Local DX for service-to-service authentication based on Managed Identities in Azure

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For our internal developer platform, we think about adopting Entra ID for service-to-service auth. This feels natural as all our services are automatically provisioned with a user-assigned managed identity. I believe we will be able to make that work.

The question to those who use it already is how do you deal with local development scenarios?

If a developer wants to locally run service A which needs to authenticate against service B (and normally uses its managed identity in Azure to do that), how to achieve that?

I can imagine some approaches, but I wonder what real-world experience folks have with managing this at scale and not compromising the security posture.

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