If you want to install Kentico on a Windows Azure server, you must first install Kentico on your local computer:
Select the .NET Framework 4.0 if you want to open your project in Visual Studio 2010 after the installation OR select the .NET Framework 4.5 if you want to open your project in Visual Studio 2012.
Kentico CMS 7 uses Azure SDK 1.7 which is currently not available for .NET Framework 4.5. Therefore, Kentico for Windows Azure will always be installed with target .NET Framework 4.0.
The Installer copies the project files into the specified folder. After the installation is finished, click the displayed link to open the web project in Visual Studio.
Please proceed with the instructions in the Kentico CMS 7 Windows Azure Deployment Guide (everything else, including the database installation, remains the same as it was in the old installer).