They might have the same LUN ID (0) but they have different channel IDs (0 and 1), i.e.
C00T00L00
and
C00T01L00
This is perfectly acceptable, in fact even in say an FC/FCoE/iSCSI environment you can have the same LUN number so long as the full path is different.
Yes you can change the location of cache to a temporary disk (the D drive in Azure VM). Just remember that this disk is not persistent so you can loose data there anytime. To do that, follow those steps to change the cache location:
1- Stop the Backup engine by executing the following command in an elevated command prompt: PS C:> Net stop obengine
2- Do not move the files. Instead, copy the cache space folder to a different drive with sufficient space. The original cache space can be removed after confirming the backups are working with the new cache space
3- Update the following registry entries with the path to the new cache space folder
Registry path : HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows Azure Backup\Config
Registry Key : ScratchLocation
Value : type your New cache folder location
Registry path : HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows Azure Backup\Config\CloudBackupProvider
Registry Key : ScratchLocation
Value : type your New cache folder location
4- Re-start the Backup engine by executing the following command in an elevated command prompt:
PS C:> Net start obengine
Once the backup creation is successfully completed in the new cache location, you can remove the original cache folder.
Best Answer
When you add a data disk from the Azure portal you choose the "host Cache preference" this would be "None", "Read Only", or "Read/Write"
If you choose "None" then Azure Hosts won't cache. The VM host OS itself is controlled by you. You go into disk management and add the disk to the system and partition and format it to your desire. :)
A VM in Azure will always have 2 disks when you first create it. The C:\ drive for the OS and a D:\ drive for the swap file. The OS drive maps to your Azure storage and the D:\ drive maps to a local VHD file on the hyper-v host server. This d:\ drive is not persistent and you may lose data you stored on there when you are moved to a different hyper-v host. (No big deal cause it is for the swap file and that will be recreated)
If you are looking at how to set the no caching on your windows volume. From the Disk Management MMC.