You need to execute custom C# code in response to events delivered by Azure Event Grid. The executed code must be able to access the private IP address of an SQL Server instance running on an Azure VM, and costs should be minimized. Which hosting option should you include?

Azure Functions in the Premium plan is the correct choice because it offers virtual network (VNet) integration, allowing the function to access resources within a private network, such as the SQL Server instance on an Azure VM's private IP. It also provides pre-warmed instances and eliminates cold starts, which is beneficial for event-driven scenarios like Event Grid. While Azure Functions in the Consumption plan is cost-effective, it lacks VNet integration. Azure Logic Apps in the Consumption plan also lacks VNet integration and is primarily for workflow orchestration, not custom code execution. Azure Logic Apps in the integrated service environment (ISE) offers VNet integration but is generally more expensive and designed for complex enterprise integrations, making it overkill for this specific requirement of executing custom C code.