You should be able to back up your files and data to a storage account and then upgrade your Windows Server OS to the latest version/edition.
Thanks for the feedback. This has a relatively high test cost and given we have the newest OS version available, we haven’t heard much interest in this.
Please up-vote this and we will consider it.
There should be an upgrade path for the OS of Azure IaaS VMs. I will be difficult to get buy-in from customers if the future upgrades require complete VM redeployment. At that point On-prem may seem like a more practical solution.