A system assigned managed identity enables Azure resources to authenticate to cloud services (e.g. Azure Key Vault) without storing credentials in code. Once enabled, all necessary permissions can be granted via Azure role-based-access-control.
To enable system assigned identity within a Azure VM:
1) Click the VM within Azure
2) From the left pane, click identity
3) Change status to On and click save
4) Click yes to confirm
5) Once enabled, you’ll find an additional message appears confirming what this feature will enable:
‘This resource is registered with Azure Active Directory. You can control its access to services like Azure Resource Manager, Azure Key Vault, etc.’