I am creating app which uses Identity 2.1.0 framework in .NET. I started project in Visual Studio 2015 as Empty Web App (template). Now, I use Microsoft.AspNet.WebApi.
Microsoft.Owin.Host.SystemWeb is designed for hosting in IIS and all Azure App Service web apps are hosted in IIS, so this is exactly what you want (In fact, self-hosting likely won't work with Azure App Service).