- A
System-assigned managed identity
A system-assigned managed identity lets the VM authenticate to Azure services without a stored secret.
- B
User-assigned managed identity
A user-assigned managed identity also avoids secrets on the VM and can be reused across resources.
- C
Storage account access key in an application setting
Why wrong: An access key is a long-lived secret, so it violates the requirement to avoid stored credentials.
- D
Shared access signature token saved on the VM
Why wrong: A SAS token is still a secret and must be stored and rotated, so it does not meet the requirement.
- E
Anonymous public access to the container
Why wrong: Anonymous access removes authentication, but it is not appropriate for a secure upload scenario.
Question 178 of 1,170
AZ-104 Manage Azure Identities and Governance Practice Question
This AZ-104 practice question tests your understanding of manage azure identities and governance. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. 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-hosted app needs to upload blobs without storing a storage account key or password on the VM. Which two authentication options meet this requirement? Select two.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
System-assigned managed identity
System-assigned managed identity (Option A) is correct because it allows the VM to authenticate to Azure Blob Storage without storing any credentials on the VM. When enabled, Azure automatically creates a service principal in Azure AD for the VM, and the VM can obtain an access token from the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) to authenticate to storage. This eliminates the need for any storage account key or password on the VM.
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.
- ✓
System-assigned managed identity
Why this is correct
A system-assigned managed identity lets the VM authenticate to Azure services without a stored secret.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
User-assigned managed identity
Why this is correct
A user-assigned managed identity also avoids secrets on the VM and can be reused across resources.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Storage account access key in an application setting
Why it's wrong here
An access key is a long-lived secret, so it violates the requirement to avoid stored credentials.
When this WOULD be correct
If the question allowed storing credentials in a secure configuration store (e.g., Azure Key Vault) and the VM retrieves the key at runtime without persisting it locally, then using a storage account access key via Key Vault would be acceptable. Alternatively, if the question did not prohibit storing keys on the VM, this option would be valid.
- ✗
Shared access signature token saved on the VM
Why it's wrong here
A SAS token is still a secret and must be stored and rotated, so it does not meet the requirement.
When this WOULD be correct
If the question required granting time-limited, delegated access to specific blobs or containers without using a managed identity (e.g., the VM is not in Azure or cannot use managed identities), and the SAS token is generated securely at runtime and not stored persistently, then a SAS token would be correct.
- ✗
Anonymous public access to the container
Why it's wrong here
Anonymous access removes authentication, but it is not appropriate for a secure upload scenario.
When this WOULD be correct
A question that asks: 'Which option allows read-only access to blobs without requiring authentication?' or 'Which option enables public read access to a container for hosting static websites?'
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The AZ-104 exam frequently reuses these exact scenarios with slightly different constraints.
✓System-assigned managed identityCorrect answer▾
Why this is correct
A system-assigned managed identity lets the VM authenticate to Azure services without a stored secret.
✗Storage account access key in an application settingWrong answer — click to see why▾
Why this is wrong here
The question requires that no storage account key or password be stored on the VM. Using a storage account access key in an application setting still involves storing a key (the access key) in the VM's application configuration, which violates the requirement.
★ When this WOULD be the correct answer
If the question allowed storing credentials in a secure configuration store (e.g., Azure Key Vault) and the VM retrieves the key at runtime without persisting it locally, then using a storage account access key via Key Vault would be acceptable. Alternatively, if the question did not prohibit storing keys on the VM, this option would be valid.
Why candidates choose this
Candidates may think that storing the access key in an application setting is secure because it's not hard-coded in the code, but they overlook that the key is still stored on the VM's file system or environment, which is explicitly disallowed by the question.
✗Shared access signature token saved on the VMWrong answer — click to see why▾
Why this is wrong here
A shared access signature (SAS) token saved on the VM is a stored credential, which violates the requirement to avoid storing a key or password on the VM. The SAS token itself is a secret that must be protected, and if the VM is compromised, the token can be stolen.
★ When this WOULD be the correct answer
If the question required granting time-limited, delegated access to specific blobs or containers without using a managed identity (e.g., the VM is not in Azure or cannot use managed identities), and the SAS token is generated securely at runtime and not stored persistently, then a SAS token would be correct.
Why candidates choose this
Candidates may think a SAS token is acceptable because it does not expose the storage account key, but they overlook that the token itself is a credential that must be stored or transmitted, which still violates the 'no stored credential' constraint.
✗Anonymous public access to the containerWrong answer — click to see why▾
Why this is wrong here
Anonymous public access to the container allows anyone to read blobs without authentication, but it does not allow uploading blobs (write access) without a storage account key or SAS token. The question requires upload capability, which anonymous access does not provide.
★ When this WOULD be the correct answer
A question that asks: 'Which option allows read-only access to blobs without requiring authentication?' or 'Which option enables public read access to a container for hosting static websites?'
Why candidates choose this
Candidates may think anonymous access eliminates the need for credentials entirely, overlooking that it only grants read permissions and does not support uploads.
Analysis generated from the official AZ-104blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may confuse 'not storing a key or password on the VM' with 'using a credential that is stored elsewhere on the VM' — for example, a SAS token saved in a file or an access key in an app setting still counts as a stored credential, while managed identities provide credential-less authentication via Azure AD tokens.
Trap categories for this question
Scenario analysis trap
Anonymous access removes authentication, but it is not appropriate for a secure upload scenario.
Detailed technical explanation
How to think about this question
Managed identities use the Azure Instance Metadata Service (IMDS) to acquire OAuth 2.0 tokens for Azure AD authentication. The VM requests a token from IMDS at http://169.254.169.254/metadata/identity/oauth2/token, and the token is then used in the Authorization header of requests to Azure Storage. This approach supports Role-Based Access Control (RBAC) via the Storage Blob Data Contributor or Storage Blob Data Reader roles, allowing fine-grained permissions without managing secrets.
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.
Quick reference
Azure Blob Storage Tier Comparison
| Tier | Storage Cost | Retrieval Cost | Latency | Use Case |
|---|---|---|---|---|
| Hot | Highest | Lowest | Immediate | Active data, frequent reads |
| Cool | Lower | Higher | Immediate | Data accessed < once / month |
| Cold | Lower still | Higher | Immediate | Data accessed < once / quarter |
| Archive | Lowest | Highest + rehydration delay | Hours | Long-term compliance retention |
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this AZ-104 question test?
Manage Azure Identities and Governance — This question tests Manage Azure Identities and Governance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: System-assigned managed identity — System-assigned managed identity (Option A) is correct because it allows the VM to authenticate to Azure Blob Storage without storing any credentials on the VM. When enabled, Azure automatically creates a service principal in Azure AD for the VM, and the VM can obtain an access token from the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) to authenticate to storage. This eliminates the need for any storage account key or password on the VM.
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.
About these practice questions
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Last reviewed: Jun 11, 2026
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