Microsoft Azure Services: What Azure Is and How It Works

Microsoft Azure services are cloud computing products you rent on demand rather than buy as hardware. Microsoft calls Azure "a trusted cloud platform" with "more than 200 cloud-based products and cloud services". Much of it overlaps with Amazon Web Services and Google Cloud, so the choice usually turns on the software you already run.

What is Microsoft Azure?

Microsoft Azure is Microsoft's public cloud platform: computing, storage, networking, database, identity and AI services you rent by the hour or the unit instead of buying as hardware. You buy named services rather than one product, and the ones you meet first are Azure Virtual Machines, Azure App Service for web applications, Azure Files and Azure Blob Storage for storage, Azure SQL Database, and Microsoft Entra ID for identity.

Azure is not Microsoft 365. Outlook, Word, Excel and Teams are Microsoft 365 services licensed per user, while Azure is infrastructure billed by what you consume. They share an identity system but are separate projects.

How Azure works: from buying hardware to paying for consumption

Azure replaces hardware you own with services you meter. Before platforms like Azure you hosted that infrastructure yourself, and every new requirement meant buying more hardware first. Microsoft's Cloud Adoption Framework contrasts the two. A capital expenditure model "requires a significant upfront investment in hardware and equipment", while in the cloud "IT spending shifts toward an Operating Expenses (OpEx), or revenue-based, model" (Microsoft Learn). Need more capacity and you adjust the service, need less and you turn it down.

What you stop buying, and what you still run

Azure removes the hardware, not the administration. Microsoft’s own documentation says an Azure virtual machine saves you "having to buy and maintain the physical hardware", but that "you still need to maintain the virtual machine by performing tasks, such as configuring, patching, and installing the software". The work moves rather than disappears, from racking hardware to managing networking and access. Managed services such as Azure App Service take more of it back, at the cost of some control.

What scaling actually means in practice

You configure scaling, it is not automatic. Autoscale adds and removes resources as load changes, and "when load is low, autoscale reduces the number of resources, which lowers your costs". It adds instances rather than making one bigger, and Microsoft supports it on a named list of services, so check that your workload is on that list.

The benefits of Azure for business, and where they stop

Azure gives a mid-market business three things it would otherwise build: capacity you can change without a purchase order, identity and access management you do not operate, and backup you do not run. None of the three arrives switched on. The Azure region in Ireland is North Europe, paired with West Europe, and if you already run Microsoft software you start from the identity system your people use daily, because Microsoft 365 and Azure share Microsoft Entra ID.

Your people reach these services over the internet rather than the office network, so they can work from anywhere on a device you manage, and infrastructure you no longer keep on site is infrastructure you no longer power, cool or replace.

Identity and access

Azure Active Directory no longer exists under that name. Microsoft says "the name changes were publicly announced on July 11, 2023", that the change across Microsoft experiences "started on August 15, 2023", and that licensing, terms, service-level agreements, support and pricing "remain the same" (Microsoft Learn). The product is now Microsoft Entra ID.

Microsoft describes its single sign-on as letting users "sign in once and reach many applications", and you decide which applications each person gets, because "admins control access from one identity provider". Your people "sign in with one set of credentials", so fewer passwords circulate. That is not the same as removing password risk. Access control, multifactor authentication and conditional access, the rules that decide when a sign-in is challenged, stay with you.

Backup and disaster recovery

Azure Backup covers on-premises workloads, Azure virtual machines, Azure Files, Azure Blobs and SQL Server in Azure virtual machines. Azure Site Recovery is the separate disaster recovery service, replicating a workload to a second location. Neither is instant. How much data you could lose, and how long you would be down, follow from the policies you configure.

Where Microsoft Dynamics 365 Business Central actually sits on Azure

Business Central online runs on Azure. Microsoft describes it as "a multitenant service, comprised of multiple microservices running on the Microsoft Azure cloud ecosystem", meaning many customers share one managed service built from small independent parts, and names Azure Functions, Azure Cosmos DB, Key Vault, Service Bus and Microsoft Entra among the technologies it uses. It is "running globally in more than 170 countries/regions, out of 21 Microsoft Azure regions" (Microsoft Learn). An Irish environment sits in the Europe Azure geography, a UK one in the United Kingdom geography.

What Microsoft runs, and what stays yours

Microsoft does the platform work. Azure SQL Database takes "automatic backups that it keeps for 28 days", every environment also has "automatic geo-redundant backups", meaning copies held in a second region, and an administrator can restore to any point inside those 28 days. Microsoft "financially guarantees 99.9% up-time for its paid production environments", a contractual commitment with compensation attached, not a promise of no outage.

What decides whether the system is safe and usable stays with you. Who has an account, what each role can see, which integrations you open, and what data you load. The Azure services you are most likely to add around Business Central are integration ones, including Azure Logic Apps through the Business Central connector, which Zoosh Digital covers in Business Central integration. For the product itself rather than the platform, see Business Central explained for SMBs.

GDPR, data residency and what Azure does not do for you

Running on Azure does not make your company compliant with the General Data Protection Regulation. It gives you a platform with documented commitments and leaves the legally weighty obligations with you. Microsoft states that "data controllers are responsible for assessing risks to data privacy and determining appropriate uses of their data", and that it acts as processor on the controller's behalf (Microsoft Learn), which makes you the controller. In Ireland the GDPR is given further effect by the Data Protection Act 2018, with the Data Protection Commission as supervisory authority.

The shared responsibility model

Microsoft's responsibility matrix shifts with the service type, but four items never move away from you:

• Data, including classification, protection and encryption
• Endpoints, the client devices your people use
• Accounts, meaning creating and removing user access
• Access management, including role-based access control and multifactor authentication

Microsoft's own caution about that matrix belongs in your procurement file, because it is "illustrative guidance and is not intended to convey legal conclusions" (Microsoft Learn). The contract decides, not the diagram. Zoosh Digital sets out how much of the security burden moves to the platform in what makes a good ERP system.

The Microsoft EU Data Boundary

For an Azure customer in Ireland the EU Data Boundary is the residency commitment Microsoft publishes for Azure. It is Microsoft's commitment to store and process customer data and personal data for Azure, Dynamics 365, Power Platform and Microsoft 365 inside a defined geography, the 27 EU Member States plus Liechtenstein, Iceland, Norway and Switzerland, with data centres including Ireland. Microsoft announced on 26 February 2025 that it had completed the EU Data Boundary for the Microsoft Cloud.

The caveat is Microsoft's own. Those commitments are "subject to limited circumstances where Customer Data, personal data, and Professional Services Data will continue to be transferred outside the EU Data Boundary" (Microsoft Learn). The continuing-transfer documentation, last updated on 30 March 2026, lists them, including remote access to data stored in the boundary and fulfilling GDPR data subject rights requests worldwide.

The EU Data Act and getting back out again

Since 12 September 2025 you have had a statutory right to switch cloud providers, under the EU Data Act, Regulation (EU) 2023/2854. The regulation sets the mechanics. Article 25(2) requires your contract to carry "a maximum notice period for initiation of the switching process, which shall not exceed two months" and "the mandatory maximum transitional period of 30 calendar days", extendable to at most seven months under Article 25(4) where the switch is technically unfeasible. Article 29(1) provides that "From 12 January 2027, providers of data processing services shall not impose any switching charges on the customer for the switching process", and until then a charge must not exceed the provider's costs "directly linked to the switching process concerned" (EUR-Lex).

Questions worth asking before you move a workload to Azure

Three questions separate a solid Azure proposal from a vague one, including one from Zoosh Digital. Which Azure services is this built on, named individually, and which of them does Microsoft manage? Who holds the administrator accounts once it is live? And what would it take to export your data if the arrangement ends? The answers show where the line falls between what Microsoft operates and what your own team is left holding.

Zoosh Digital is a Business Central implementation and technology partner working with organisations across the UK, Ireland and Europe, supporting cloud ERP, custom development and long-term optimisation. In Zoosh Digital's experience advising Irish and UK SMBs, a meaningful share of businesses that arrive expecting to commission a full custom system are better served by a Business Central configuration or a smaller extension, which usually means less of Azure to design and run.

FAQ

Is Microsoft Azure the same as Microsoft 365?

No. Microsoft 365 is the per-user licence covering Outlook, Word, Excel, Teams and SharePoint. Microsoft Azure is infrastructure and platform services billed by consumption. They share the Microsoft Entra ID identity system but are separate projects.

Does Microsoft Dynamics 365 Business Central run on Azure?

Yes. Microsoft describes Business Central online as "a multitenant service, comprised of multiple microservices running on the Microsoft Azure cloud ecosystem", running "out of 21 Microsoft Azure regions". If your business is in Ireland, your environment sits in the Europe Azure geography.

Does using Microsoft Azure make a company GDPR compliant?

No. Azure supports compliance, it does not deliver it. Microsoft acts as the data processor and you remain the data controller. Under the shared responsibility model, data, endpoints, accounts and access management stay with you.

Can a business move off Azure later?

Yes. Since 12 September 2025 the EU Data Act has given EU customers a statutory switching framework. Article 25 caps the notice period at two months and the transitional period at 30 calendar days, extendable where the switch is technically unfeasible, and Article 29 bans switching charges from 12 January 2027.

Referenced sources

• Microsoft. What is Azure? azure.microsoft.com/en-us/resources/cloud-computing-dictionary/what-is-azure.
• Microsoft Learn. Fiscal outcomes of cloud adoption. learn.microsoft.com/en-us/azure/cloud-adoption-framework/strategy/business-outcomes/fiscal-outcomes.
• Microsoft Learn. Azure Virtual Machines overview. learn.microsoft.com/en-us/azure/virtual-machines/overview.
• Microsoft Learn. Autoscale overview. learn.microsoft.com/en-us/azure/azure-monitor/autoscale/autoscale-overview.
• Microsoft Learn. Azure regions list. learn.microsoft.com/en-us/azure/reliability/regions-list.
• Microsoft Learn. New name for Azure Active Directory. learn.microsoft.com/en-us/entra/fundamentals/new-name.
• Microsoft Learn. What is single sign-on? learn.microsoft.com/en-us/entra/identity/enterprise-apps/what-is-single-sign-on.
• Microsoft Learn. Azure Backup overview. learn.microsoft.com/en-us/azure/backup/backup-overview.
• Microsoft Learn. Azure Site Recovery overview. learn.microsoft.com/en-us/azure/site-recovery/site-recovery-overview.
• Microsoft Learn. Business Central service overview. learn.microsoft.com/en-us/dynamics365/business-central/dev-itpro/service-overview.
• Microsoft Learn. GDPR and Microsoft services. learn.microsoft.com/en-us/compliance/regulatory/gdpr.
• Microsoft Learn. Shared responsibility in the cloud. learn.microsoft.com/en-us/azure/security/fundamentals/shared-responsibility.
• Microsoft Learn. Learn about the EU Data Boundary. learn.microsoft.com/en-us/privacy/eudb/eu-data-boundary-learn.
• Microsoft Learn. EU Data Boundary continuing transfers, last updated 30 March 2026. learn.microsoft.com/en-us/privacy/eudb/eu-data-boundary-transfers-for-all-services.
• Microsoft. Microsoft completes the EU Data Boundary, 26 February 2025. blogs.microsoft.com/on-the-issues/2025/02/26/microsoft-completes-landmark-eu-data-boundary-offering-enhanced-data-residency-and-transparency.
• European Commission. Data Act policy page. digital-strategy.ec.europa.eu/en/policies/data-act.
• EUR-Lex. Regulation (EU) 2023/2854 (Data Act). eur-lex.europa.eu/legal-content/EN/TXT/HTML.