Azure Virtual Machines are scalable computing resources provided by Microsoft Azure that allow users to run applications and services in the cloud. They function like traditional physical computers but are hosted in a virtual environment, enabling flexibility and easy management. Users can choose from various operating systems and configurations to meet their specific needs. With Azure Virtual Machines, businesses can quickly deploy and manage workloads without the need for physical hardware. This service supports a wide range of applications, from simple web hosting to complex enterprise solutions, making it a versatile option for organizations of all sizes.