Unable to create a Storage Space in Windows 2012 R2 when using Windows Azure data disks

We recently determined Windows 2012 R2 Storage Spaces is incompatible with the virtual hard drives (VHDs) created by Windows Azure for use as data disks. Not only will the disks not enumerate in Server Manager, but they will also show up as CanPool=false when enumerated using Get-PhysicalDisk in PowerShell. The same VHDs work fine when used with Windows 2012.The root cause of the problem is that the physical disk size advertised by Azure VHDs isn’t compatible with Windows 2012 R2 Storage Spaces.

A fix is under development and is currently targeted for deployment in January 2014. In the meantime, if you need to leverage Storage Spaces to improve IOPS performance, you should continue to use Windows 2012 for your workload. Then, once the fix has been released, you can either migrate your workload to Windows 2012 R2 or upgrade your Windows 2012 virtual machines to Windows 2012 R2.

UPDATE Jan. 14: The fix for this issue is currently being deployed, however it is expected to be a few more weeks before it is fully deployed across Windows Azure.