In Microsoft identity and access management terminology, federation refers to the establishment of a trust relationship between identity providers, which enables single sign-on (SSO) across different organizations or platforms.

According to the Microsoft Security, Compliance, and Identity (SCI) learning path, particularly in the SC-900 and SC-300 certifications, the following definition is provided:

“Federation is a means of establishing trust between two identity systems. This trust allows users from one domain to access resources in another domain without needing to authenticate again, typically using SAML, WS-Federation, or OAuth protocols.”

This concept is essential in cross-organization SSO scenarios, such as enabling users from one enterprise (or identity provider) to authenticate with services hosted in another, using existing credentials.

SCI documentation further states:

“Single sign-on (SSO) between multiple identity providers is enabled through federation protocols, which delegate authentication and allow token-based identity propagation across systems.”

The other options are not accurate in this context:

Integration is a vague term and not specific to SSO configuration.

Password hash synchronization and pass-through authentication are Azure AD authentication methods used for hybrid identity with on-premises AD, not for federating with external identity providers.

✅ Therefore, SSO configured between multiple identity providers is best classified as an example of federation.