Final answer:
Azure Service Health is the service used to monitor service failure notifications affecting the availability of Azure virtual machines like VM1.
Step-by-step explanation:
The Azure service that should be used to view service failure notifications that can affect the availability of VM1 is Azure Service Health. Azure Service Health provides personalized alerts and guidance when Azure service issues affect your resources. It offers a comprehensive view of the health of Azure services, and it sends notifications about Azure service issues, planned maintenance, and health advisories.