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we are migrating to sharepoint online. Can you please suggest that we should host provider hosted apps in azure web apps or in azure virtual machines having IIS? which one will be the good approach?

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Azure web apps fit perfectly for provider hosted add-in scenario. Use web apps.
Use virtual machine only in case if have a requirement to use them or you need to control everything (iis, firewall, antivirus, etc.).

Virtual machines have a few downsides:

  • more complicated deployment process
  • you will pay more for virtual machine
  • more complicated machine setup and management

The benefits are that you control everything about your environment, but that might and downside at the same time.

With web apps you have auto-scaling, slots, deployment and debugging from VS and a lot more cool things.

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