Enabling Application-Aware Processing
To enable application-aware processing, in the Application Processing section of the Guest Processing step of the wizard, set the Enable application aware snapshots toggle to On.
While creating application-aware snapshots, VSS Guest Agent uses the VSS Copy Backup type to create snapshots of the processed Azure VMs during the backup policy session. This type of VSS backup does not support truncation of transaction log. For more information on VSS Backup types, see Microsoft Docs.
Limitation and Considerations
To enable application-aware processing, VSS agents must be installed on source Azure VMs. To install VSS agents, Veeam Backup for Microsoft Azure runs a specific PowerShell script on the source Azure VMs. That is why if you use PowerShell execution policies to control the conditions under which PowerShell loads configuration files and runs scripts on your source VMs, make sure that the LocalMachine scope is set to the RemoteSigned value. Otherwise, Veeam Backup for Microsoft Azure will not be able to run the script and application-aware processing will fail.