Azure migration cost is the number every UK business owner asks for first and the number almost nobody publishes honestly. Search for it and you will find calculators that price virtual machines and stop, vendor pages that quote a headline discount without saying what it applies to, and partner blogs that describe the benefits at length and the Azure migration cost not at all. Meanwhile the finance director wants one figure to put in a spreadsheet, for a business with forty-eight staff, three ageing hypervisor hosts and no in-house platform engineer.
This guide builds that figure from the bottom up for exactly that business. Every rate below was pulled from Microsoft’s own public Retail Prices API for the UK South region, in pounds sterling, on 20 August 2026 — no currency conversion, no estimate, no “typically around”. Where a price could not be verified from a primary source, we say so rather than guess. The result is a full three-year model, a line-by-line breakdown of what actually appears on the invoice, and a conclusion that may not be the one you expect.
If you want the wider platform comparison rather than the Azure-only view, our companion piece on cloud migration pricing across Azure, AWS and hybrid covers both hyperscalers, and our earlier cloud migration cost guide covers the generic budget and timeline. This one is narrower and deeper: one platform, one realistic estate, one invoice.
Table of contents
- What “Azure migration cost” actually means
- The 48-person estate behind every Azure migration cost figure
- Azure migration cost line one: fourteen machines at UK South list
- The burstable trap that quietly inflates your Azure migration cost
- Reservations: the biggest single lever on Azure migration cost
- The Windows tax missing from your Azure migration cost estimate
- Azure Hybrid Benefit: the biggest Azure migration cost lever you own
- Azure migration cost line two: storage you pay for but never fill
- Premium against standard SSD, and what it does to Azure migration cost
- The platform floor is half your Azure migration cost
- Firewall, Bastion and gateway: three calls that set your Azure migration cost
- Backup and replication: the Azure migration cost of being able to recover
- Egress: the Azure migration cost scare story that is not one
- Five Azure migration cost scenarios, side by side
- What the migration project adds to your Azure migration cost
- Azure Migrate is free for one hundred and eighty days
- Year one, year three and year five Azure migration cost
- The Azure migration cost of staying exactly where you are
- The single assumption that decides it: 0.251 of a person
- Twelve questions to ask before you sign an Azure migration cost quote
- Frequently asked questions about Azure migration cost
- References
What "Azure migration cost" actually means
Ask three suppliers for an Azure migration cost and you will get three numbers that differ by a factor of five, and all three will be defensible. They are answering different questions.
The three Azure migration cost numbers hiding behind one question
The first Azure migration cost number is the project fee: what somebody charges to move the workloads. The second is the run rate: what Microsoft bills you every month once the servers are running in UK South. The third is the total cost of ownership: the Azure migration cost run rate plus the project plus everything the project quietly makes you buy — new backup, new licences, new monitoring, new support hours.
Most Azure migration cost quotes answer the first question. Most disappointment comes from the second and third. A partner can win the work on a £30,000 project fee and be entirely truthful, while the platform underneath then costs more every single year than the fee did once.
Why the run rate is the Azure migration cost that matters
A migration project is a one-off. The Azure migration cost run rate compounds. Over five years, the Azure migration cost that determines whether the decision was good is the monthly invoice, not the fee — and the monthly invoice is the part nobody models before signing.
That is the gap this article closes. We are going to price the Azure migration cost first and the project second, because that is the order in which the money actually leaves the building.
The honest framing
There is no such thing as a generic Azure migration cost. There is only the Azure migration cost of a specific estate, mapped to specific machine sizes, with specific licensing decisions applied. Change the estate and every Azure migration cost figure moves. What transfers between businesses is not the total — it is the shape of the Azure migration cost, and the traps that distort it.
The 48-person estate behind every Azure migration cost figure
To make the arithmetic checkable, everything below prices one fictional but entirely ordinary business: a building-services engineering consultancy in Bristol with forty-eight employees, thirty-nine of them fee-earning.
What they run today
Three Hyper-V hosts bought in 2021, out of warranty in eleven months. Fourteen virtual machines. About 6.2 TB of live data, mostly project drawings and a document store. One part-time internal IT coordinator and a break-fix supplier on call. This is not an unusual shape — of the 5.7 million UK private sector businesses recorded at the start of 2025, 38,435 sat in the 50-249 employee band and 5.64 million below it, so the estate below is closer to the national norm than any enterprise reference architecture.
The fourteen machines, mapped to Azure sizes
| Machine | Role | Azure size | vCPU / RAM | OS |
|---|---|---|---|---|
| DC-01 | Domain controller | B2ms | 2 / 8 GiB | Windows |
| DC-02 | Domain controller | B2ms | 2 / 8 GiB | Windows |
| PRINT-01 | Print and scan services | B2ms | 2 / 8 GiB | Windows |
| MON-01 | Monitoring and jump host | B2ms | 2 / 8 GiB | Linux |
| APP-01 | Line-of-business application | D2s v5 | 2 / 8 GiB | Windows |
| WEB-01 | Intranet | D2s v5 | 2 / 8 GiB | Linux |
| RPT-01 | Reporting | D2s v5 | 2 / 8 GiB | Linux |
| BUILD-01 | Integration and scripts | D2s v5 | 2 / 8 GiB | Linux |
| TEST-01 | Test | D2s v5 | 2 / 8 GiB | Linux |
| TEST-02 | Test | D2s v5 | 2 / 8 GiB | Linux |
| FILE-01 | File server | D4s v5 | 4 / 16 GiB | Windows |
| RDS-01 | Remote desktop host | D4s v5 | 4 / 16 GiB | Windows |
| CAD-01 | Project and drawing server | D8s v5 | 8 / 32 GiB | Windows |
| SQL-01 | SQL Server | E4s v5 | 4 / 32 GiB | Windows |
Forty vCPU in total, of which twenty-eight are Windows. Hold on to that second number — it decides more of the final Azure migration cost than the machine sizes do.
Why the mapping matters more than the sizing
The instinct on a first migration is to match what the physical hosts had. That is nearly always wrong: on-premises servers are sized for the worst hour of the worst week of a five-year life, and Azure bills you for that sizing every hour of every day. Good IT asset management records — what each box actually does, and how hard it works at 3pm on a Tuesday — will move the Azure migration cost more than any negotiation. Without them, the sizing exercise is guesswork sold as digital transformation.
Azure migration cost line one: fourteen machines at UK South list
Start with the simplest possible answer: lift the fourteen machines into UK South, pay list price, commit to nothing.
The published rates, in pounds
These are the actual pay-as-you-go rates returned by Microsoft’s price feed for UK South on 20 August 2026. The Linux column is the compute charge. The Windows column includes the operating system licence.
| Size | Linux /hr | Windows /hr | 1-yr reserved (term) | 3-yr reserved (term) |
|---|---|---|---|---|
| B2ms | £0.0710 | £0.0768 | not offered | not offered |
| B4ms | £0.1422 | £0.1543 | not offered | not offered |
| B2s v2 | £0.0710 | £0.0783 | £367.23 | £709.64 |
| B2as v2 | £0.0640 | £0.0709 | £330.36 | £638.90 |
| D2s v5 | £0.0835 | £0.1528 | £451.52 | £866.92 |
| D4s v5 | £0.1671 | £0.3055 | £903.04 | £1,733.83 |
| D8s v5 | £0.3341 | £0.6111 | £1,806.07 | £3,468.41 |
| E4s v5 | £0.2227 | £0.3612 | £1,204.05 | £2,312.53 |
A trap in the reservation column
Read that reservation column carefully. Microsoft’s feed reports reservation rows with a unit of measure of “1 Hour”, but the price is the total for the whole term, not an hourly rate. A three-year D4s v5 reservation costs £1,733.83 once, covering thirty-six months — £577.94 a year, not £1,733.83 a year. Getting that wrong inflates a model threefold, and it is the single most common error we see in spreadsheets clients bring us.
The naive lift-and-shift Azure migration cost
Run the fourteen machines at list, around the clock, with no commitments and no licence tricks:
- Base compute (all fourteen, Linux rate): £1.6760 per hour, or £14,681.76 a year
- Windows licence uplift on the eight Windows machines: £0.7790 per hour, or £6,824.04 a year
- Total pay-as-you-go compute: £21,505.80 a year, about £1,792 a month
That is the Azure migration cost a naive calculator gives you, and it is where most estimates stop. It is also, as the rest of this article shows, well under half of the real invoice.
The burstable trap that quietly inflates your Azure migration cost
Here is the most useful thing in this entire guide, and it is invisible in every pricing calculator.
Two sizes, the same price, one of them undiscountable
Four of our fourteen machines run on B2ms — the classic burstable size that every small business ends up on, because it is cheap and the domain controllers do nothing for twenty-three hours a day. Query Microsoft’s price feed for UK South and you will find pay-as-you-go rows for B2ms and B4ms, and no reservation rows at all. The older burstable series simply cannot be reserved in this region.
Now look at B2s v2, from the newer burstable generation. Identical two vCPU and 8 GiB. Identical Linux list price of £0.0710 an hour. And it has a three-year reservation at £709.64 for the term — £236.55 a year.
What the wrong size adds to your Azure migration cost, per machine
| Option | Per year | Against B2ms list |
|---|---|---|
| B2ms, pay-as-you-go (no reservation exists) | £621.96 | — |
| B2s v2, pay-as-you-go | £621.96 | identical |
| B2s v2, three-year reserved | £236.55 | −62.0% |
| B2as v2, pay-as-you-go | £560.64 | −9.9% |
| B2as v2, three-year reserved | £212.97 | −65.8% |
Choosing B2ms instead of B2s v2 costs £385.41 per machine per year for no benefit whatsoever. Across our four burstable machines that is £1,541.66 a year, or £4,625 across a three-year commitment, thrown away on a letter in a size name.
The one caveat, stated honestly
The newer generation is not universally cheaper. The Windows meter on B2s v2 is £0.0783 an hour against £0.0768 on B2ms — fractionally dearer per hour before any reservation. If a burstable machine runs Windows and you have no intention of committing to a term, B2ms is marginally the better buy. In every other case the newer series wins, and it wins by a lot. This is exactly the kind of detail that separates a real Azure migration cost model from a calculator output.
Reservations: the biggest single lever on Azure migration cost
Reservations are the only discount in Azure that reliably halves an Azure migration cost, and they are the first thing to model.
What reservations take off our Azure migration cost
Ten of the fourteen machines sit on reservable sizes. At list, those ten cost £12,193.92 a year. Committed for three years they cost £4,816.70 — a 60.5% reduction. Committed for one year they cost £7,525.30, a 38.3% reduction.
The four burstable machines, stuck on B2ms with no reservation available, stay at £2,487.84. So the blended discount across the whole estate is not 60.5% at all — it is 50.2%. One badly chosen size on 17% of the estate costs ten percentage points of discount across the whole thing.
Reservations against savings plans
Microsoft sells two commitment products. A reservation locks a specific size in a specific region and discounts it hardest — up to 72% on Microsoft’s own published comparison. A savings plan commits you to an hourly spend rather than a machine, applies automatically across eligible compute, and discounts less — up to 65%.
For a fourteen-machine estate that is not going to change shape much, reservations are almost always the right answer. Savings plans earn their keep when you genuinely do not know what you will be running in eighteen months.
The commitment risk, priced
The obvious objection is lock-in. It is a fair one, and it is smaller than it sounds at this scale: the three-year commitment on the ten reservable machines is £14,450 in total. If the business shrinks, Azure reservations can be exchanged or cancelled subject to Microsoft’s published limits, and the exposure is a fraction of the hardware cheque the same firm would otherwise write. Weigh it properly rather than treating it as a reason to pay list for three years — which is what most SMEs actually do.
The Windows tax missing from your Azure migration cost estimate
Of the £21,505.80 pay-as-you-go compute figure, £6,824.04 — 31.7% — is the Windows Server licence, not the machine underneath it.
What Windows adds to the Azure migration cost, machine by machine
| Size | Windows uplift /hr | Per year | As % of the Linux rate |
|---|---|---|---|
| B2ms | £0.0058 | £50.81 | 8.2% |
| D2s v5 | £0.0693 | £607.07 | 83.0% |
| D4s v5 | £0.1384 | £1,212.38 | 82.8% |
| D8s v5 | £0.2770 | £2,426.52 | 82.9% |
| E4s v5 | £0.1385 | £1,213.26 | 62.2% |
On a D-series machine, Windows costs roughly 83% of the compute it runs on. Put differently: you can very nearly run two Linux machines for the price of one Windows machine of the same size. That single fact should shape which workloads you bother to move at all.
Reservations do not touch it
This is the part that surprises people. A reservation discounts the compute meter. It does not discount the Windows licence meter, which continues to bill at list price for the whole term. So our estate with three-year reservations and no licence strategy costs £4,816.70 plus £2,487.84 plus the full £6,824.04 of Windows tax — £14,128.58 a year, only 34% below list, not the 60% the reservation headline implies.
The odd case of burstable Windows
Notice that B2ms carries only an 8.2% Windows uplift while D2s v5 carries 83%, for the same two vCPU. That is not a mistake in the feed; the burstable series is priced differently. It means a small Windows workload is dramatically cheaper on burstable sizes — and it means the licence-recovery arithmetic in the next section has a very lopsided answer.
Azure Hybrid Benefit: the biggest Azure migration cost lever you own
Azure Hybrid Benefit lets you stop paying that Windows meter by bringing your own Windows Server licences with active Software Assurance or a qualifying subscription. It is the single largest lever available to a Windows-heavy SME, and it has a rule that almost nobody prices correctly.
The eight-core minimum changes everything
Microsoft requires a minimum of eight core licences per virtual machine, regardless of how small the machine is. Run a two vCPU machine and you must still allocate eight core licences to it. Run a twelve-core machine and you allocate twelve.
Our eight Windows machines total twenty-eight vCPU. Covering all of them under the benefit requires sixty-four core licences — you licence 2.3 times the cores you actually run. If your on-premises hosts carry two processor licences each, remember that one processor licence is treated as sixteen core licences, so three hosts with one processor licence apiece would give you forty-eight.
The forty-eight-fold spread
Because every machine costs the same eight licences but returns wildly different amounts of Windows tax, the value of a core licence depends entirely on where you point it.
The same eight core licences are worth £2,426.52 a year on the drawing server and £50.81 a year on a domain controller. That is a 47.8-fold difference for an identical licence spend, and it is pure arithmetic from published rates.
The half-price answer
Suppose the business owns thirty-two core licences with Software Assurance — two hosts’ worth. Spend them on the four biggest Windows machines and you recover £6,064.55 of the £6,824.04 Windows tax: 88.9% of the benefit for 50% of the licences.
The remaining four machines — three burstable domain and print servers plus one D2s v5 — carry only £759.49 between them. Buying another thirty-two core licences with Software Assurance to capture that £759.49 is almost certainly a loss. Nobody’s Azure migration cost model tells them this, because nobody models the eight-core minimum.
Check the licence position before you commit
Two practical warnings. The benefit only runs while Software Assurance or the subscription licence is live, so a lapsed agreement silently re-prices your estate at list. And Microsoft’s Product Terms take precedence over any summary, including this one — read them for your specific agreement before building a business case on the saving.
Azure migration cost line two: storage you pay for but never fill
Compute gets the attention in every Azure migration cost estimate. Storage gets the invoice.
Managed disks bill provisioned capacity, not used capacity
This is the single largest conceptual difference between a SAN and Azure. On premises, a 6.2 TB array was one purchase and the empty space was free. In Azure, every disk is a fixed-size tier and you pay the full tier price whether it is 5% full or 95% full.
Our estate needs fourteen operating-system disks plus data volumes for the file server, document store, drawing server and database. Laid out sensibly, that is:
| Purpose | Disk | Qty | Each /month | Total /month |
|---|---|---|---|---|
| Operating system disks | E10 Standard SSD, 128 GiB | 14 | £7.9467 | £111.25 |
| Database volume | P20 Premium SSD, 512 GiB | 1 | £66.6697 | £66.67 |
| Drawing server volume | P30 Premium SSD, 1,024 GiB | 1 | £123.0748 | £123.07 |
| File shares and document store | E30 Standard SSD, 1,024 GiB | 7 | £63.5738 | £445.02 |
| Total | 10,496 GiB provisioned | 23 | — | £746.01 |
£8,952.18 a year for storage — against £7,304.54 a year for optimised compute. On a small estate, storage costs more than the servers.
The utilisation gap, priced
Those disks hold about 6.2 TB of real data in 10,496 GiB of provisioned space — 59.1% utilisation. The business is paying every month for 4,296 GiB of empty disk, roughly £275 a month, because disk tiers come in fixed sizes and you must leave headroom.
That is not waste in the usual sense; it is the price of a tiered model. But it must be in the Azure migration cost budget, and it is the reason “we have 6.2 TB, what does 6.2 TB cost” is the wrong question.
Premium against standard SSD, and what it does to Azure migration cost
The tier choice on those seven big data disks is the second-largest storage decision after size.
The per-gigabyte arithmetic
A 1,024 GiB E30 Standard SSD costs £63.5738 a month — £0.0621 per GiB. The equivalent P30 Premium SSD costs £123.0748 — £0.1202 per GiB. Premium is 93.6% dearer for the same capacity.
Provision every disk in our estate on premium and storage rises from £746.01 to £1,302.52 a month — from £8,952.18 to £15,630.20 a year, an increase of £6,678.02, or 74.6%.
Where the premium is worth paying
Premium is right for the database volume and the drawing server, because both are latency-sensitive and both would generate support calls if they were slow. It is not right for fourteen operating-system disks that boot once a month, and it is not right for a document archive that people read at human speed.
A default of “premium everywhere, to be safe” is the most expensive safe decision available, and it is the default a lot of partners apply because nobody was paid to think about it.
Do not forget the disk mount fee
Premium and standard SSD disks also carry a small separate “disk mount” charge — £6.1798 a month on a P30 or E30, £0.8564 on a P10 or E10. It is trivial per disk and it is not trivial across twenty-three disks. Check that your Azure migration cost model includes it, because most spreadsheets do not.
One figure we could not verify
We were unable to obtain a primary-source price for AWS gp3 volumes in the London region, so no cross-platform storage comparison appears in this article. We would rather leave a gap than import a US rate and call it British.
The platform floor is half your Azure migration cost
Now for the part that no calculator models and no Azure migration cost quote includes, and which turns out to be the largest single block of the Azure migration cost.
What the Azure migration cost floor is
A virtual machine in Azure does not run on its own. To be reachable, protected, recoverable and supported, it needs a set of platform services that are billed by the hour whether the machines are busy or idle — and, crucially, whose cost barely changes between fourteen machines and twenty-eight.
| Service | Rate | Per year |
|---|---|---|
| VPN Gateway, VpnGw1 | £0.1430 /hr | £1,252.68 |
| Site-to-site connection | £0.0113 /hr | £98.99 |
| Azure Bastion, Standard | £0.2182 /hr | £1,911.43 |
| Azure Firewall, Basic | £0.2972 /hr | £2,603.47 |
| Three static public IP addresses | £0.0038 /hr each | £99.86 |
| Log Analytics ingestion, 22.4 GB/month | £2.1673 /GB | £582.57 |
| Azure Backup, 14 protected instances | £7.5253 /instance/month | £1,264.25 |
| Backup storage, 8,400 GB locally redundant | £0.0211 /GB/month | £2,126.88 |
| Azure Site Recovery, 14 machines | £18.8133 /machine/month | £3,160.63 |
| Defender for Servers, 14 nodes | £0.0151 /node/hr | £1,851.86 |
| Azure support, Standard plan | $100 /month | £902.70 |
| Platform floor total | — | £15,855.34 |
The Azure migration cost figure that reframes the whole exercise
£15,855.34 a year. More than twice the optimised compute bill. In a fully optimised steady-state year the split is:
The Azure migration cost you were quoted was for the 22.6%. That is the whole thesis of this article in one line.
Why this hurts small businesses specifically
The floor is close to fixed. A gateway costs the same for fourteen machines as for forty. Spread across our estate it works out at £1,132.52 per machine per year. Spread across a 140-machine enterprise estate, the same services cost roughly a tenth of that per machine. The cloud infrastructure economics that make Azure compelling at scale work against you at forty-eight staff — which is precisely the size of business that is told the cloud will save it money.
Firewall, Bastion and gateway: three calls that set your Azure migration cost
If the floor is half the Azure migration cost, the three decisions that set the floor deserve more scrutiny in an Azure migration cost model than machine sizing.
Azure Firewall is the single most expensive tier choice in the estate
| Tier | Deployment /hr | Data processed | Deployment per year |
|---|---|---|---|
| Basic | £0.2972 | £0.0489 /GB | £2,603.47 |
| Standard | £0.9407 | £0.0120 /GB | £8,240.53 |
| Premium | £1.3169 | £0.0120 /GB | £11,536.04 |
Azure Firewall Standard costs £8,240.53 a year — 1.13 times the entire reserved compute bill for all fourteen machines. Premium costs more than compute and storage combined. For most SMEs the answer is Basic, or network security groups plus a third-party appliance, and the decision should be made by someone who has seen these numbers.
Bastion and gateway sizing
Bastion Basic is £0.1430 an hour (£1,252.68 a year) against Standard at £0.2182 (£1,911.43). VPN gateways run from Basic at £0.0271 an hour up to VpnGw5 at £2.7467 — the top tier costs £24,061 a year on its own. VpnGw1 at £1,252.68 a year handles a forty-eight-person office comfortably.
If you are considering ExpressRoute instead, the Standard gateway is £0.1430 an hour, the same as VpnGw1 — but the circuit itself is billed separately by your carrier and is not in Microsoft’s price feed at all. Budget for it explicitly.
Monitoring is metered by the gigabyte
Log Analytics ingestion at £2.1673 per gigabyte sounds small until somebody enables verbose diagnostics on every resource. At 22.4 GB a month our estate pays £582.57 a year; triple the log volume and it is £1,748. Retention beyond the included period adds £0.0978 per GB per month. Set collection rules deliberately on day one — it is far harder to unwind later.
Backup and replication: the Azure migration cost of being able to recover
Backup and disaster recovery together account for £6,551.76 of our £15,855.34 floor — 41% of it. They are also the lines most often cut from a quote to make the headline Azure migration cost look competitive.
Azure Backup, priced properly
Backup has two meters. A protected-instance fee of £7.5253 per machine per month covers the first tranche of data, and then you pay for the backup storage itself. Across fourteen machines the instance fees alone are £1,264.25 a year.
Storage depends on redundancy. Our 8,400 GB of retained backup data costs £2,126.88 a year locally redundant at £0.0211 per GB per month. Choose geo-redundant storage at £0.0421 and the same data costs £4,243.68 — 99.5% more, an extra £2,116.80 a year for an off-region copy.
The database machine is charged differently
Watch the SQL Server line. Backing up a database inside an Azure virtual machine is charged at £23.5166 per protected instance per month, more than three times the standard rate — £282.20 a year for one machine. Nobody itemises this in a proposal.
Site Recovery is per machine, per month, forever
Azure Site Recovery costs £18.8133 per replicated machine per month to Azure — £3,160.63 a year for fourteen machines. That is real disaster recovery capability and it is worth having. It is also, on its own, 43% of the reserved compute bill, and it is the first line a competitor will quietly omit to undercut you.
What we would tell a client
Do not cut backup to make the Azure migration cost look better. Do decide, deliberately, which machines genuinely need replication. Replicating the two test machines costs £451.52 a year to protect workloads nobody would miss for a week. That is the kind of edit that reduces an Azure migration cost without reducing what the business can actually recover.
Egress: the Azure migration cost scare story that is not one
Data transfer out of Azure is the most over-discussed line in cloud pricing, and at SME scale it is very close to a rounding error.
The published UK South rates
Outbound data over the internet routing preference is free for the first 100 GB each month, then £0.0602 per GB up to 10 TB, £0.0489 from 10 to 50 TB, £0.0452 from 50 to 150 TB, and £0.0301 above that. Inbound is free. Traffic between availability zones costs £0.0075 per GB in each direction.
What it costs a real small business
Our forty-eight-person consultancy pushes about 400 GB a month outbound. After the free allowance that is 300 chargeable gigabytes, £18.06 a month — £216.72 a year, or 0.7% of the total Azure migration cost.
The comparison that makes the point
Egress costs this business £216.72 a year. Upgrading the firewall from Basic to Standard costs £5,637.06 a year. The industry spends its energy warning SMEs about the first and never mentions the second.
When egress does matter
Egress becomes a real line if you run a public media service, ship large datasets to third parties, or replicate continuously to another provider. A firm moving 20 TB a month would pay around £11,900 a year, and that changes the architecture. Check your current outbound volume at the firewall before assuming either way — measuring it takes an afternoon and removes the guesswork permanently.
Five Azure migration cost scenarios, side by side
Here is the whole run rate, five ways, with storage, floor and egress held constant and only the compute strategy changing.
| Scenario | Compute /yr | Total /yr | Compute share | Per employee /month |
|---|---|---|---|---|
| A. Lift and shift, pay-as-you-go, no licence strategy | £21,505.80 | £46,530.04 | 46.2% | £80.78 |
| B. Three-year reservations only | £14,128.58 | £39,152.82 | 36.1% | £67.97 |
| C. Reservations plus 32 core licences | £8,064.03 | £33,088.27 | 24.4% | £57.44 |
| D. Reservations plus 64 core licences | £7,304.54 | £32,328.78 | 22.6% | £56.13 |
| E. As D, plus burstable moved to the v2 series | £5,762.88 | £30,787.12 | 18.7% | £53.45 |
The counter-intuitive pattern
The harder you optimise compute, the less of the Azure migration cost compute represents — and the more the platform floor dominates. Going from A to E cuts the Azure migration cost by 33.8%, but the last two steps together move it by only 7.1%. Beyond a point, further machine-level tuning is not where the money is, and any honest Azure cost optimisation checklist has to say so.
The Azure migration cost to quote internally
Scenario C — reservations plus a realistic thirty-two core licences — is where most well-run SMEs land. £33,088.27 a year. £57.44 per employee per month. That is the honest steady-state Azure migration cost for this estate, and it is an Azure migration cost a board can actually discuss.
What the migration project adds to your Azure migration cost
Now the project half of the Azure migration cost. Fourteen machines, one directory, one database, one line-of-business application, a document store and a drawing archive: roughly thirty-eight days of effort across discovery, landing zone build, network and identity, pilot, waves, cutover and handover.
What UK skills actually cost
According to ITJobsWatch, for the six months to 20 August 2026, the median UK contract rate for Azure skills was £525 a day across 5,843 quoted rates, up 1.94% year on year, with the tenth percentile at £375 and the ninetieth at £725. Outside London the median was £500. Azure ranked fifth among contract IT skills and appeared in 15.60% of UK contract vacancies.
The permanent median was £65,000 across 7,840 salaries, up 8.33%, with a quarter of roles below £46,250 and a quarter above £83,750. A permanent hire at the median costs the employer £65,000 plus £9,000 of employer National Insurance — 15% above the £5,000 secondary threshold — plus around £3,250 of pension: £77,250 loaded, or £340.31 a day across 227 working days.
Four routes, priced
| Route | Basis | Cost | Index |
|---|---|---|---|
| A. Contractors at market rate | 38 days × £525 | £19,950.00 | 61.8 |
| B. Partner, time and materials | 38 days × £850 | £32,300.00 | 100.0 |
| C. Partner, fixed price | time and materials plus 18% risk | £38,114.00 | 118.0 |
| D. In-house led, 12 partner days | 26 × £340.31 plus 12 × £850 | £19,048.02 | 59.0 |
Two times. The identical thirty-eight days costs anywhere from £19,048 to £38,114 depending purely on how you buy it — a spread of £19,065.98.
What the extra 18% actually buys
Fixed price is not a rip-off; the premium is insurance against discovery being wrong. Whether it is worth paying depends almost entirely on the quality of your inventory. If you can hand a supplier an accurate list of machines, dependencies and integrations, the risk premium is money spent on a risk you have already retired. If your documentation is three years stale, take the fixed price and be grateful.
Azure Migrate is free for one hundred and eighty days
Microsoft’s own migration tooling is free, which is genuinely good news, and there is one clause in the small print that catches slow projects.
What you get for nothing
Azure Migrate’s server assessment, database assessment and migration, and web app assessment and migration are all provided at no additional charge. A single project supports assessment of up to 35,000 VMware or Hyper-V machines, and for UK customers the discovered metadata is stored in UK South or UK West — a point worth putting in writing for any data-residency question your insurer or client asks.
The clause that catches overrunning projects
Server migration is free for the first 180 days for each machine. After that, $25 per month per replicated instance applies. For our fourteen machines that is $350 a month — about £263.29 a month, £3,159.46 a year at the exchange rate Microsoft’s own price feed implies.
A migration that starts in January and drags into August therefore begins paying replication licences on machines that have not moved yet. It is not a large sum, but it is a penalty on delay that nobody budgets for and it lands exactly when a project is already in trouble.
The costs that are never free
Replication also incurs Azure Storage, storage transaction and data transfer charges throughout, and agent-based dependency analysis has attracted Log Analytics charges since July 2024. “Free tooling” means the licence, not the resources it consumes.
Year one, year three and year five Azure migration cost
Put the project and the Azure migration cost run rate together, and add the one line every budget forgets: running both worlds at once during the transition.
The full Azure migration cost picture
| Line | Amount | Note |
|---|---|---|
| Migration project, route B | £32,300.00 | one-off |
| Four months dual running at list | £7,168.60 | one-off |
| Steady-state year, scenario C | £33,088.27 | recurring |
| Year one total | £72,556.87 | project is 44.5% of it |
| Three-year total | £138,733.41 | project is 23.3% of it |
| Five-year total | £204,909.95 | project is 15.8% of it |
The dual-running line
For four months, machines exist in both places. The Azure side runs at list rather than reserved rates because you cannot sensibly commit to a three-year reservation for a machine you are still testing. £7,168.60 — more than a fifth of the project fee, and absent from almost every proposal we are asked to review.
Azure migration cost per head, per month
Over three years the whole thing costs £80.29 per employee per month, all in. That is a number a managing director can weigh against a mobile phone contract, and it is a far more useful way to present an Azure migration cost than a five-figure lump sum with no denominator.
The Azure migration cost of staying exactly where you are
No Azure migration cost comparison is honest without pricing the alternative, and the alternative is not free.
One year of not migrating
| Line | Basis | Per year |
|---|---|---|
| Hardware refresh, amortised | £42,000 over five years | £8,400.00 |
| Electricity | 17,500 kWh at 24p | £4,200.00 |
| Cooling and uninterruptible power | estimate | £1,850.00 |
| Hypervisor and backup software | renewals | £4,200.00 |
| Hardware maintenance | post-warranty cover | £2,600.00 |
| Administration, 0.25 FTE | £77,250 loaded × 0.25 | £19,312.50 |
| Total | — | £40,562.50 |
The comparison nobody expects
On a cash basis, with the refresh actually falling due, three years of staying put costs £138,487.50 — the £42,000 of hardware plus three years of everything else. Three years of Azure costs £138,733.41.
They are £245.91 apart. Azure is 0.18% more expensive.
Over five years the gap is still only 1.03% — £202,812.50 against £204,909.95. At this scale, and on these assumptions, migrating to Azure is not a cost-saving exercise. It is roughly cost-neutral, and every genuine benefit sits somewhere other than the Azure migration cost: resilience, remote working, the end of a 3am call about a failed array, and never buying another server.
If the refresh is not due
Change one input and the answer flips. If those three hosts have two comfortable years left, the migration adds £39,468.60 of project and dual-running cost against a steady-state saving of £7,474.23 a year — a 5.28-year payback. Migrating a healthy, recently purchased estate is a decision about capability, not cost, and any supplier who tells you otherwise is selling.
The single assumption that decides it: 0.251 of a person
Every Azure migration cost model above rests on one soft number, and it is worth isolating it.
The break-even, calculated
The on-premises case includes 0.25 of a full-time employee to look after three hosts. Strip administration out entirely and three years on premises costs £80,550.00. Against Azure’s £138,733.41, that leaves a gap of £58,183.41 over three years, or £19,394.47 a year.
Divide by the £77,250 loaded cost of an engineer and the break-even is 0.251 of a full-time employee — about 57 days a year.
What that means in practice
If keeping those hosts alive takes more than fifty-seven days of someone’s year, Azure is cheaper. If it takes less, staying put is cheaper. The five-year figure barely moves: 0.255 FTE, or 58 days.
Every other number in this article — every published rate, every reservation, every licence — is dwarfed by an assumption most businesses have never measured. Before you argue about machine sizes, spend a month logging what the servers actually take. It is the highest-value hour in the entire exercise, and it is free.
Why this is different at enterprise scale
At 140 machines the same calculation lands at roughly 0.6 FTE, because the platform floor is amortised across far more workloads. The smaller the estate, the fewer days of saved administration are needed to justify staying put — which is the opposite of how cloud migration is usually pitched to small businesses.
Twelve questions to ask before you sign an Azure migration cost quote
Take these to every supplier quoting an Azure migration cost. The answers separate a real proposal from a spreadsheet.
On the run rate
- Which of these lines is the run rate and which is the project fee? Show them separately.
- Does the monthly figure include backup, replication, firewall, gateway, Bastion, monitoring and support — or only virtual machines?
- What redundancy tier is the backup storage priced at, and what does the geo-redundant option cost?
- Are any machines mapped to the older burstable series, and if so why, given the newer generation can be reserved at the same list price?
On commitments and licensing
- Which machines are assumed reserved, for how long, and what happens to the quoted figure if we do not commit?
- How many Windows Server core licences with Software Assurance does this assume we own, and which machines do you propose applying them to?
- Have you applied the eight-core minimum per machine when counting licences?
- Does the quote assume the Windows meter is discounted by reservations? It is not.
On the project
- How many days of dual running are budgeted, and at what rate?
- What happens to the price if the migration runs past 180 days per machine?
- What is the risk premium in the fixed price, and what specifically would let us reduce it?
- What does the third year look like, itemised, assuming nothing changes?
Any supplier who can answer all twelve without going away to check is worth talking to further. Anyone who cannot answer the sixth and seventh is quoting from a calculator.
Frequently asked questions about Azure migration cost
Is Azure cheaper than running our own servers?
At forty-eight staff, on the Azure migration cost figures above, essentially no. Over three years the two options land within 0.18% of each other when a hardware refresh is genuinely due, and Azure is materially more expensive if the existing hardware still has life in it. Azure wins on capability, resilience and flexibility, not on price. Any Azure migration cost analysis that claims a large saving is usually omitting the platform floor.
What is the biggest hidden Azure migration cost?
The platform floor — gateway, firewall, Bastion, backup, replication, monitoring and support — at £15,855.34 a year, or 49% of the total Azure migration cost. It is very nearly fixed, so it hits small estates hardest. Nothing about it appears in a virtual machine pricing calculator.
How much does a migration project itself cost for fourteen machines?
Between £19,048 and £38,114 for the same thirty-eight days of work, depending on whether you use contractors, a partner on time and materials, a partner at fixed price, or run it in-house with partner support. The single largest determinant of the spread is the quality of your existing inventory.
Do reservations reduce Windows licensing?
No. Reservations discount the compute meter only. The Windows Server licence continues to bill at list price throughout the term. Azure Hybrid Benefit is the only way to remove it, and it requires licences with active Software Assurance or a qualifying subscription.
Is egress really as expensive as people say?
Not at this scale. With 100 GB free each month and £0.0602 per GB thereafter, our forty-eight-person firm pays £216.72 a year — 0.7% of the Azure migration cost. Egress matters for media-heavy or data-shipping businesses, not for a typical professional services firm.
Should we use Azure Migrate or a third-party tool?
Start with Azure Migrate. Assessment and most migration capability is free, a project handles up to 35,000 machines, and UK metadata stays in UK South or UK West. Just watch the 180-day free replication window per machine, after which $25 per instance per month applies.
What should we budget per employee for Azure migration cost?
For an estate of this shape, £57.44 per employee per month in a steady-state year and £80.29 per employee per month across the first three years including the project. Those figures assume reservations and thirty-two core licences applied to the largest Windows machines.
How long should the whole thing take?
Thirty-eight working days of effort for fourteen machines, typically spread over four to five calendar months once change windows, testing and user acceptance are allowed for. Compressing it below three months usually means paying contractors to work in parallel, which raises the fee without reducing the Azure migration cost.
What is the one thing we should do before asking for quotes?
Measure how many days a year your current servers actually consume. That single number decides the whole case, as the break-even calculation above shows, and no supplier can measure it for you. Good records of what you own and what it does — genuine IT asset management, not a spreadsheet from 2022 — are the cheapest thing you can buy before a migration and the most valuable.
Where does this leave a business that is unsure?
Price the alternative properly before deciding. If you would like this arithmetic run against your own estate rather than our fictional consultancy, our team can produce the same line-by-line model from your actual machine list — and if the answer is that you should keep your IT infrastructure exactly where it is for another two years, we will tell you that too. Ask the same of anyone else you talk to; the ones who will not say it are the ones to worry about, and the cybersecurity questionnaire your insurer sends next renewal will not care which answer you chose, only that you can evidence it.
References
Azure Retail Prices API — Microsoft Learn
Azure Virtual Machines Pricing (Windows)
Explore Azure Hybrid Benefit for Windows VMs
What is Azure savings plan for compute?
Microsoft Defender for Cloud Pricing
Azure Monitor and Log Analytics Pricing
Bsv2 Series Virtual Machine Sizes
ITJobsWatch — Azure Contract Rates
ITJobsWatch — Azure Permanent Salaries
Business Population Estimates 2025 — GOV.UK
