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I am configuring Availability Groups feature in azure virtual machines nodes. In the below screen wizard, it's asking me for shared location. where and how I need to create this shared location?

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Do I need to have new VM with disk attached, which can be used as shared location?

OR

Do I have to create FILE SHARE feature in azure storage?

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That is for a backup to be taken and restored to all your secondaries, for an initial synchronization of the database. Generally that share is just for a one-time use, it will not use it again once they are in sync.

If you want to use it to sync up the databases it can just be a shared folder on the local server that all your replicas have access. The SQL Server service account for your other replicas would need read access to the share if you use it.

Alternatively if you restored the database, yourself, to the other replicas using WITH NORECOVERY you could just use the Join Only option.

The last option, simply means join it to the primary for right now and that is it. I will work on adding it and sync'n the database up to all the replicas later.

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