SQL Azure is Microsoft's database server for the cloud.   You can provision and deploy relational databases without the startup cost required by on-premise databases.   This provides the rich features of SQL with the flexibility and scalability of the cloud which can be a great for ISVs looking to quickly build a new or extend an existing application.  It is also ideal for a startup looking to start or grow your business with limited resources.

So what is SQL Azure and more importantly what is it not?   Want to know how SQL Azure works?  The SQL Azure has written a whitepaper that gives an overview of SQL Azure.  This includes the details of the Azure SQL architecture and how SQL Azure provides high availability and immediate scalability for your data.

Inside SQL Azure