User-assigned managed identities enable shared Microsoft 365 automation
System-assigned managed identities offer simple authentication for Azure Automation runbooks that call Microsoft 365 PowerShell SDK cmdlets, but they remain bound to a single automation account and are deleted with it. User-assigned managed identities exist as independent Azure resources that can be shared across multiple automation accounts, Logic Apps, Function Apps, or virtual machines, making them preferable when workloads span subscriptions or cost centers. Creation occurs in the Azure portal by selecting a subscription, resource group, name, and region; the resulting identity exposes a client ID for authentication and an object ID for permission grants.
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