The permission scope for system-assigned and user-assigned managed identities in Azure differs primarily in how they are managed and applied across resources.
**System-Assigned Managed Identities are created automatically when you enable them on an Azure resource, such as a virtual machine or Azure Function. The lifecycle of these identities is tied to the resource they are associated with; they are created when the resource is created and deleted when the resource is deleted. Each system-assigned identity is unique to its resource and cannot be shared across multiple resources. Permissions must be assigned individually to each identity, which can lead to more administrative effort if multiple resources require the same permissions[1][2][3].
**User-Assigned Managed Identities, on the other hand, are created as standalone resources and can be assigned to multiple Azure resources. Their lifecycle is independent of the resources they are associated with, meaning they persist even if the resources are deleted. This allows for centralized management of permissions across multiple resources, as the same user-assigned identity can be used by several resources, reducing the complexity of managing individual permissions for each resource[2][3][6].
In terms of permission scope, system-assigned identities are limited to the specific resource they are tied to, while user-assigned identities can be used to grant consistent permissions across multiple resources, simplifying administration and ensuring uniform access control[1][2][6].
Citations:
[1] https://ourcloudnetwork.com/how-to-use-connect-mggraph-identity-with-managed-identities/
[2] https://www.red-gate.com/simple-talk/cloud/azure/azure-function-and-user-assigned-managed-identities/
[3] https://learn.microsoft.com/en-us/entra/identity/managed-identities-azure-resources/overview
[4] https://www.reddit.com/r/AZURE/comments/xkzxrc/azure_managed_identity_vs_user_assigned_managed/
[5] https://docs.azure.cn/en-us/automation/enable-managed-identity-for-automation
[6] https://docs.azure.cn/en-us/entra/identity/managed-identities-azure-resources/managed-identity-best-practice-recommendations
[7] https://docs.azure.cn/en-us/role-based-access-control/role-assignments-portal-managed-identity
[8] https://learn.microsoft.com/en-us/entra/identity/managed-identities-azure-resources/managed-identities-faq