Explanation
In-guest VM metrics with the Azure diagnostics extension
The Azure diagnostics extension is an agent that runs inside a VM instance. The agent monitors and saves performance metrics to Azure storage. These performance metrics contain more detailed information about the status of the VM, such as AverageReadTime for disks or PercentIdleTime for CPU. You can create autoscale rules based on a more detailed awareness of the VM performance, not just the percentage of CPU usage or memory consumption.
References:
https://docs.microsoft.com/en-us/azure/virtual-machine-scale-sets/virtual-machine-scale-sets-autoscale-overview