- **System-assigned**: This managed identity is suited for initial testing or small deployments. When used at scale, for example, for all VMs in a subscription, it results in a substantial number of identities created (and deleted) in Azure Active Directory. To avoid this churn of identities, use user-assigned managed identities instead. *For Azure Arc-enabled servers, system-assigned managed identity is enabled automatically* as soon as you install the Azure Arc agent. It's the only supported type for Azure Arc-enabled servers.
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