Azure Managed Applications do not currently support in-place upgrades directly via the Marketplace.
Implement an Update Mechanism in Your Solution
Design your solution (in the ARM templates or internal app logic) to support self-update
Include an Azure Function, Logic App, or custom script inside the managed app to handle incremental updates
Let customers trigger an update from a custom UI, like a portal extension or an exposed endpoint.
Reference: For a sample implementation, refer to the Azure Managed Application Updating Sample on GitHub.
Reference link:
https://github.com/Azure-Samples/ama-update-sample
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