Microsoft 365 Certified: Administrator ExpertImplement and manage Microsoft Entra IDHard

A company uses Microsoft Entra ID for identity management. They have a custom line-of-business application that needs to access user profiles and group memberships in Microsoft Entra ID. The application runs as a background service and does not have a signed-in user. You need to grant the application the necessary permissions to access Microsoft Entra ID resources securely. What type of identity should you create and configure for this application?

  1. AA guest user account with global administrator role
  2. BA managed identity for Azure resources
  3. CA service principal with application permissions
  4. DA user account with delegated permissions
Show answer & explanation

Correct answer: C. A service principal with application permissions

For a background service application that needs to access Microsoft Entra ID resources without a signed-in user, a service principal with application permissions is the correct choice. Application permissions allow the application to act as itself, not on behalf of a user, and can be granted directly to the service principal.

Why the other options are wrong

  • A. A guest user account is for external collaborators, and assigning a Global Administrator role is a severe security risk and inappropriate for an application.
  • B. Managed identities are for applications running on Azure resources (e.g., Azure VM, App Service), not for general custom line-of-business applications that might run anywhere.
  • D. Delegated permissions require a signed-in user account to act on behalf of that user, which is not suitable for a background service without a user.

Service Principal for Applications

A security identity that represents an application in a specific Microsoft Entra tenant. It defines what the application can do in that tenant, which users can access it, and what resources it can access.

  • Represents the application itself, not a user.
  • Used for applications that need to authenticate and access resources without a user context (e.g., background services, daemons).
  • Permissions granted to a service principal are 'application permissions'.
  • Each application has one application object (global) and one or more service principals (tenant-specific).

Memory trick: Service Principal: Service Power, No User Required.

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