Hi, Thanks for posting.
What is your exact operating system specific.
Windows Server 2008 and Windows Server 2008 R2 RTM, Azure Update Management only performs update assessments.
Windows Server 2008 R2 SP1 and later support assessment and auto patching.
Please also ensure the system perquisites are met for update management : Refer here.
https://learn.microsoft.com/en-us/azure/automation/update-management/operating-system-requirements