Hi @Christopher Baca ,
Thank you for reaching out to Microsoft Q&A for this question.
You are correct that Azure DevTest Labs would be a good choice for the scenario as mentioned above. The following links give a quick overview of the features of DevTest Labs:
Introduction to Azure DevTest lab
Note that you can use a number of other services/options available for this scenario too. One such option would be to use Azure ARM template with Azure Custom Script Extension to provision VM as well as configure it using custom script post deployment. The benefit of this process is that you can have infrastructure as a code (IaaC) which can be re-used to minimize the manual effort and errors. It could also be a good way to have versioned scripts to deploy your application and its dependencies, so that you can deploy resources not only for current version and current version -1, but for older versions as well.
I would suggest exploring DevTest labs first as it is specifically designed for dev/test environment. Please let me know if you have any questions.
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