Hi @Hagar Elshentenawy 

To protect Azure VM you do not need a backup gateway. Metallic will connect to your subscription and configure backups to east us. 

To protect Hyper-V VM, you would need to deploy a backup gateway adjacent to your Hyper-V cluster/environment on-prem (not in Azure).

Option 1 (Recommended) 

1. Configure primary copy to be stored on-prem a.k.a called local copy with a shorter retention period say 30 days. This ensure your time to restore from primary copy is not impacted by network latency 
2. Configure a secondary copy to Azure for long term retention. We recommend using Metallic cool for secondary copy if you do not plan to restore from the Azure frequently.

Option 2 (Not Recommended)

1. From on-prem Hyper-V using the backup gateway, configure Primary Copy directly to your Azure Storge via your site-to-site connectivity to Azure. Even with site-to-site connectivity, the backup and restore to primary copy will still be subject to latencies. If your VMs are huge in capacity the latency can have a substantial impact.
2. Configure Secondary copy to anothe Azure Storage account in Azure.We recommend using Metallic cool for secondary copy if you do not plan to restore from the Azure frequently

Hello @Mohit Kshirsagar ,

Thank you so much for taking the time to answer my question. I really appreciate it! I do have a follow up if you don’t mind. If add the gateway is on-prem, and I am using the metallic hot storage, I will not be using my site-to-site connection since it is not my azure environment I am backing up to correct? The reason I ask that is because we have limited storage on-prem so unfortunately the first option will be difficult. 

Hi @Hagar Elshentenawy 

I should have asked this before but when you say Site-to-Site is it a VPN or Azure Express Route? 

A site-to-site VPN. We don't have express route.

Hi @Hagar Elshentenawy 

Siste-to-Site VPN definitely wont be enough.

You can certainly backup direct (primary copy) to Azure but if you VMs are large it may take too long to complete one backup before the next one starts and recovery time will also depend on network performance

1. What is the maximum storage can you setup on-prem? May be we can fine tune the retention for primary copy in a way that it will fit the storage on-prem. 
2. How many VMs are you planning to backup?
3. How big are the VMs?

I am not sure what is your expected RPO but have you thought of backing up using the file system agent say 3 times a day and backup VMs once a day or once a week. This way you can use agent based backup for accidental recovery and VM recovery in case of DR event like VM Corruption.

With agent based backup, you may see better performance backing up to cloud directly compared to backing up entire VMs. Storage consumption will be lower than backing up entire VMs.