Richard recently blogged about getting the Red Gate Labs website onto Azure; it's been running awhile now and, as Richard makes sure the cogs are all turning, I've been trying to track the cost.
We decided to launch on Windows Azure as both an exercise in using Azure and also getting to grips with hosting stuff in the cloud. If you have an MSDN subscription then you're eligible for an offer which looks pretty great:

What the offer amounted to was a small compute instance, a bunch of storage options, and some of those cool AppFabric services to have a play around with, all for free!
We quickly found out two things. The first is that the SLA of 99.95% uptime isn't enforced unless you have two web roles (instances) deployed for your application. We have two web facing roles but they're both doing different things, so I guess we don't get the 99.95% uptime cover. I haven't yet found out what our expected minimum uptime should be (if any), but enterprise-level uptime isn't important for this site.
The second, much more interesting thing we gained insight to was the question of "how much this was going to cost us". We have one small free compute instance for a year, so that means the second one is billable. As for storage, we went with a web-sized database on SQL Azure, and all interactions with it are free of charge. We have a few blobs in non-relational storage as well, and are charged per transaction for these, but we have 1 million transactions free per month on the offer, so that's fine. With all fo that in mind the comparative costs are as follows :
Cost per month (with offer) - $86.4
1 small instance charged at $0.12 p/h = $86.40
However, without the offer the cost per month looks more like this.
Cost per month (without offer) - $183.07
2 small instances charged at $0.12 p/h = $172.80
1 web (1Gb) SQL Azure instance per month = $9.99
1 Gb Azure storage / ~200k transactions = $0.28
That's a significant difference, and the MSDN offer is only good for a year, max (with a refresh after 6 months). Without going any more deeply into the figures here (although I’m happy to discuss the details in more depth if anyone asks), this seems a touch on the expensive side. So, the Big Question is whether the time that Azure supposedly saves us from the management of low level VM issues is worth the ultimate cost per month, versus a simpler (and cheaper) host like EC2 or Rackspace? We also still need to discover what the trade-offs are with the Platform as a Service (PaaS) choice like Azure, what flexibility are we lacking?
If you're running an Azure application for anything I'd love to hear your views on pricing.