Azure vs AWS Cost Comparison for Small Businesses

Azure and AWS publish list prices for equivalent services, and most comparisons stop there. The published price comparison is misleading for real purchasing decisions because it ignores the factors that actually determine which is cheaper for a specific organisation: existing Microsoft licensing, discount programmes, egress patterns, and the operational cost of running each platform.

This guide covers where the genuine cost differences lie, not just the headline compute prices.

Compute: broadly comparable

For general-purpose virtual machines, Azure and AWS are priced at broadly similar levels for equivalent compute capacity. An Azure Standard_D4s_v5 (4 vCPU, 16 GB RAM) and an AWS m7i.xlarge (4 vCPU, 16 GB RAM) have similar on-demand pricing in their respective European regions.

The real savings on compute come from commitments: - Azure Reserved Instances (1-year or 3-year): 30-40% (1yr) or 60-70% (3yr) off on-demand for VMs - AWS Reserved Instances or Savings Plans: similar percentage savings for equivalent commitments

Both platforms offer spot/preemptible VMs at 60-90% discount for interruptible workloads. The mechanics differ slightly (AWS Spot Instances use a spot price and capacity model; Azure Spot VMs use an eviction policy and capacity model) but the economics are comparable.

The primary compute cost difference is Azure Hybrid Benefit, which has no AWS equivalent. If your organisation has existing Windows Server or SQL Server licences with Software Assurance, Azure Hybrid Benefit applies them to Azure VMs. This saves approximately 40% on Windows compute costs and 55-70% on SQL Server licences. For organisations running significant Windows workloads, this is the single largest cost differentiator in Azure's favour.

Database: Azure has an advantage for SQL Server

Azure SQL Database and AWS RDS SQL Server both run SQL Server. Azure SQL Database with Hybrid Benefit, using existing SQL Server licences, is typically 40-50% cheaper than AWS RDS SQL Server for equivalent performance.

For PostgreSQL and MySQL, pricing is more comparable. AWS Aurora for MySQL and PostgreSQL is competitively priced but has no equivalent to Azure Hybrid Benefit.

For a new workload where database engine choice is flexible, this cost difference does not matter. For a workload migrating an existing SQL Server database where licences already exist, Azure is materially cheaper.

Data egress: similar rates, different free tiers

Both Azure and AWS charge for outbound data transfer to the internet. Published rates are very similar (roughly £0.07/GB in UK regions for AWS, slightly lower for Azure at higher volumes). Both offer the first 100 GB/month free.

The difference is cross-region transfer. AWS charges for data transferred between AWS Availability Zones within the same region (currently $0.01/GB per direction). Azure also charges for cross-AZ transfer (the rate is in flux and comparable to AWS). Cross-region transfer is charged on both platforms at roughly £0.02-0.07/GB depending on region pairs.

For architectures with significant cross-AZ communication (distributed applications with many inter-service calls), the cross-AZ transfer charges accumulate on both platforms. Design to minimise this rather than expecting one cloud to be significantly cheaper than the other.

Networking: Azure Hybrid Benefit again for existing ExpressRoute customers

Azure ExpressRoute pricing is similar to AWS Direct Connect for comparable bandwidth. Both offer 1 Gbps and 10 Gbps dedicated connectivity at similar monthly circuit costs.

For organisations already running Azure and paying for ExpressRoute, adding Azure services costs less in network terms than adding AWS services (which would require a separate Direct Connect circuit). This is a mild cost advantage for organisations already embedded in Azure rather than starting fresh.

Storage: similar for hot data, Azure cheaper for cold

Azure Blob Storage and AWS S3 have nearly identical pricing for Hot tier (frequently accessed) data. Both are approximately £0.018-0.020/GB/month.

For cold and archive storage, Azure Archive is slightly cheaper than AWS Glacier Deep Archive for the storage cost, though rehydration costs and times differ. For large-scale archival workloads, the storage cost difference is small but the pricing structure differences (how you pay for rehydration) are worth understanding before committing.

Where Microsoft 365 and Entra ID integration matters

For businesses already using Microsoft 365, Azure provides identity integration (Entra ID/SSO), monitoring integration (Microsoft Defender for Cloud, Sentinel), and developer tooling integration (Azure DevOps, Visual Studio) that AWS does not match natively. The cost of replicating these integrations on AWS adds up.

If your organisation is a Microsoft shop (Office 365, Active Directory, Windows), the integration benefits of Azure reduce the operational cost of running the platform. Quantifying this is difficult but it is real and should factor into a total cost of ownership comparison.

The honest answer

For a small business starting from zero, with no existing Microsoft licences and a flexible technology stack, Azure and AWS are priced comparably. The choice should be driven by the team's expertise, the fit of the managed services to the technical requirements, and the support model.

For a small business with existing Microsoft licences (Windows Server, SQL Server), Azure Hybrid Benefit makes Azure materially cheaper for those workloads.

For a small business already embedded in AWS, the migration cost and operational disruption of moving to Azure must be weighed against any potential cost savings. For most businesses in this position, the right answer is optimising the existing platform rather than migrating.

The Total Cost of Ownership conversation includes the platform cost, the licensing cost, the operational support cost, and the migration cost. For regulated businesses in the UK where the Microsoft ecosystem (Entra ID, Defender, Purview) is already part of the compliance and security architecture, Azure typically wins that full TCO comparison.

Where Critical Cloud comes in

We operate Azure for regulated and technology-led SMBs across the UK, Ireland, and EMEA. If you are evaluating Azure vs AWS and want an honest commercial analysis based on your specific licence position and workload profile rather than a published price comparison, see how Critical Support works.