IaaS service provided by Microsoft Azure to host custom persistent virtual machines running Windows Server or Linux.
Microsoft Azure Virtual Machine enables you to create a server in the cloud that you can control and manage. After you create a virtual machine in Microsoft Azure, you can access it like any other server and you can delete and re-create it whenever you need to. You can use a virtual machine in Microsoft Azure to deploy Windows OS images or various distributions of Linux operating systems.
Virtual Networks are available to connect these Virtual Machines together, and to your existing in-house infrastructure.
Note: Microsoft Azure Virtual Machine (which is IaaS) should not be confused with Microsoft Azure Cloud Services VM Role (which is PaaS and was retired 31st May 2013).
For more information, see http://msdn.microsoft.com/en-us/library/windowsazure/jj156003.aspx.