Diagnostics setting for azure VM

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If i enable diagnostic setting for vm in azure and send it to storage account.

I can't able to specify retention period.

Should we manually delete the older logs.

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Yes, if you send the logs to storage account, there is no way to configure the retention day. You need to delete it manually.

But there is a feature azure storage lifecycle management, you can use this feature to define a delete policy. For example, define a delete policy for a specific blob/container which can be deleted after x days.