Performing an in-place upgrade on Windows Azure to change your service definition file it’s not possible unless you stop the service, upgrade and then start it again. Otherwise you can do a VIP Swap. VIP stands for Virtual IP and VIP swaps can be either done by the Developer portal or using the Service Management API by calling “Swap Deployment” method.

If you use VIP Swap and as long as you the endpoints between the old and new service definition are identical, the upgrade process is seamless and pretty straightforward without any service interruption. But if, for example, you introduce a new endpoint or delete and older one, then this process is not possible and you have to stop, upgrade, start.

So, how can you perform this operation from the Developer portal. Simply logon to your account, go to Summary page, open your target project, open the service and then upload the new service definition file on Staging. Now, if you click Run on Staging, both versions of your service will work just fine (one in Production, one in Staging). When you hit the Upgrade button (the one with arrows in the middle) then Azure will upgrade your service from Staging to Production, changing the service definition file and complete the process just fine thus performing a VIP swap in the background.

You can perform the same operation using Service Management API and “Swap Deployment” method as I mentioned before.

For more information about VIP Swap using Service Management API, go here –> MSDN, Azure Service Management API, VIP Swap

PK.