Simplest solution may be to build it local then upload it.
https://learn.microsoft.com/en-us/azure/virtual-machines/windows/prepare-for-upload-vhd-image
--please don't forget to Accept as answer if the reply is helpful--
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Hi,
I have a customized iso image using which I want to provision a VM in Azure, i have been checking VM creation process but i dont find such options available, can anyone confirm if this is supported and can be done in Azure.
OR an alternative would be to create VM using customized iso in hyperV locally and then export VHD and create a new VM using this?
seeking for best option available to have a VM running in Azure using my customized windows 10 image
Simplest solution may be to build it local then upload it.
https://learn.microsoft.com/en-us/azure/virtual-machines/windows/prepare-for-upload-vhd-image
--please don't forget to Accept as answer if the reply is helpful--
@Anonymous is correct and that would be my first recommendation as well.
To answer your question regarding whether or not Windows VM images can be installed with an ISO, the answer here is no (Windows custom images typically use a VHD or VHDX).
Operating System ISOs are usually disc images designed with a dedicated startup and installation process which causes problems in a VM environment as your VM would not boot and write from a disc.