Sysprep is the tool that's used to generalize the source virtual machine. It is a Windows utility that essentially removes all account information from a machine. What this tool does is remove security information, such as the SID/GUID, from a virtual machine and then it prepares the computer for a first-time boot— much like a new laptop would behave upon the initial boot. 

Removing all security information from a virtual machine allows an image of it to be taken and used over and over without duplicate SIDs/GUIDs causing issues related to having multiple identical computers on the network.

To begin the process of preparing the myVM2 virtual machine to be used as an image, perform the following steps:

1. Log in to the virtual machine using RDP and launch the Command Prompt as an administrator. Get the public IP for the virtual machine so you can RDP to it by running the following command:

      Get-AzureRmPublicIpAddress `
       -Name myPublicIPaddress2 `
       -ResourceGroupName VMLab | Select IPAddress

2. Once you've logged into myVM2, launch the command prompt as an admin and change to the %windir%system32sysprep directory and run sysprep.exe:

3. From the System Preparation Tool dialog box, choose Enter System Out-of-Box Experience (OOBE) and make sure that the Generalize checkbox is checked. In Shutdown Options, select Shutdown and then click OK:

4. Clicking OK launches the Sysprep process. When Sysprep completes, the virtual machine is automatically shut down.