The answer is a user-assigned managed identity. This is the correct choice because it is a standalone Azure resource that exists independently of any VM lifecycle, meaning it persists even when VMs are redeployed, and it can be assigned to multiple VMs across different resource groups simultaneously. On the AZ-104 exam, this question tests your understanding of managed identity types and their scope—specifically, that system-assigned identities are tied to a single VM and cannot be shared, while user-assigned identities are designed for cross-resource group scenarios. A common trap is assuming a system-assigned identity can be reused, but it is destroyed when the VM is deleted. Remember: user-assigned identities are like a shared library card that works across multiple branches (resource groups), while system-assigned is a single-use card locked to one branch. For the exam, think “user for sharing, system for single.”
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.
Three application VMs in different resource groups must use the same Azure identity to read blobs from a storage account. The identity must continue to work if the VMs are redeployed. What should you use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
A user-assigned managed identity
A user-assigned managed identity is the correct choice because it is a standalone Azure resource that can be assigned to multiple VMs across different resource groups. It persists independently of the VM lifecycle, so it continues to work even if the VMs are redeployed, and it can be used to authenticate to Azure Storage for blob read operations via Azure AD.
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 on each VM
Why it's wrong here
Each system-assigned identity is tied to one VM instance, so it is not a shared identity.
✓
A user-assigned managed identity
Why this is correct
A user-assigned managed identity can be attached to multiple VMs and survives VM redeployment.
Related concept
Read the scenario before looking for a memorised answer.
✗
A shared access signature stored in a configuration file
Why it's wrong here
A SAS token is a secret credential and is not a durable managed identity for multiple VMs.
✗
The local Administrator account on each VM
Why it's wrong here
Local accounts do not provide a shared Azure identity and would require separate credential management.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often choose a system-assigned managed identity (Option A) because they assume it can be shared, but it is per-resource and cannot be assigned to multiple VMs across resource groups.
Detailed technical explanation
How to think about this question
User-assigned managed identities are created as Azure resources and can be assigned to multiple Azure VMs via the VM's identity property. Under the hood, Azure automatically rotates the identity's service principal credentials, and the VM uses the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) to obtain an access token for Azure AD, which is then used to authenticate to the storage account via OAuth 2.0. This approach ensures that the identity remains valid even if the VMs are redeployed, as the identity resource itself is not deleted.
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.
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: A user-assigned managed identity — A user-assigned managed identity is the correct choice because it is a standalone Azure resource that can be assigned to multiple VMs across different resource groups. It persists independently of the VM lifecycle, so it continues to work even if the VMs are redeployed, and it can be used to authenticate to Azure Storage for blob read operations via Azure AD.
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
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. An App Service application needs to read secrets from Azure Key Vault. The security team does not want any password, certificate, or client secret stored in application settings, and they want the identity removed automatically if the app is deleted. What should the administrator enable?
medium
A.A service principal with a client secret stored in App Service configuration.
✓ B.A system-assigned managed identity on the App Service.
C.A user-assigned managed identity shared by all applications.
D.A shared access signature stored in Key Vault.
Why B: A system-assigned managed identity (Option B) is the correct choice because it provides an identity for the App Service that is automatically managed by Azure, tied to the lifecycle of the resource (deleted when the app is deleted), and requires no credentials to be stored in application settings. This allows the app to authenticate to Key Vault using Azure AD tokens without any secrets, satisfying the security team's requirements.
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Question Discussion
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