Rather than requiring an actual on-premise physical machine, you can create VMs on demand—either from an image you supply or from a standard image.
To create a VM, you simply specify which Virtual Hard Disk (VHD) to use and the size of the VM.
Once you’ve done that, you define a VM role for your application.
Essentially, Azure provides you with a server in the cloud that you can control and manage.
You can deploy any available instance of Windows Server or Linux.
Each VM will have your virtual hard desk (VHD) and it can contain your customized settings as well as your applications.
You can make changes to these settings and applications while a VM is running, and the change is persisted such that the next time you create a VM from that VHD, the changes will be reflected. Alternatively, you can
copy the changed VHD out of the cloud and run it locally.
There are different ways in which Windows Azure can be used.
Windows Azure’s VMs, in essence, provide the highest level of flexibility for those who would like to have access to many machines and full control of their management.