In order for a resource to be represented as a map of instances rather than a list of instances, you need to use for_each instead of count:
resource "azuread_application" "main" {
for_each = { for n in var.sp_names : n => "${var.sp_prefix}-${n}" }
name = each.value
available_to_other_tenants = false
}
The for_each expression above is a for expression that transforms your list or set of names into a mapping from the given names to the prefixed names. In the other expressions in that block, each.key would therefore produce the original given name and each.value the prefixed name.
You can then similarly use for_each to declare the intent "create one service principal per application" by using the application resource's map itself as the for_each expression for the service principal resource:
resource "azuread_service_principal" "main" {
for_each = azuread_application.main
application_id = each.value.application_id
}
In this case, the azuread_application.main value is a map from unprefixed names to objects representing each of the declared applications. Therefore each.key in this block is the unprefixed name again, but each.value is the corresponding application object from which we can access the application_id value.
If your var.sp_names had a string "example" in it, then Terraform would interpret the above as a request to create two objects named azuread_application.main["example"] and azuread_service_principal.main["example"], identifying these instances by the var.sp_names values. This is different to count where the instances would have addresses like azuread_application.main[0] and azuread_service_principal.main[0]. By using for_each, we ensure that adding and removing items from var.sp_names will add and remove corresponding instances from those resources, rather than updating existing ones that happen to share the same numeric indices.