This process for making a Hyper-V based appliance disk images work in Azure. This has been used several times for Linux based appliance.
ESXi network configurations work different and don’t transfer correctly to Azure, always go for Hyper-V images.
Boot up VM, enable remote settings and remove Hyper-V agents.
Using Hyper-V disk manager convert whatever the disk images is to a Fixed VHD(NOT VHDX).
Upload to blob storage, slowly…. Disk images over 100 GiB will take over 24 hours apparently.
Create a template from the disk image stored in blob storage.
Create a VM from the template.
Boot diagnostics are useless, you’re flying blind. Thanks for no console Microsoft.