When should I use system-assigned vs user-assigned managed identities?

System-assigned identities are simpler — they are created and deleted with the resource, and each resource gets exactly one. Use them for single-resource scenarios where the identity lifecycle matches the resource lifecycle. User-assigned identities are independent resources that can be assigned to multiple Azure resources simultaneously. Use them when multiple resources need the same permissions (reducing the number of role assignments), when you need the identity to persist beyond a resource's lifecycle, or when you pre-create identities in Terraform before the consuming resource exists.

What are federated identity credentials?

Federated identity credentials allow external identity providers (GitHub Actions, Kubernetes, Google Cloud, AWS) to authenticate as an Azure managed identity or app registration without exchanging secrets. The external workload presents its native token (OIDC), Azure validates it against the configured issuer, subject, and audience, and issues an Azure access token. This eliminates the need to create and rotate client secrets for CI/CD pipelines. You configure the trust relationship by specifying the issuer URL, subject identifier, and audience values that must match the incoming token.

Managed Identity Role Builder

IAM & SecurityAzure

Build managed identity role assignments and federated credentials.

Managed Identity Role Configuration

Identity Name

Identity Type

Resource Group

Location

Role Assignment 1

Role Definition Name

Scope

Description (optional)

Generated Managed Identity Config

Output will appear here...

About This Tool

Azure Managed Identities eliminate the need for applications to store credentials by providing an automatically managed identity in Microsoft Entra ID. System-assigned identities are tied to a single resource's lifecycle, while user-assigned identities can be shared across multiple resources. After creating a managed identity, you must assign it the correct RBAC roles on the target resources. The Managed Identity Role Builder helps you configure identity type, role assignments with proper scope, and federated identity credentials for workload identity federation with external identity providers like GitHub Actions or Kubernetes.

When to Use This Tool

•Configuring a system-assigned managed identity on an App Service with Reader role on Key Vault and Contributor on Storage
•Creating user-assigned managed identities shared across multiple Function Apps that need access to the same Cosmos DB account
•Setting up federated identity credentials for GitHub Actions to deploy to Azure without storing client secrets

Frequently Asked Questions

When should I use system-assigned vs user-assigned managed identities?: System-assigned identities are simpler — they are created and deleted with the resource, and each resource gets exactly one. Use them for single-resource scenarios where the identity lifecycle matches the resource lifecycle. User-assigned identities are independent resources that can be assigned to multiple Azure resources simultaneously. Use them when multiple resources need the same permissions (reducing the number of role assignments), when you need the identity to persist beyond a resource's lifecycle, or when you pre-create identities in Terraform before the consuming resource exists.
What are federated identity credentials?: Federated identity credentials allow external identity providers (GitHub Actions, Kubernetes, Google Cloud, AWS) to authenticate as an Azure managed identity or app registration without exchanging secrets. The external workload presents its native token (OIDC), Azure validates it against the configured issuer, subject, and audience, and issues an Azure access token. This eliminates the need to create and rotate client secrets for CI/CD pipelines. You configure the trust relationship by specifying the issuer URL, subject identifier, and audience values that must match the incoming token.

Related Learning Guides

Azure AD & RBAC Guide26 min read

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