Azure managed disks are the default disks selected when you create a VM in the Azure portal. They handle storage for your VMs completely. Previously, you would have had to manually create storage accounts to store VM hard disks, and when your VM needed to scale up, you had to add additional storage accounts to make sure you didn't exceed the limit of 20,000 Input/Output Operations Per Second (IOPS) per account.
With managed disks, this burden is now handled for you by Azure. You can now create 10,000 VM disks inside a subscription, which can result in thousands of VMs inside a subscription, without the need to copy disks between storage accounts.