We had a customer who called us for help because their backup to URL no longer worked after they implemented proxy server for their organization. They continued to face issues even after they configured backuptoURL.exe.config file.
Customer also pointed out that using azCopy, he was able to copy files from the SQL machine to the same blob storage. The account used to do azCopy was different from the SQL Server startup account. So we had customer start SQL Server with the account used for azCopy. Then the backup url was successful.
It turned out that they didn’t configure proxy setting for the service account (they only configured proxy setting for the interactive user) to point to the proxy server. After logging onto the SQL machine with the service account and configuring the proxy setting via IE, then their backup started to work with the service account.
Below are the a couple of screenshots on how you configure proxy server for an individual users
Jack Li |Senior Escalation Engineer | Microsoft SQL Server