In the initial state a dummy service is used for storage.

To show the data evolution...
1. In Global.asax.cs, comment out line 66 and uncomment line 67. Now you are running locally against the local table storage.
2. In ServiceConfiguration.cscfg, comment out the local settings, uncomment the live settings, and be sure to add your account name and key. Now you are running locally against cloud storage.
3. Finally, publish your app to the cloud, and you'll be running in the cloud against cloud storage.