Azure Entra Managed Identities provide a secure, seamless way for Azure resources to authenticate to other Azure services and APIs without needing secrets, credentials, or stored connection strings.

Instead of managing passwords or rotating keys, the identity is fully handled by Azure—reducing risk, improving security posture, and simplifying authentication workflows.

What Are Managed Identities?

Managed identities are service identities created and managed by Azure Entra ID (formerly Azure AD). They allow Azure-hosted applications, services, and workloads to obtain tokens for authentication using Microsoft Entra without storing credentials in code, configuration, or Key Vault.

Key benefits include:

  • No secrets or credentials to manage

  • Automatic credential rotation handled by Azure

  • Tight integration with Azure RBAC and Access Policies

  • Simplified, secure authentication to Azure services

Typical use cases include accessing Azure Key Vault, Azure Storage, Azure SQL, Event Hubs, Service Bus, and REST APIs.

Types of Managed Identity

Azure Entra Managed Identities come in two forms:

System-Assigned Managed Identity

  • Created directly on an Azure resource (e.g., VM, App Service, Function)

  • Lifecycle is tied to that resource

  • Deleted automatically when the resource is deleted

  • Each resource can only have one system-assigned identity

Best for single-resource authentication scenarios.

User-Assigned Managed Identity

  • Created as a standalone Azure resource

  • Can be assigned to one or many resources

  • Lifecycle is independent of any resource

  • Can be centrally managed and reused

Best for shared authentication or multi-resource architectures.

Differences Between System-Assigned and User-Assigned

System-Assigned

 User-Assigned
Created with resource itself Manually created as separate resource
Deletes with resource Independent of resources
Assigned to single resource Assigned to one or many resources
Not shared Shared
Low management overhead Medium management overhead
Best for single-resource workloads Best for shared or enterprise setups

Using Managed Identities with Azure Resources

Managed identities are supported across many Azure services. Common usage patterns include:

Grant Permissions via Azure RBAC

  1. Enable a managed identity on your resource

  2. Assign a role (e.g., Storage Blob Data Reader)

  3. The resource authenticates using the managed identity token

No passwords, certificates, or stored secrets required.

Accessing Azure Key Vault

Instead of storing secrets in app settings:

  • Grant the managed identity Key Vault Access Policy or RBAC role

  • The application requests a token and retrieves secrets securely

Authenticating to Azure Storage, SQL, or APIs

Managed identities work seamlessly with:

  • Azure Storage (Blobs, Queues, Tables)

  • Azure SQL Database

  • Event Hub & Service Bus

  • Microsoft Graph & custom APIs

Any service that supports Microsoft Entra authentication can trust a managed identity.

Summary

Azure Entra Managed Identities eliminate the need for application credentials by providing secure, automatically-managed identities for Azure resources.

  • They come in two types: System-Assigned and User-Assigned

  • System-Assigned identities are tied to a single resource

  • User-Assigned identities are reusable and centrally managed

  • They simplify authentication and significantly reduce secret-management risk

If you’re building secure cloud applications on Azure, managed identities are one of the most powerful—and safest—ways to authenticate your workloads.