Every UK SMB with an aging on-premise server eventually asks us the same question: “If we moved this to Azure, what would it actually cost?”
The honest answer is “it depends” – and that is the answer most cost calculators will give you. So instead of another generic guide, here is a real worked example based on a project we ran last year: a 25-person professional services firm in the Midlands, an aging Dell PowerEdge, a creaking VPN, and a board that wanted a number.
Names changed and figures rounded, but the shape of the project is accurate. Use it as a sanity-check for any Azure migration quote you are looking at.
In short: for a typical 25-person firm an Azure migration is usually a few thousand pounds of one-off project work plus a predictable monthly run cost, and it often lands close to what you already spend on ageing servers. Here is the worked example, line by line.
Key takeaways
- Realistic one-off project cost for a 25-person SMB with one on-prem server: £8,000 to £15,000, depending on complexity.
- Realistic ongoing Azure run cost for the same scenario: £350 to £700 a month – less than the electricity, maintenance and replacement reserve the old server consumed.
- Three things drive the cost: data volume, app compatibility, and bandwidth. Get clear on these before requesting quotes.
- Almost every SMB we have migrated ends up paying less in total cost of ownership than they were before, even when the headline Azure bill looks larger than the old hardware lease.
The client
25 staff, three offices (head office in Lichfield, two remote satellite locations), a creaking on-premise file server, a line-of-business application running on an old Windows Server 2016 box, daily backup tapes that nobody had tested in three years, and a renewal quote from their current IT provider for a new physical server that was making everyone wince.
What they wanted to know: “Should we just buy another server, or move this to Azure?”
What we actually migrated
Mapping the environment is the first thing we do and the first thing every cost calculator gets wrong by skipping. For this client, the migration in scope was:
- File server – 380GB of company files, 25 users, accessed via mapped drives
- Line-of-business app – a SQL-based case management system, Windows Server 2016, 4 vCPU / 16GB RAM
- Print server – managing 8 networked printers
- Domain controller – on-premise Active Directory
- Backup target – an LTO tape drive (genuinely)
Out of scope (because we replaced them entirely rather than migrating): the email server (already on Microsoft 365), the VPN appliance (replaced by Azure Virtual Desktop), and the antivirus suite (replaced by Defender for Business).
The cost of the one-off project
This is the bit that scares people. Cards on the table, this is what a 25-person Azure migration project realistically costs in 2026:
| Workstream | Effort (days) | Cost (£) |
|---|---|---|
| Discovery + design (current state audit, target architecture, sign-off doc) | 3 | £1,800 |
| Azure tenant build (resource groups, networking, identity, RBAC, policies) | 2 | £1,200 |
| File server migration (380GB to Azure Files / SharePoint hybrid) | 3 | £1,800 |
| Line-of-business app lift-and-shift (Azure VM, SQL, app reconfig, testing) | 4 | £2,400 |
| Identity migration to Entra ID (decommission on-prem AD) | 2 | £1,200 |
| Azure Backup configuration + recovery test | 1.5 | £900 |
| Endpoint reconfiguration (25 laptops re-pointed to new resources) | 2 | £1,200 |
| User comms, training, weekend cutover, hypercare week | 2.5 | £1,500 |
| Total project | 20 | £12,000 |
So £12,000 one-off, delivered over six elapsed weeks. That price assumes our standard rate, no specialist software requiring custom integration, and that the client knows what they want before we start.
For comparison, the alternative quote was £14,500 for a new physical server with five-year support – before counting electricity, the new UPS, server-room aircon they were already deferring, and the staff time they were losing every time the old box hiccuped. The Azure project paid for itself in under two years on those numbers alone.
The cost of running it in Azure month-by-month
This is where most cost calculators give wild numbers because they are designed for enterprise workloads. For a 25-person SMB the real monthly run cost looks like this:
| Resource | Spec | Monthly (£) |
|---|---|---|
| Azure VM (line-of-business app) | D4s v5, 4 vCPU / 16GB, reserved instance 1-year | £160 |
| Azure SQL Database | General Purpose, 4 vCores, ~50GB data | £110 |
| Azure Files (file share) | Premium tier, 400GB | £80 |
| Azure Backup | VM + SQL + Files, 30-day retention | £55 |
| Networking (VPN gateway, egress) | Standard VPN gateway, ~50GB/month egress | £35 |
| Monitoring + log retention | Azure Monitor + 90-day retention | £25 |
| Total Azure consumption | £465 / month |
That is the consumption bill from Microsoft. On top of that, the client pays our flat £100/company/month for tenant management (audit logs, security baseline, ongoing reviews) plus their per-user managed IT support fees – but those exist whether they migrated or not.
So roughly £5,600 a year in Azure consumption versus what they were spending on the old server, electricity, support and replacement reserve, which we calculated at £7,900 a year. The Azure path was cheaper from day one even before counting the gains in reliability and remote-working capability.
What drives the price up or down
Every quote you receive for an Azure migration is going to differ based on three things:
1. Data volume
How much you have to move. 100GB is a coffee-break copy. 5TB needs careful planning, possibly an Azure Data Box (Microsoft posts you a physical encrypted disk you fill and post back). The 380GB in our example is on the small side and was done over the wire in one weekend.
2. App compatibility
Most modern apps are fine. The painful ones are 32-bit legacy software, anything with hardware dongles, or vendor-specific accounting / engineering packages from the 2010s. Allow extra time for compatibility testing on these.
3. Bandwidth at every site
If users are accessing files in Azure all day, the office internet connection becomes the single point of failure. A small office on a single 100Mbps line is usually fine; multiple sites or remote workers on home broadband sometimes need extra design (Azure Virtual Desktop, ExpressRoute, caching).
Three things people forget to budget for
Most cost calculators miss these. Add them to any quote you compare:
- Bandwidth upgrade. If you are moving from on-prem to cloud, your office connection becomes mission-critical. Budget a few hundred pounds a year for a faster or more resilient line if you do not already have one.
- Identity work. Decommissioning on-premise Active Directory takes time. If your IT provider’s quote does not mention Entra ID Connect or hybrid identity, ask why.
- Documentation and handover. The migration produces value only if someone can run it afterwards. Ask explicitly: “When this is done, what documents do we get? Can my next IT provider take over from this?”
Lift-and-shift, re-platform or SaaS: which is right?
Three strategies, three different price tags. The example above is mostly lift-and-shift – the cheapest path to Azure.
- Lift-and-shift. Move VMs as they are. Fast, cheap, but you pay for “always-on” Windows servers in the cloud. Best when the on-prem hardware is at end-of-life and you want it gone now.
- Re-platform. Modernise as you migrate. SQL on a VM becomes Azure SQL Database. File server becomes SharePoint or Azure Files. Initial cost is 30-50% higher; ongoing cost is 20-40% lower; you get the modern management story.
- SaaS-first. Replace the line-of-business app altogether with a SaaS equivalent (Xero for accounting, Clio for legal practice management, etc.). Often cheapest in the long run but requires a project on top of the migration.
We recommend a hybrid: lift-and-shift the workloads that have to stay, re-platform what makes sense, and have an honest conversation about SaaS for anything that has a clear cloud equivalent. The right mix is specific to your business.
FAQs we hear during scoping
“How long does an Azure migration take for a 25-person business?”
Six to eight elapsed weeks is realistic for the project above. Discovery and design takes the first two weeks, build takes two, migration and testing takes two, and you typically want a hypercare period for a week or two after cutover.
“Can we just turn off the old server immediately?”
No. We typically run on-prem and Azure in parallel for two weeks to make sure nothing breaks. Then we shut down the old box but keep it powered off for another month before disposal, in case someone discovers a file they forgot to migrate.
“What about disaster recovery?”
Azure handles a lot of it for you (multi-AZ storage, automated backups), but real DR – how fast can we be running again if our primary region goes down – needs designing. For a typical SMB, a daily backup with 30-day retention is usually enough.
“Are we tied to Microsoft forever?”
Less than you think. The VMs in our example are standard Windows machines; data on Azure Files is standard SMB. Could you move it all to AWS in two years? Yes – with the same effort it would take to move from one MSP to another.
How we help
If you have an aging server, a renewal quote that is making you wince, or just a board question about cloud strategy, we run a free 90-minute scoping call. You leave it with:
- A view of your current environment we can both agree on
- Three migration options at three price points
- A realistic monthly run-rate for each
- A go/no-go recommendation in writing, no pressure to proceed
We are a Microsoft Azure consultancy based in Lichfield, working with UK businesses of small businesses up to 100 staff. Most of our migration clients are 15 to 60 users, in professional services, manufacturing, charity and legal sectors.
Related reading: AVD vs Windows 365 for UK SMBs and our Microsoft Azure services page covering the wider Azure work we do.
Frequently asked questions
How much does an Azure migration cost for a small business?
For a 25-person firm with one on-premise server, a realistic one-off project cost is around £8,000 to £15,000, with ongoing Azure running costs of roughly £350 to £700 a month. The detail is in the worked example above.
How long does an Azure migration take?
Six to eight weeks is realistic for a typical small business: a couple of weeks of discovery and design, a couple to build, and a couple to migrate and test, with a hypercare period after cutover.
Will there be downtime during the move?
It is designed to avoid it. We run your old setup and Azure in parallel and cut over at a quiet time, usually a weekend, so your team should not lose working time.
Is Azure cheaper than buying a new server?
Often, once you count everything. A new server has hidden costs (power, cooling, replacement, downtime) that Azure avoids, and most SMBs we move end up with a lower total cost of ownership.
– Andy Price, Founder & MD, Initial IT · 01543 524594 · hello@initialit.co.uk