An Azure Cloud Service is a highly available, scalable, and multi-layered web app hosted on a Windows VM with an installed IIS.

Although an Azure Cloud Service is hosted on VMs there is a major difference that makes the Azure Cloud Service an PaaS offering. Cloud Services must be designed to work properly when any parts of the service fail. For this reason, the applications must not store their state in the file system of their own virtual machines. Unlike virtual machines created with Azure virtual machines, writes to virtual Cloud Services computers are not persistent because they do not have any virtual machine data disks.