Microsoft Security, Compliance, and Identity Fundamentals SC-900 Practice Question

A managed identity is created by Azure and associated directly with an Azure resource such as a virtual machine. Azure automatically provisions the underlying service principal and rotates its credentials, so developers never handle secrets. Device identities represent the hardware itself for management purposes, not for application-level authentication. Member user identities are interactive human accounts and still require managing credentials. An application service principal can let software authenticate, but its secrets or certificates must be created, stored, and rotated by administrators. Therefore, the managed identity best meets the requirement to avoid stored credentials while allowing the VM to access Azure SQL Database.