Hosting Requirement - Azure Possibility

I've got a SaaS application written as an server website that I'm hopefully going to offering demo's of in the near future.  The demo will include giving potential customers copies of the application that they can play with.    Because of concerns about robustness and security, there would be one completely distinct copy of the app per customer.

I thought at first of using folders within a single domain for this.  However, it was suggested to me that I use virtual machines with one of the cloud hosting providers, Azure being a first choice because of an existing relationship.  

In that approach, I would make an initial configuration of the application website with the full demo setup, upload the site to a hosted virtual machine, and make and image of it.   Then if a customer wanted a demo copy I would create a new virtual machine, load the image into it, give the customer the IP address, a login and some instructions, and they would be off and running (along with necessary training ans support).   The app is a type of group discussion; data volumes would be relatively low.  The demo machines would probably not persists for long (but long = interest = good = happy to pay for).

I've been looking at Azure to see if I can figure out how to manage and price that approach, and I'm not quite getting the picture.

So I thought I would ask some general questions that might make it more clear:
1) would the above approach work with Azure?
2) how do I configure such a site to start with?  are there prebuilt VM images with SQL Server, IIS, .NET, etc, that are set up more or less ready for me to upload my site files to?  Or do I have to assemble that myself?
3) does pay-by-the-hour pricing mean that (as an example) I could create a VM, load my demo site image to it, run it for an hour, take it down, and only be charged for an hour?

Any help or links with respect to this would be appreciated.

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Randy DownsOWNERCommented:
You can create a VM and capture it with Azure.

To create and use your own template VMs in the cloud with Windows Azure, we’ll be working through the following exercises in this guide:

Exercise 1: Provision a new Base VM in Windows Azure
Exercise 2: Customize, Prepare and Capture the base VM as an Image
Exercise 3: Deploy a new VM from an Image
Exercise 4: Automating Lab Provisioning with PowerShell

There are pre-configured images that you might try but the exercise above wants you to create your own custom image. Once tyou have it the way you like you can capture all of it.

pre-installed with an application, such as SQL Server or BizTalk server, as these platform images have already been customized with installed applications.  

Azure will actually let you pay by the minute.

If my deployed instance says "stopped,” am I still getting billed?
Maybe. If the status says “Stopped (Deallocated),” you’re not being billed. If it says “Stopped Allocated,” you’re still being billed for allocated virtual cores (not the software license itself). Full details on VM states are available here.
David Johnson, CD, MVPOwnerCommented:
have you instead considered using the Web Application instead?
codequestAuthor Commented:
Thanks for the inputs.  
@David Johnson:   Re Web Applications, I'm not sure how I would create additional demo copies of the site without using folders (or subdomains, or some such).  Part of the attraction of the VM's is the ability to create extra instances quickly and the relatively better isolation.  Any suggestions on how that would play with Web Applications?
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David Johnson, CD, MVPOwnerCommented:
Each Web Application is totally isolated from other web applications. A virtual machine just to run 1 web application is overkill and will cost considerably more.. Why pay for items that you won't be using!
10 of Sample VM $669.60/month 1 cores      1.75 GB RAM      70 GB disk      $0.090/hr
10 of App               $558.00/month 1 cores      1.75 GB RAM      10 GB            $0.075/hr

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codequestAuthor Commented:
@David.   Thanks for the note.  I'll take a closer look at the pricing.
codequestAuthor Commented:
I'm going to go with "App Service" (which is the new Azure name for websites), because of
1) the lower management overhead for the sites in general, and
2) the higher management overhead of taking the VM's up and down trying to control cost.
David Johnson, CD, MVPOwnerCommented:
Scaling is also a lot easier to scale up and down and same with geo-replication.
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