System-assigned managed identities in Azure are primarily used for workloads contained within a single Azure resource. Here are some of their main use cases:
1. Workloads Contained Within a Single Resource: System-assigned managed identities are ideal for applications or services that run on a single Azure resource, such as a virtual machine or an Azure App Service. This setup simplifies authentication and eliminates the need for manual credential management, as Azure handles the creation and deletion of the identity tied to the resource's lifecycle[5].
2. Audit Logging and Permissions Lifecycle Management: System-assigned identities are beneficial when you need to log which specific resource carried out an action. Additionally, they ensure that permissions are removed along with the resource, aligning with the principle of least privilege and reducing security risks[3].
3. Independent Identities for Resources: If each resource requires a unique set of permissions or needs its identity to be deleted when the resource is deleted, system-assigned identities are the preferred choice. This approach ensures that each resource has its own identity, which is automatically managed by Azure[5].
Overall, system-assigned managed identities are suitable for scenarios where the identity's lifecycle should mirror that of the Azure resource itself.
Citations:
[1] https://www.techtarget.com/searchcloudcomputing/tip/Managed-identity-vs-service-principal-for-Azure-apps
[2] https://docs.azure.cn/en-us/automation/enable-managed-identity-for-automation
[3] https://learn.microsoft.com/en-us/entra/identity/managed-identities-azure-resources/managed-identity-best-practice-recommendations
[4] https://docs.azure.cn/en-us/entra/identity/managed-identities-azure-resources/managed-identities-faq
[5] https://learn.microsoft.com/en-us/entra/identity/managed-identities-azure-resources/overview
[6] https://stackoverflow.com/questions/61322079/difference-between-service-principal-and-managed-identities-in-azure
[7] https://www.varonis.com/blog/azure-managed-identities
[8] https://www.red-gate.com/simple-talk/cloud/azure/azure-function-and-user-assigned-managed-identities/