The DTU model
In the DTU purchasing option, the amount of resources (CPUs, I/O, RAM, and storage) to be assigned to an SQL database in a particular service tier is calculated in DTUs.
DTUs guarantee that an SQL database will always have a certain amount of resources and a certain level of performance (offered under a particular DTU model) at any given point in time, independent of other SQL databases on the same SQL server or across Microsoft Azure.
The ratio for the aforementioned resources was calculated by Microsoft by running an Online Transaction Processing (OLTP) benchmark. One DTU roughly equates to 1 transaction/sec as per the benchmark.
The DTU purchasing model measures performance in DTUs instead of CPU and memory. Each DTU level and service tier provides predictable performance. The higher the DTU, the better the performance.
Note
The DTU purchasing model is not available with SQL Managed Instance.
In the DTU purchasing model, the compute and storage are bundled and priced together. For example, the 10 DTU standard service tier has a fixed storage capacity of 250 GB included within the DTU cost. Any additional storage is charged separately.