Identity Providers – An Overview of Their Roles and Functions

IdPs make authentication easier and improve the security of different applications and services. But how exactly do they work?

Feb 24, 2023 - 2 min.

Identity providers (IdPs) are key components of modern IT systems because they allow users to authenticate themselves once and then access multiple applications and services without having to re-confirm their identity each time. As central providers of user identities, IdPs play a vital role in guaranteeing the integrity and security of sensitive data. This article takes a closer look at the functionality of IdPs, their importance for single sign-on (SSO) systems and their advantages.

IdP stands for ‘Identity Provider’ and describes a component or system that provides and verifies user identities to enable access to other applications and services. It is a central component of single sign-on (SSO) systems and is responsible for checking the authenticity of users.

But how do identity providers work?

As a general rule, identity providers operate according to the single sign-on (SSO) principle. In this context, IdP systems act as a central authentication point where users log in by entering one or more factors such as a username, a password, biometric data (fingerprint, iris scan) or one-time codes. They can then access multiple applications and services without having to log in again each time. Particularly at a time when more and more applications and services are migrating to the cloud, IdPs are considered an indispensable tool for enabling secure and convenient access to these resources. After all, users who are given the responsibility of managing their various logins tend to use the same, simpler passwords for multiple logins, which is bad news for IT security. 

Companies can either provide their IdPs themselves or purchase them from third-party providers. In-house services give companies control over the management of user identities and access to protected resources but impose a greater administrative burden. Third-party providers frequently offer simpler management and integration into existing systems but involve a degree of reliance on an external provider.

IdPs operate as follows:

  1. In the first step, the user tries to access a protected application or service.
  2. The application or service then transfers the user to the IdP with which it is integrated.
  3. The IdP then carries out the authentication process by checking the user’s login information.
  4. Following successful authentication, the IdP generates a secure token confirming that the user is authenticated.
  5. The token is forwarded to the application or service, which uses it to authenticate the user and grant them access to the protected resources.

How identity providers can simplify the login process and improve security

We generally recommend outsourcing the authentication process to specialist providers because this offers several advantages. Ultimately, digital identities and their associated authentication features are highly sensitive data. Such information must therefore be handled with a great degree of care – which calls for technical and procedural expertise in IT security and privacy protection. Not all service providers can offer this expertise to the extent required. This is a job for specialised IdPs, which offer secure and redundant management of all identity and login information. They are responsible for verifying user identities and use a range of authentication processes to ensure that only authorised users can access the applications and services.

Furthermore, IdPs offer authentication for several applications and services. This allows companies to save time and money that would otherwise be necessary to set up and administer authentication systems for each application and service. Centralised administration not only makes it easier to manage and update user accounts but also provides a better user experience because users only have to log in once to access multiple services and applications.

The solutions for SSO 

Portal solutions provide users with one central login for access to different applications and services. This can typically involve logging into an internet service in order to use email, calendar, cloud storage and other products. Successful authentication between the services is implemented with the help of cookies.

Ticketing systems rely on a single trustworthy authority for the centralised issuing of tickets. Once the user has successfully logged in, these login tickets for every connected service can be automatically created and sent.

Local SSO solutions are often used on clients that are regularly used in the workplace. In this case, access to applications and services is centrally protected by the client or by a connected network. Once a user has successfully logged into the SSO client, access is released. SSO clients are frequently integrated as password managers in web browsers.


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