As a concept, federation encompasses both identity federation and provider federation.
In one dictionary, identity is defined as ”a set of information by which one person is definitively distinguished.” This information undoubtedly begins with the document that corroborates a person's name: a birth certificate. Over time, additional information further defines different aspects of an individual's identity. The composite of this data constitutes an identity with each specific piece providing a distinguishing characteristic. Each of the following represents data that designates a piece of a person's identity as it relates to the enterprise for which the data was defined.
A telephone number
One or more diplomas
A driver’s license
Financial institution accounts
Because the Internet is now one of the primary vehicles for the types of interactions represented by identity-defining information, people are creating online identities specific to the businesses with which they are interacting. By creating a user account with an identifier and password, an email address, personal preferences (such as style of music, or opt-in/opt-out marketing decisions) and other information specific to the particular business (a bank account number or ship-to address), a user is able to distinguish their account from others who also use the enterprise’s services. This distinguishing information is referred to as a local identity because it is specific to the service provider (a networked entity that provides one or more services to other entities) for which it has been defined. Sending and receiving email, checking bank balances, finalizing travel arrangements, accessing utility accounts, and shopping are just a few online services for which a user might define a local identity. If a user accesses all of these services, many different local identities have been configured. Considering the number of service providers for which a user can define a local identity, accessing each one can be a time-consuming and frustrating experiencing. In addition, although most local identities are configured independently (and fragmented across the Internet), it might be useful to connect the information. For example, a user's local identity with a bank could be securely connected to the same user's local identity with a utility company for easy, online payments. This virtual phenomenon offers an opportunity for a system in which users can federate these local identities. Identity federation allows the user to link, connect, or bind the local identities that have been created for each service provider. The linked local identities, referred to as a federated identity, allow the user to log in to one service provider site and click through to an affiliated service provider without having to reauthenticate or reestablish identity; in effect, single sign-on (SSO).
Provider federation begins with a circle of trust. A circle of trust is a group of service providers who contractually agree to exchange authentication information. Each circle of trust must include at least one identity provider, a service provider that maintains and manages identity data, and provides authentication services. After the business contracts and policies defining a circle of trust are in place, the specific protocols, profiles, endpoints, and security mechanisms being used by each member is collected into a metadata document that is exchanged among all other members of the circle. OpenSSO Enterprise provides the tools necessary to integrate the metadata and enable a circle of trust technologically. Authentication within this federation is honored by all membered providers.
The establishment of contractual trust agreements between providers is beyond the scope of this guide. See The Concept of Trust for an overview.