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The reasons for backing up VMs on-premises and in Azure are similar. Different customer segments derive different value from the solution, but here is a list of commonly encountered reasons for backup of VMs:

 Reduced restore time during disasters The VM contains all the information needed to get the application up and running. This includes the operating system, the application software, the configuration settings, and the data. It would typically take more time to piece together all of these at the time of restore, so restoring the complete VM is much faster.

 Greater suitability for long-term retention The VM includes the user data and the associated application software to work with it. Thus, the restores done from very old backup points are more likely to achieve any data retrieval goals.

 Easier management The VM acts as an encapsulating entity for the data. Rather than manage tens to hundreds of smaller data entities, the VM makes it simpler for the backup administrator. This makes patch rollback scenarios easy to address.

Source of Information : Microsoft System Center