I'm evaluating MS cloud Windows Azure for hosting 3 completely separated websites.
Every website has its own database and they are not connected, so 3 websites and 3 databases.
My aim is to optimize costs for a start-up project with the possibility to scale up on demand.
I would like to know:
Thanks for your time on this.
You can absolutely run multiple web sites on the same instance, starting with SDK 1.3, as full IIS is now running in Web Roles. As Jonathan pointed out with the MSDN article link, you can set up the Sites element to define each website. You should also check out the Windows Azure Platform Training Kit, which has a lab specifically around building a multi-site web role.
You can also take advantage of something like Cloud Ninja or Windows Azure Accelerator for Web Roles, which provides a multi-tenant solution that you can load into your Web Role (check out the Cloud Cover Show video here for more info).
When hosting multiple websites, remember that they're all sharing the same resources on an instance. So you might find that an Extra Small instance won't meet your performance needs (it's limited to 768MB RAM and approx. 5Mbps bandwidth). I think you'll be fine with Small instances and scaling out as you need to handle more traffic.