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We have standalone Windows Server 2008 and we would like to move it to Azure Virtual Machines.

What is the best way to do this?

It's possible to upload VHD image to Azure. But how to create it from existing server we have only remote access to?

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You can use a tool such as Mark Russinovich's disk2vhd (link which should work for you. Assuming you RDP into the server, you should be able to install and run this utility to create your vhd. Here it is, running on my newly-created Win2K8 virtual machine in Windows Azure:

enter image description here

Note that I'm writing the vhd to the temp disk, part of the Windows Azure virtual machine deployment. Since I can't run any type of hyper-v app on Azure, I'd really want to write this vhd to a standalone Windows Server where I could run hyper-v and do the sysprep. Since you'll be running this on a standalone server (albeit via rdp), you will probably be able to load this up with VirtualPC / Hyper-V and do the sysprep on the image.

Once that's done, it's fairly straightforward to upload the vhd (instructions are here).

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