Optimizing Azure Virtual Machines starts with selecting the right size and region for your workloads. Use managed disks for reliability and implement auto-shutdown schedules to save costs. Monitor performance with Azure Monitor and enable diagnostics for proactive issue detection. Leverage Azure Load Balancer or Application Gateway for scaling high-traffic applications. Regularly apply security updates using Azure Update Management. Snapshots and backups should be automated with Azure Backup for disaster recovery. Following these practices ensures better performance, cost-efficiency, and security for both Linux and Windows-based virtual machines hosted in Azure.