Veeam Backup for Microsoft 365 uses the Veeam Azure archiver appliance, a small virtual machine deployed in Azure, to efficiently move backed-up M365 data (Exchange, SharePoint, Teams, OneDrive) into Azure Archive Storage (cold tier) for long-term, low-cost retention, minimizing data egress and speeding up copy jobs by processing data locally within Azure.
The Azure archiver appliance is a small auxiliary machine in Microsoft Azure that is deployed and configured automatically by Veeam Backup for Microsoft 365. Veeam services that Veeam Backup for Microsoft 365 installs on the Azure archiver appliance compress data passed through. This helps reduce network traffic and increase the speed of backup copy.