The answer is a system-assigned managed identity. This is the correct choice because it is directly tied to the lifecycle of the Azure VM—when the VM is deleted, the identity is automatically removed, eliminating orphaned credentials. It enables the VM to authenticate to Azure Storage without storing any secrets in code or configuration by using Azure AD tokens obtained via the Azure Instance Metadata Service (IMDS) endpoint at 169.254.169.254. On the AZ-104 exam, this scenario tests your understanding of identity-based access versus key-based access, often appearing in questions about secure application design. A common trap is choosing a user-assigned managed identity, which persists independently of the VM’s lifecycle, or suggesting Azure Key Vault, which still requires a secret retrieval mechanism. Memory tip: think “system = same lifecycle” as the VM, so deletion cleans up automatically.
AZ-104 Implement and Manage Storage Practice Question
This AZ-104 practice question tests your understanding of implement and manage storage. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A VM-based application needs to read from Azure Storage without storing a password, access key, or other secret in code or configuration. The identity should also be removed automatically if the VM is deleted. What should you enable?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
A system-assigned managed identity
A system-assigned managed identity is the correct choice because it is tied directly to the lifecycle of the Azure VM: when the VM is deleted, the identity is automatically removed. It allows the VM to authenticate to Azure Storage without storing any secrets in code or configuration, using Azure AD tokens obtained via the Azure Instance Metadata Service (IMDS) endpoint at 169.254.169.254.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
A system-assigned managed identity
Why this is correct
A system-assigned managed identity is attached to the VM itself, enabling secretless access and automatic cleanup when the VM is deleted.
Related concept
Read the scenario before looking for a memorised answer.
✗
A user-assigned managed identity
Why it's wrong here
A user-assigned identity can be reused, but it is not automatically removed when one VM is deleted.
✗
A storage account access key
Why it's wrong here
An access key works for authentication, but it is a secret that must be stored and rotated manually.
✗
A shared access signature
Why it's wrong here
A SAS token grants limited access, but it is still a credential that must be issued, managed, and eventually expired.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse user-assigned managed identities with system-assigned ones, overlooking the key requirement that the identity must be automatically removed when the VM is deleted, which only system-assigned identities guarantee.
Detailed technical explanation
How to think about this question
Under the hood, a system-assigned managed identity creates a service principal in Azure AD automatically when the VM is provisioned. The VM requests a token from the IMDS endpoint using a non-routable IP address, and Azure AD issues an OAuth 2.0 access token that the application can use to authenticate to Azure Storage via RBAC (e.g., the 'Storage Blob Data Reader' role). A subtle behavior is that the token has a default lifetime of 8 hours, but the Azure SDKs handle automatic refresh transparently.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-104 question in full detail.
Implement and Manage Storage — This question tests Implement and Manage Storage — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: A system-assigned managed identity — A system-assigned managed identity is the correct choice because it is tied directly to the lifecycle of the Azure VM: when the VM is deleted, the identity is automatically removed. It allows the VM to authenticate to Azure Storage without storing any secrets in code or configuration, using Azure AD tokens obtained via the Azure Instance Metadata Service (IMDS) endpoint at 169.254.169.254.
What should I do if I get this AZ-104 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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