Final Update: Friday, Jan 26th 2018, 21:53 UTC
After investigating, we discovered that this issue is only applicable to a subset of customers who are using the image factory. This issue should be resolved for the remaining set of customers. We continue to investigate the issue for image factory users.
Initial update: Friday, Jan 26th 2018, 19:17 UTC
We are investigating the issue where users are experiencing a time out when sysprepping a VM based on a Windows Server 2012 R2 Marketplace image. We're working to understand the reason and will post an update soon.