correct because Transparent Data Encryption (TDE) encrypts the SQL database at rest, Always Encrypted protects sensitive columns in transit and at rest by ensuring encryption keys are never exposed to the database engine, and Azure SQL Auditing logs all access to sensitive columns for compliance with PCI DSS requirements.
What should I do if I get this SC-100 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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