SQL Server Transaction Logs in the Cloud It is a common practice to place the transaction logs (*.ldf) on a separate physical disk system than database files (*.mdf, *.ndf).

In a virtual machine cloud environment, is it okay to put the transaction logs on the same drive letter as the other data files? How is this usually handled in popular cloud virtual machine environments of today.

NOTE: Not using SQL Azure. Using a Windows virtual machine with full access.
In my extensive testing of cloud SQL on cloud servers (rackspace cloud, to be specific), I found that splitting the ldf and mdf to distinct block storage volumes made a significant improvement in performance. I achieved really hot performance by putting the ldf on an SSD based block storage volume and the mdf on a standard block storage volume.

Ultimately, of course, a block storage volume is a shared SAN somewhere. And local "instance" storage is on the hypervisor itself. So the hardware topology of your cloud environment will dictate what config will work best.