For REST API monitoring in Oracle Cloud Compute VM, do we need to install the Oracle Cloud Agent?

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I need to monitor the Oracle Cloud Compute VM using REST API's or Java SDK. So for REST API monitoring do we need to do any set up in VM?

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No, you don't need any set up inside the VM, but you do need the API users to be authorized in a IAM policy.

For example with a policy like this (for just reading the metrics):

Allow group <api_users> to read metrics in tenancy

Then you can use the APIs here.