Azure disk storage
Disks that are used for VMs are stored in Azure Blob storage as page blobs. Azure stores two disks for each VM: the actual operating system (VHD) of the VM, and a temporary disk that is used for short-term storage. This data is erased when the VM is turned off or rebooted. There are two different performance tiers that Azure offers: standard disk storage and premium disk storage.
Standard disk storage
Standard disk storage offers a hard disk drive (HDD) to store data on, and it is the most cost-effective storage tier that you can choose. It can only use LRS or GRS to support high availability (HA) for your data and applications.
Premium disk storage
With premium disk storage, your data is stored on SSDs. Not all Azure VM series can use this type of storage. It can only be used with DS, DSv2, GS, LS, or FS series Azure VMs. It offers high performance and low-latency disk support.
Unmanaged versus managed disks
Managed disks are the default disk type in Azure and automatically handle storage account creation for you. With unmanaged disks, which are the traditional legacy disks used for VMs, you need to create a storage account manually, and then select that storage account when you create a VM. When you deploy unmanaged disks, you need to ensure that you cater to limits on the storage account (such as a maximum of 40 disks per standard storage account) before incurring throttling limitations. With managed disks, this burden is handled for you by Azure. Performance is predictable and more reliable, disks are secure by default, and you have better SLAs. When deploying, you select the disk type and the performance tier (standard or premium), and a managed disk is created. It also handles scaling automatically for you and removes limitations such as IOPS and disk count limits placed on storage accounts through throttling for unmanaged disks. Managed disks are recommended by Microsoft over unmanaged disks.
