Microsoft recently announced that Azure Backup now supports System State backups directly to Azure Backup service, without installing Azure Backup Server.
This is a great improvement to Azure Backup service to it's current capabilities (backup Azure VMs and files on sever).
But I keep getting question will this feature allow to restore a System State backup of domain controller running as Azure Virtual Machine.
And the answer is no, at least not yet. It is not possible to connect to Directory Services Restore Mode (DSRM) for a VM running in Azure.
But I am 100% that we will have this feature in future.