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Using Azure VM VHD for local VM installation

I have a VM running in Azure. Is it possible to download the VHD from blob storage and use it to create/launch a VM on my local machine using hypervisor?

If this is possible, do you believe Windows 2012 server licensing could be an issue?

Yes, from purely technical perspective it should work locally once VHD is downloaded. If VHD fails to mount locally, make a local copy of a downloaded VHD file and then mount that resulting copy.

Regarding your licensing question, according to this page: http://azure.microsoft.com/en-us/pricing/licensing-faq/

Can I move Windows Server 2012 licenses and images between Hyper-V and Azure? Windows Server licenses are not eligible for License Mobility through Software Assurance. The license to run Windows Server in the Azure environment is included in the per-minute cost of your Windows Virtual Machine. Licenses for use of Windows Server on-premises (whether in a VHD or otherwise) must be obtained separately through volume licensing.

In other words, the Windows license cost is included in the Azure per-minute cost you pay. If you download the VHD and use it in house, you must have a license.

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