NAKIVO Backup saved the day!
Overall Satisfaction with NAKIVO Backup & Replication
Nakivo works cleanly and efficiently when backing up Hyper-V VMs. The software does well with a mixed environment of Linux and Windows VMs, and deduplication and compression make off-site backups viable. Restoring VMs from off-site or on-site storage was painless and easy.
Initially I was concerned that the several TB of VM data we had would be too much for off-site backups, but deduplication coupled with heavy compression brought this down to only a few hundred GB when uploading to Azure File Storage.
The software is quite flexible in that you can either use an SMB file store, or configure a light-weight VM in Azure with Nakivo's transporter installed for better security / more efficient transport when doing off-site backups. Using Backup Copy jobs allows you to keep nice and consistent backups.