Definition of terms:
Federation (also: identity federation) refers to a trust relationship between several independent identity sources. It enables users to log in securely across organizational boundaries without having to create a new account.
How does federation work?
Federation is based on open standards such as SAML, OpenID Connect, and OAuth 2.0. These protocols enable the secure exchange of identity and authorization information between the participating systems.
There are two roles:
- Identity provider (IdP): Performs authentication (e.g., Azure AD, Google, Ping Identity)
- Service Provider (SP): Trusts the IdP and grants access to applications or resources based on that trust.
The connection between IdP and SP is configured in advance and is based on mutual trust, hence the term "federation" ("association," "alliance").
Advantages of federation
- Single sign-on (SSO) across system boundaries
Users only need to authenticate once and gain access to multiple federated services without having to log in to each system again.
- Less password chaos
Users only need one set of login details, which reduces forgotten passwords, simplifies usage, and increases security.
- Lower administrative costs
Organizations save on duplicate user maintenance: External identities (e.g., from partners or customers) can be reused without having to create separate accounts.
- Improved collaboration with partners and suppliers
Trusted authentication via federations simplifies access for external parties, for example in projects, supply chains, or shared platforms.
- data protection compliance
Since identity data does not need to be stored or synchronized multiple times, GDPR-compliant processing is easier to implement.
- Uniform safety standards
Within a "federation," coordinated authentication and trust levels ("circle of trust") apply, which reduces security gaps and creates a common level of security.
Conclusion:
Federation enables secure and user-friendly logins across systems and company boundaries without additional user management.