@Anuj Jain Server side encryption [SSE] is default offering. All of your Azure VMs managed disks are always encrypted by default when they are stored on underlying storage. This is encryption at rest by the Azure itself.
You don’t need any additional efforts to perform Server Side Encryption of Azure VM Managed disk. More importantly you can't disable it as well. Server side encryption is not optional, and always provided behind the scene.
Azure Disk Encryption of Azure VM Managed Disks
Azure Disk Encryption [ADE] is optional. This method provides an extra layer of security over SSE. This encryption is performed at OS level of VM and hence there are many conditions where ADE is supported/ not supported. Where as SSE is always performed at backend storage level and has nothing to do with OS of VM being encrypted.
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