Azure VM service offered under Azure compute service, is Azure IaaS that allows you to quickly spin up platforms with various OSs flavors other development tools and applications within minutes. For example, you can spin up VMs that perform just physical servers or machines for your production, stage, or test server environments. Azure VMs basically abstract the hardware and allows you to host multiple OS instances on the same physical machine.
Azure supports VM scale sets which allows you to set up a set of identical VMs which allows you to scale out and scale in based on your needs, manually or automatically. Another capability is Azure batch that allows you to implement and scale high-performance batch jobs across thousands of VMs.