The lifecycle of a system-assigned managed identity is directly tied to the lifecycle of the Azure resource it is enabled on. When a system-assigned managed identity is created, it is automatically linked to the Azure resource (such as a virtual machine or app service) and shares its lifecycle. This means that when the Azure resource is deleted, the system-assigned managed identity is also automatically deleted[1][3][5]. This approach simplifies management for resources that do not need to outlive their parent resource.
In contrast, a user-assigned managed identity is created as a standalone Azure resource. Its lifecycle is independent of any specific Azure resource, allowing it to be shared across multiple resources[2][4][7]. This means that even if all associated resources are deleted, the user-assigned managed identity remains active until it is explicitly deleted by the user. This flexibility is useful for scenarios where multiple resources need to access the same services or when resources are frequently recycled but require consistent permissions[2][3].
Citations:
[1] https://cloudtips.nl/the-magic-of-azure-managed-identities-%EF%B8%8F-19747c37e652
[2] https://docs.azure.cn/en-us/entra/identity/managed-identities-azure-resources/overview
[3] https://www.varonis.com/blog/azure-managed-identities
[4] https://m365internals.com/2021/11/30/lateral-movement-with-managed-identities-of-azure-virtual-machines/
[5] https://learn.microsoft.com/en-us/entra/identity/managed-identities-azure-resources/overview
[6] https://blog.johnfolberth.com/azure-managed-identities-user-vs-system-assigned/
[7] https://blueprint.asd.gov.au/design/platform/identity/managed/
[8] https://stackoverflow.com/questions/61322079/difference-between-service-principal-and-managed-identities-in-azure