To protect against localized hardware failures, such as a disk or network switch failing, deploy two or more VMs in an availability set. An availability set consists of two or more fault domains that share a common power source and network switch. VMs in an availability set are distributed across the fault domains, so if a hardware failure affects one fault domain, network traffic can still be routed the VMs in the other fault domains.
An Availability Zone is a physically separate zone within an Azure region. Each Availability Zone has a distinct power source, network, and cooling. Deploying VMs across availability zones helps to protect an application against datacenter-wide failures.
To protect an application against a regional outage, you can deploy the application across multiple regions, using Azure Traffic Manager to distribute internet traffic to the different regions. Each Azure region is paired with another region.