Federated Authentication vs. SSO: What’s the Difference?

December 9, 2022

Federated Authentication vs. SSO

If you’ve ever deployed a new application for your organization, you know first-hand the grumbling and security headaches that can come with it. It’s one more sign-on and password for your users to remember (or – more likely – write on a post-it and leave in their desk drawer for anyone to stumble across).

Did you know that over 40% of employees have admitted to using the same two to four passwords for all of their accounts? Even if you try to combat this with 90-day password requirements, it usually ends with numbered variations of the same password, which is a security nightmare.

So how can you combat password fatigue and poor security practices without putting the onus on your users? That’s where tools like federated authentication and single sign-on (SSO) come in. These authentication methods streamline the sign-in process and make it easier for your users to access the necessary applications and sites.

Which one is right for your organization? Read on to learn more about federated authentication vs. SSO and what implications the nuances between them have for your organization.

What Is Federated Authentication?

Federated authentication, or federated identity management (FIM), is a model of authentication developed to address an early problem of the internet where users on one domain could not access information from other domains. This was especially difficult for organizations whose operations were spread across multiple domains. It created a very disjointed and frustrating user experience.

FIM was developed as a solution to this problem. It started as a list of agreements and standards that allowed organizations to share user identities. This is the type of agreement that allows you to sign-in to Paramount Plus with your Amazon account or into Spotify with your Google account information.

But no matter where you’re signing in or with which credentials, it’s not the applications themselves that are reviewing or authenticating user credentials. Instead, an identity provider (IdP) reviews them and validates (or doesn’t). This often requires the use of open-sourced Security Assertion Markup Language like OAuth or OpenID Connect. These are open standards that allow information and authentication to transmit securely.

What Is SSO?

An SSO, or single sign-on, is an authentication method that lives under the FIM umbrella. You could think of it as a further refined version of federated identity management. As the name implies, an SSO allows you to sign into multiple applications at the same time with one sign-on.

So, for instance, if you work in HR and need access to payroll applications, the employee CRM, and your communications site/tools, an SSO would allow you to access all these tools with one login. Having a single login makes it easier to complete your job, reduces authentication overhead, and eliminates the need to involve the IT help desk for many authentication issues.

Federated Identity vs. SSO

So, when it comes down to it, the main difference between federated identity management and single sign-on is how your organization is set up:

  • SSO authenticates one credential across multiple systems within one organization.
  • FIM offers single access to multiple applications across multiple enterprises.

Think of it as freely accessing a closed system (SSO) versus gaining access to specific information across multiple open or closed systems (FIM). Therefore, while single sign-on is a specific function of federated identity management, implementing SSO doesn’t necessarily allow for FIM.

It’s the difference between using your Google account to sign into all of your streaming services (crossing company lines) and using one automatic sign-in to all of your Microsoft work apps on your computer. Both are extremely helpful in slightly different scenarios.

No matter how it’s set up, both tools play a crucial role in streamlining your user experience and shoring up your data security.


What configurations can I use with SSOs?

There are several configurations you can use with SSOs, but the most common are:

  • SAML: A Security Assertion Markup Language
  • Kerberos: A “ticket” system that allows authentication verification across various apps.
  • Social Networks: Platforms like Google or Facebook that collect and store SSO forms and allow you to sign in with verified and participating apps.

Should I use FIM or SSO?

If you are using SSO, you are already using a form of FIM. But it’s possible that you may need to use only FIM if you are exclusively working across organizational lines. If you need single sign-on for multiple apps in the same domain, SSO is the solution you should try first.

What are the benefits of federated authentication vs. SSO?

While there are differences in the tools, the benefits of FIMs and SSOs are actually very similar. They both allow you to strengthen security against data breaches, streamline employee productivity, and enhance your customer experience. And all of these benefits, in turn, lower your costs and increase your ROI.

How does FIM/SSO improve security?

Both systems strengthen security for your organization by reducing the number of passwords that your employees have to create and keep up with. The average employee is not an IT or security expert and is more likely to choose a password that’s easy to remember than one that’s truly secure.

Passwords are a very popular weak spot for hackers and phishers to attack, so anything you can do that makes your company’s passwords less vulnerable increases your security and lowers the likelihood of a cyber incident.

How does SSO lower IT costs?

Fewer passwords mean fewer tickets to the IT desk for password resets. And that means your IT team can focus on bigger issues and do more proactive work. And while you may be tempted to ask “how much time could we possibly be spending on password resets?”, this Forrester report found that large organizations often have to budget over $1 million per year for password-related support alone. 

You may not be spending $1 million annually, but even scaled down the cost savings in time and team members can be significant.

Learn More About SSO and FIM

Want to learn more about how SSO and FIM can help streamline your organization? Contact Axiad today to schedule a discussion.

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