Always prioritize modern identity-based authentication methods over traditional username/password credentials. This improves security by reducing credential exposure and management overhead.

Specifically:

This approach eliminates the need to store and manage sensitive credentials in your code or configuration files, reducing the risk of credential leakage.

Example implementation for using managed identity with a client factory:

// Configure the client factory to use managed identity
builder.Services.AddAzureClients(clientBuilder =>
{
    // Using managed identity as a federated identity credential
    clientBuilder.UseCredential("managedidentityasfederatedidentity")
        .ConfigureDefaults(azureDefaults =>
        {
            azureDefaults.Authentication.ManagedIdentityClientId = "your-client-id";
        });
});

When creating services like HDInsight clusters, prefer specifying Entra User as the administrator credential rather than username/password combinations.