Single Sign-On (SSO) vs. Federated Identity Management (FIM) - The Key Differences

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Whether it is a social media site, an online game, or even a banking app - registering to any platform generally necessitates the determination of a new password. To diminish the risk of higher-scale data breaches, this set of login credentials should not be reused across multiple platforms. But is it realistic to anticipate individuals to remember each distinctive password for their conceivably dozens of virtual identities?

In recent years, numerous businesses have implemented solutions like federated identity management (FIM) and single sign-on (SSO) to enhance authentication process security while minimizing password fatigue. While both of these tools aim to facilitate access to resources, they present two distinct approaches to identity and access management (IAM) that differ in scope and complexity.

This article discusses the difference between Federated Identity Management (FIM) and Single-Sign-On (SSO) and their respective uses.

SSO Illustration

What is Single-Sign-On (SSO)?

Single-Sign-On (SSO) is a mechanism that enables you to delegate end-user account creation and administration to a centralized Identity Provider (IdP), thus allowing users to access multiple resources within the same organization with a single login process seamlessly. Though the same server manages these individual accounts, they are still entirely separate from each other: For instance, Google only requires its users to authenticate once with the central identity provider to access multiple resources, such as YouTube, Gmail, and Drive.

One of the most significant advantages of SSO is that it improves business security by lowering the number of passwords that users must manage. To achieve this, SSO relies on authentication protocols, such as Security Assertion Markup Language (SAML) and OpenID Connect (OIDC), which enable users to authenticate once with a central identity provider and then access multiple resources without having to re-enter their credentials. Furthermore, unlike it is used to be the case within an enterprise setup, applications with an SSO feature only receive authentication tokens instead of the credentials themselves. Thus, the leakage of passwords/credentials to compromised applications/services can be prevented.

Since passwords are a common attack vector, lessening dependence on them minimizes the possibility of data breaches and social engineering attacks.

What is Federated Identity Management (FIM)?

Federated Identity Management (FIM) connects identity management systems by establishing a trusted relationship between different organizations, allowing them to utilize the same digital identity to access all their applications and networks (single access). The reason behind its development was to enable entities on one domain to access user information held in other domains.

The enterprises are linked via third-party identity providers that store their credentials. Furthermore, FIM enables the safe transfer of authentication and access information between domains by relying on robust security protocols such as SAML and OpenID Connect (OIDC), akin to SSO. Accordingly, users are provided with a secure and streamlined login experience, while allowing the respective organizations to retain control over user authentication and authorization.

A real-life example of FIM is using Facebook credentials to log into several services federated with Facebook, such as Instagram, Netflix, and Disney+.


It goes without saying that Single Sign-On and Federated Identity Management seem relatively similar at first glance: They both simplify authentication for consumers and businesses by merely requiring a single set of credentials to access various resources. In fact, they can even be used jointly because FIM significantly relies on SSO technology to authenticate users across domains.

So, since FIM can technically give us SSO as well, it should be a no-brainer for every company to deploy FIM, right? Not necessarily.

Despite their similarities, the two approaches operate in quite different ways and have unique applications. To assist you in determining which technique's implementation would suit your organization better, the following paragraphs showcase the most notable distinctions between SSO and FIM.

Range of Access and Scalability

The most prominent distinction between the two mechanisms is their range of access. While both approaches allow users to access a plethora of resources through a single login procedure, in the case of SSO, this admission only pertains to a specific organization or a set of related organizations. On the other hand, identity federation takes a step further by allowing access across various organizations and domains within the federated group.

SSO's smaller range of access may also pose a scalability challenge for businesses that use a diverse set of apps and platforms. Thus, switching to a federated identity provider would enable users to access their employers' entire array of services, provided they support identity federation.

Complexity and Cost

Given its significantly broader range of access, it is no surprise that FIM solutions are generally more complex and costly to operate. They require managing more resources and may require specialized expertise to implement and maintain. Additionally, FIM necessitates the establishment of trust relationships among various identity providers.

Ultimately, both of these attributes highly depend on the size of your organization, the number of applications you wish to integrate, and the specific requirements of your security and compliance policies - neither FIM nor SSO comes with a predefined price tag.


Due to their diverse built-in security integrations, both SSO and FIM are highly secure mechanisms for protecting personal data. However, one contentious aspect of SSO stems from its reliance on a single identity provider: Accordingly, if the IdP suffers a security compromise, it may impair access to numerous resources and applications as a result. In the case of federated identity management, the user credentials are not stored in a centralized location; thus, the danger of a single breach compromising all accounts is lower.

However, it is worth noting that most SSO vendors enforce strict security policies to ensure the password is as safe as possible, such as giving it an expiration date or locking the account after some failed login attempts.

In Conclusion

Ultimately, the decision to implement Federated Identity Management or Single Sign-On should be based on your company's specific characteristics. For instance, companies that use a limited number of apps and services may find SSO a more suitable fit. In contrast, FIM is often preferred in larger enterprises with several identity providers and service providers or when cross-organizational collaboration is required.

Whether you wish to deploy SSO or FIM, with ZITADEL as your organization’s authentication solution, both options are well accounted for. You may implement our SSO feature or utilize our JSON Web Token Identity Provider (JWT IDP) to use an (existing) JWT as a federated identity.

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