When you sign in to a business application using your company account, there is usually more happening behind the login screen than entering a username and password. An Identity Provider (IdP) verifies who you are, while a Service Provider (SP) is the application you are trying to use. Together, they form the foundation of many Single Sign-On (SSO) setups.
Understanding the difference between an identity provider and service provider makes SSO, SAML, and identity federation much easier to understand.
What is an Identity Provider (IdP)?
An Identity Provider (IdP) is a system that authenticates users and manages information associated with their digital identities.
In practical terms, the IdP is the system that answers, “Can we verify that this person is who they claim to be?”
When a user signs in, the IdP can check their credentials, enforce multi-factor authentication, and apply other authentication policies before confirming their identity. An IdP may also connect to a directory containing information such as usernames, email addresses, groups, roles, and other account attributes.
Examples include Microsoft Entra ID, Okta, Google, and Ping Identity.
In an SSO setup, the IdP becomes the central place where authentication happens. Instead of every application maintaining its own login process, connected applications can rely on the IdP's authentication result.
What is a Service Provider (SP)?
A Service Provider (SP) is the application, website, or service that a user wants to access.
That could be a SaaS application such as Salesforce or Zoom, a cloud application, or a company's own internal business system.
The SP does not necessarily need to authenticate the user itself. Instead, it can rely on a trusted Identity Provider. When someone attempts to sign in, the SP can send the user to the IdP for authentication. Once the IdP confirms the user's identity, the SP validates the response and creates an application session.
This relationship is central to SSO: the IdP verifies the user's identity, while the SP provides the service the user wants to access.
How Do Identity Providers and Service Providers Work Together?
The relationship between an identity provider and service provider is based on trust. Both systems need to be configured to recognize one another and agree on how authentication information will be exchanged.
A typical SSO login looks like this:
Step 1 – User Requests Access to an Application
The user opens an application that has been configured for SSO. The application is the Service Provider.
If the user does not already have a valid session, the SP needs to establish whether the person has been authenticated.
Step 2 – Service Provider Redirects the User to the Identity Provider
The SP sends the user to the organization's Identity Provider.
Depending on the setup, the IdP may already know that the user has an active session. If not, it can ask the user to sign in.
Step 3 – Identity Provider Authenticates the User
The IdP checks the user's identity. This might involve a password, MFA, passkey, or another authentication method.
The IdP can also apply policies before allowing authentication to proceed. For example, an organization may require an additional verification step when a user is accessing an application from an unfamiliar device.
Step 4 – Identity Provider Returns an Authentication Response
After successful authentication, the IdP sends an authentication response back to the Service Provider.
The response contains information that allows the SP to verify that the user was authenticated by the trusted IdP. The exact format depends on the technology being used, such as SAML or OIDC.
Step 5 – Service Provider Grants Access
The SP validates the response. If everything checks out, it creates a session for the user and provides access to the application.
From the user's point of view, this can look like a simple login. Behind the scenes, the IdP and SP have exchanged information to establish trust.
This is also why a user can sign into several connected applications through SSO without entering their password separately in each one.
IdP-Initiated vs SP-Initiated Authentication
There are two common ways an SSO login can begin. The difference is simply which side starts the authentication process.
SP-Initiated Authentication
With SP-initiated SSO, the user starts at the application they want to use.
For example, an employee opens a SaaS application and selects the company's SSO option. The application sends the user to the IdP, where authentication takes place. The user is then returned to the application after successful authentication.
This approach is common when users start their work directly from individual business applications.
IdP-Initiated Authentication
With IdP-initiated SSO, the user starts from the Identity Provider, often through an application dashboard or company portal.
The user signs into the identity platform and selects an application from the list of available services. The IdP then sends the necessary authentication information to the selected SP.
This can be useful when an organization wants employees to access approved applications from a central company portal.
Authentication Standards Used by Identity Providers and Service Providers
IdPs and SPs need a common way to exchange identity and authentication information. Several standards are used for this purpose.
- SAML: An XML-based standard widely used for enterprise SSO and identity federation. It allows an IdP to send authentication information to an SP.
- OpenID Connect (OIDC): An identity layer built on OAuth 2.0. It is commonly used for authentication in modern web and mobile applications.
- OAuth 2.0: Primarily an authorization framework. It allows an application to obtain controlled access to protected resources rather than directly handling the user's credentials.
This is why SAML and IdP are not competing technologies. An IdP is a component in the identity architecture, while SAML is one of the standards that can be used to exchange authentication information between an IdP and SP.
Similarly, SSO is not synonymous with SAML. SSO describes the login experience and authentication architecture, while SAML is one technology that can support it.
Why Identity Providers and Service Providers Matter
The combination of an IdP and SP gives organizations a practical way to centralize authentication without forcing every application to manage user credentials independently.
For users, the main benefit is a simpler login experience. They can authenticate through a familiar company identity system and move between approved applications with fewer login prompts.
For IT and security teams, the arrangement provides a central point for authentication policies. When an employee leaves the organization, access can be removed from the central identity system rather than relying entirely on individual applications to be updated manually.
It also provides a foundation for combining SSO with controls such as MFA, conditional access, and other identity security measures.
Organizations evaluating centralized application authentication can explore an SSO Solution designed around this type of identity architecture.
Common Use Cases of Identity Providers and Service Providers
The identity provider service provider relationship appears in many environments.
Enterprise workforce access
A company may use Microsoft Entra ID or another IdP to authenticate employees and connect them to CRM, HR, collaboration, finance, and other business applications.
SaaS applications
A business can connect its central identity platform to SaaS applications so employees use their existing company accounts instead of maintaining separate application passwords.
Cloud applications
Cloud environments often involve services from several vendors. An IdP can provide a common authentication layer while each cloud service operates as an SP.
Partner and vendor access
Organizations may also use federation when external partners, suppliers, or contractors need controlled access to selected applications. Instead of creating an entirely separate identity system, the organization can establish a trusted relationship with another identity provider.
Customer identity
The same basic concepts can appear in customer-facing systems, although customer identity and access management (CIAM) often has different requirements from workforce identity. Customers may use an external identity provider to access applications or services without creating another set of credentials.
Conclusion
An Identity Provider (IdP) and Service Provider (SP) have different responsibilities, but they work together to make federated authentication possible. The IdP verifies the user's identity, while the SP provides the application or service the user wants to access.
This relationship is at the heart of many SSO environments. Standards such as SAML and OIDC provide ways for the two sides to exchange authentication information, allowing organizations to centralize identity management while giving users a simpler way to access their applications.
FAQs
What is the difference between Identity Provider (IdP) and Service Provider (SP)?
An Identity Provider authenticates the user and manages their digital identity. A Service Provider is the application or service the user wants to access. In an SSO setup, the SP relies on the IdP to verify the user's identity before granting access.
What is the relationship between a Service Provider (SP) and an Identity Provider (IdP) in a SAML implementation?
In a SAML setup, the SP and IdP establish a trusted relationship. The SP requests authentication, the IdP authenticates the user, and the IdP sends a SAML response containing an assertion that the SP validates before creating a user session.
What's the difference between SSO and SAML?
SSO describes an authentication experience in which users can access multiple applications after authenticating through a trusted identity system. SAML is a standard used to exchange authentication and identity information between the IdP and SP. SAML can be used to implement SSO, but SSO is not limited to SAML.
What is the difference between SAML and IdP?
SAML is an authentication and federation standard, while an IdP is a system that authenticates users. An Identity Provider can use SAML to communicate authentication information to a Service Provider.
What is an IdP in network security?
An IdP is a central system responsible for authenticating users and providing trusted identity information to applications. In network security, it can help organizations centralize authentication and apply controls such as MFA and conditional access.
What are some common Identity Providers?
Common enterprise identity providers include Microsoft Entra ID, Okta, Google, and Ping Identity. The right choice depends on the organization's existing applications, directory infrastructure, security requirements, and federation needs.
Can an Identity Provider support multiple Service Providers?
Yes. A single IdP can authenticate users for many SPs. This is one of the main reasons organizations use centralized identity systems for SSO: employees can use one organizational identity across multiple approved applications.