What Is Active Directory Federation Services (AD FS)? Working, Components, Versions, Importance, and Challenges

• Active Directory Federation Services (AD FS) is defined as an identity and access management (IAM) solution by Microsoft that enables seamless single sign-on (SSO) across organizational boundaries and on-premise and cloud applications.
• AD FS leverages Active Directory as its identity store and allows secure access to enterprise applications, regardless of the user’s network or domain location.
• This article covers the working, components, versions, importance, and challenges of AD FS.

What Is Active Directory Federation Services (AD FS)?

Active Directory Federation Services (AD FS) is an identity and access management (IAM) solution by Microsoft that enables seamless single sign-on (SSO) across organizational boundaries and on-premise and cloud applications.

Today’s IT landscape prioritizes the role of IAM tools. With the rise of remote work and ever-present cybersecurity threats, enterprises increasingly rely on a mix of legacy and cloud-based solutions to ensure secure and flexible operations.

Microsoft’s AD FS addresses these needs. AD FS is an add-on feature for the Windows Server operating system designed to extend single sign-on (SSO) access beyond the enterprise firewall and across organizational boundaries. This extension of SSO access enhances the end-user experience while giving IT administrators greater control over user accounts across both in-house and third-party applications.

AD FS serves as Microsoft’s on-premises SSO solution. It can authenticate users into applications incompatible with Active Directory (AD) or Integrated Windows Authentication (IWA). Its functionality offered significant development opportunities during the software as a service (SaaS) boom at the turn of the millennium, a time when Microsoft was a dominant force in the IT industry and most organizational applications were Windows-based and on-premises.

The introduction of AD FS addressed authentication challenges for applications outside the Windows ecosystem and beyond organizational perimeters. The secure sharing of identity information outside company networks was now possible, thus enabling access to web-facing resources such as web apps hosted by trusted partner organizations.

Simply put, AD FS allows enterprises to establish “trust relationships” with each other over a network, such as the internet. It complements AD by extending on-premises identities to cloud-based environments.

Technically speaking, AD FS supports various protocols and token types, including Secure Assertion Markup Language (SAML), OAuth, and OpenID Connect. Its operations are functionally similar to any web application-based SSO service that uses SAML. While AD FS can use cookies and other token standards like JSON Web Tokens (JWT) for authentication services, it is primarily utilized in on-premises setups. It is worth noting, however, that AD FS can also be used in cloud-based environments, especially when extending on-premises identities to cloud applications. AD FS is a critical tool in modern IT, combining legacy systems and evolving enterprise needs.

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How Active Directory Federation Services Work

The Microsoft Active Directory (AD) system stores usernames and passwords to manage and secure access to computers within Windows domains. It also offers single sign-on (SSO) access to corporate applications. Microsoft built upon this foundation by developing AD FS to authenticate users on third-party systems, such as a service hosted by a cloud provider or an extranet of a partner company.

AD FS uses SSO to authenticate users across different yet related web applications during a single online session. It shares users’ identity and access rights, known as claims, across enterprise security boundaries. When users attempt to access a specific web application from a trusted business partner, also called a federation, their organization authenticates the user’s identity information via claims to the web application host. The host can then take a call on authorization based on the claims presented.

In the context of AD FS, partner enterprises can establish an identity federation by confirming trust between two security realms. A federation server within one organization authenticates a user through standard Active Directory Domain Services (AD DS). The AD DS then issues a token containing a series of claims about the user, including their organizational identity.

On the resource side of the organization, another federation server validates these tokens and issues another token that allows local servers to accept the claimed identity. This process enables the system to provide controlled access to its resources without requiring the user to authenticate directly to the application. This mechanism showcases the efficiency and security offered by AD FS in managing user access across multi-enterprise networks and applications.

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Components of AD FS

As established above, AD FS is crucial to Microsoft’s identity and access management (IAM) solutions suite. It empowers enterprises to broaden IAM beyond the perimeters of enterprise security. Business users leverage AD FS for a streamlined single sign-on (SSO) experience when accessing web-based applications internally and externally.

AD FS is composed of several components that collectively enable federated identity management. Let’s learn more about them.

1. Federation service

This core component of AD FS manages authentication requests and generates security tokens. When a user wants to access a protected resource, the federation service component authenticates them and issues a token embedded with claims about the user’s identity. The resource then uses these claims to make authorization decisions. The federation service ensures the secure representation of user identities in tokens and must, therefore, be protected with measures such as high availability and disaster recovery.

2. Federation service proxy

The federation service proxy acts as a channel for the federation service, facilitating secure access from outside the corporate network. Typically deployed in a perimeter network or demilitarized zone (DMZ), this component ensures that authentication requests from external users are correctly routed to the federation service without directly exposing the service to the internet. This extends the reach of AD FS to external users, enabling B2B and B2C interactions.

3. Claims provider

This component authenticates users and issues claims, packaged into tokens the federation service uses to assert the user’s identity to the application. A claims provider can be an Active Directory, an AD FS instance, or another claims-based identity provider. It provides flexibility in authentication methods and the types of claims that can be issued, supporting a broad spectrum of identity solutions. Configuring the claims provider to issue the appropriate types of claims for each application can be complex because of diverse application requirements.

4. AD FS web server

The AD FS web server is responsible for hosting the web-based interfaces and protocols necessary for AD FS operations. This component provides the endpoints that external entities, such as users or other federation services, interact with. These include endpoints for token issuance, artifact resolution, and metadata exchange. The AD FS web server simplifies the process for developers to build SSO-enabled applications. Maintaining the AD FS web server involves staying current with updates and patches to ensure security and compatibility with various web applications.

5. AD FS configuration database

Finally, the AD FS configuration database stores all configuration data for an AD FS instance, including trust relationships, certificate data, and service endpoints. Depending on the use case, this component can be hosted on SQL Server or Windows Internal Database. The configuration database ensures the integrity and consistency of the federation environment, centrally managing and disseminating configuration changes. Regular backups and performance monitoring of the AD FS configuration database are essential, especially in large-scale deployments.

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AD FS Versions

AD FS has evolved significantly over the years, with each version introducing new features and enhancements to meet the growing demands of modern enterprises.

Let’s explore the different versions of AD FS, their key improvements over the previous versions, and how they contribute to a more secure and seamless experience for end users.

1. AD FS 1.0 and AD FS 1.1

AD FS 1.0 was the inaugural version of Active Directory Federation Services. Initially available as a downloadable component for Windows Server 2003 R2, this version laid the groundwork for the service by providing basic single sign-on (SSO) capabilities.

AD FS 1.1 was introduced along with the Windows Server 2008 and Windows Server 2008 R2 release. This version was included as a role that could be installed from the Server Manager and retained the fundamental SSO functionality established by its predecessor.

However, both AD FS 1.0 and AD FS 1.1 faced some compatibility issues with non-Microsoft Federation Services, primarily around interoperability. Microsoft addressed these compatibility problems in subsequent versions of AD FS, allowing the solution to interact more effectively with a wider range of WS- and SAML 2.0-compliant federation services.

2. AD FS 2.0 and AD FS 2.1

AD FS 2.0 was introduced as a free download from Microsoft for installation on Windows Server 2008 and Windows Server 2008 R2. This version introduced several new features and improvements over AD FS 1.0 and AD FS 1.1.

AD FS 2.1 was included with Windows Server 2012. This upgrade brought with it minor changes compared to AD FS 2.0. The most notable difference was its integration into the operating system, eliminating the need for a separate download.

One of the key enhancements in AD FS 2.0 and 2.1 was the support for web access across domains. This feature enabled child domain users to access AD FS in a different domain across platforms (PC, mobile, etc.), making the solution more versatile and user-friendly.

Another key improvement was the enhancement of federation trust support, meaning AD FS could now work more effectively with non-Microsoft Federation Services. This measure eliminated the compatibility issues encountered in earlier versions. In addition, the management interface saw improvements and made it simpler for users to manage Federation Services.

However, certain features were removed in AD FS 2.0 and 2.1. The Active Directory Lightweight Directory Store (AD LDS) account store, which was earlier used for authentication, was no longer supported for this use case. While AD LDS could still be used as an attribute store to hold data for AD FS, it could not be used for user authentication.

The Windows NT Token-based web agent, which earlier allowed the use of old Windows NT tokens, was also discontinued. This change was made to support modern and more secure authentication methods.

Lastly, while an in-place upgrade from AD FS 1.0 to AD FS 2.0 was supported, there was no direct upgrade path from AD FS 2.0 to AD FS 2.1. This prompted users to plan and execute upgrades to AD FS installations carefully.

3. AD FS 3.0

AD FS 3.0 played an integral role in Windows Server 2012 R2.

One of the notable features of this AD FS version is Workplace Join, which enables mobile devices to join domains. While this feature does not support all the functionality of a full domain join, such as group policy, it does register the device in Active Directory. It gives administrators control over which devices are added. This is particularly useful for external contractors who need access to certain files but do not require full domain functions.

AD FS 3.0 also introduced enhanced tools for access control risk management. This suite of features helps secure AD FS clients by simplifying the disabling of remote devices and ensuring the need for valid credentials when accessing certain applications. It no longer leverages Internet Information Services (IIS); a separate role is now operated, and additional roles are not required for installation.

Further, the user interface in AD FS 3.0 supports the configuration of SQL servers, simplifying their configuration process when used with Active Directory Federation Services.

AD FS 3.0 also supports Group Managed Service Accounts. These accounts are controlled by Active Directory and can be created in the install wizard for use with AD FS. Unlike regular managed services accounts, Group Managed Service Accounts can easily be used on multiple servers.

Finally, AD FS 3.0 replaced the Federation Service Proxy component with the Web Application Proxy. This component is now found in the Remote Access role rather than the Federation Service role. Additionally, the web agents, which provided compatibility between AD FS and other systems, have been removed in this version. Users must ensure their configurations before this version do not require web agents before initiating an upgrade.

4. AD FS for Windows Server 2016

AD FS in Windows Server 2016 introduces enhancements for secure application access for users and IT administrators. Here are some key features and improvements that make AD FS 2016 a vital component for modern enterprise security and access management.

Simplified and secure access

AD FS 2016 streamlines access control and single sign-on (SSO) across various platforms, including Office 365, cloud-based SaaS applications, and on-premises applications. For IT administrators, this means managing access with unified credentials and policies for both modern and legacy systems. Users enjoy a consistent sign-on experience using familiar credentials, while developers can easily integrate authentication into their applications without handling complex identity management.

Passwordless authentication options

AD FS 2016 introduces three new options to eliminate passwords for extranet access, reducing the risk of compromised credentials:

1. Azure Active Directory Multi-Factor Authentication (MFA): Users can log in using only an MFA code from the Azure Authenticator app.
2. Passwordless Access for Compliant Devices: Users can authenticate using device credentials, with compliance checks ensuring that only managed and compliant devices can access sensitive resources.
3. Windows Hello for Business: Eligible Windows users can use biometrics or a PIN for secure, password-free access to AD FS applications from any location.

Enhanced access control policies

AD FS 2016 simplifies the configuration of access control policies with built-in templates. Administrators can now apply common policies without needing to understand complex claim rules language. These templates can be customized through a wizard-driven process, allowing for consistent policy enforcement across multiple applications.

Improved sign-in

The customization capabilities in AD FS 2016 allow administrators to tailor sign-in pages with specific messages, images, logos, and themes for different applications. This personalization improves user engagement and brand consistency.

Advanced security and compliance

AD FS 2016 supports more secure authentication protocols and streamlined auditing, the latter reducing the verbosity of audit logs and simplifying the tracking of sign-in and token issuance activities. The improved support for SAML 2.0 enhances AD FS’s interoperability, enabling participation in federations like InCommon. Federated Microsoft 365 users enjoy simplified password management, with AD FS notifying users in case of impending password changes.

Simplified migration

Finally, upgrading from AD FS in Windows Server 2012 R2 to 2016 is made more straightforward. Administrators can add Windows Server 2016 servers to an existing 2012 R2 farm, allowing the farm to operate at the 2012 R2 functional level. Once all nodes are upgraded, the farm behavior level can be enhanced to 2016.

5. AD FS for Windows Server 2019

AD FS in Windows Server 2019 brings updates to improve security, authentication flexibility, and user experience. Let’s examine the key features and changes in this version of AD FS.

Enhanced sign-in security

AD FS 2019 allows third-party authentication solutions to serve as the primary authentication method. Users can initially authenticate without exposing passwords. The external provider can claim MFA status to boost security if it supports multi-factor authentication.

Passwords for extra authentication

Unlike previous versions, AD FS 2019 supports using passwords only as an extra factor after a passwordless authentication method has been used first. This simplifies the setup process, removing the need for additional adapters.

Pluggable risk assessment module

The new pluggable risk assessment module allows enterprise IT teams to create custom plug-ins to block risky sign-ins during pre-authentication. This feature simplifies using cloud intelligence features like identity protection to enhance security by preventing access from risky users or transactions.

Extranet Smart Lockout (ESL) enhancements

AD FS 2019 builds on ESL from previous versions by allowing customers to be in audit mode while still protected by classic extranet lockout functionality. It also introduces independent lockout thresholds for familiar locations, minimizing disruptions during password rollovers.

Security enhancements

Security enhancements include Remote PowerShell Using SmartCard Sign-In, wherein administrators can remotely manage AD FS via PowerShell using SmartCards to provide a secure method for performing administrative tasks like multi-node cmdlets. They also include HTTP Header Customization, where customization of HTTP headers in AD FS responses is allowed. The customization functionality extends to headers like HSTS for HTTPS enforcement and x-frame-options for controlling iFrame embedding for AD FS sign-in pages, enhancing security and compliance.

Apart from this, key features of AD FS for Windows Server 2019 include Specific Authentication Methods Per Relying Party, Restrictions on TLS-Based Device Authentication, and MFA Freshness Support.

Single Sign-On (SSO) improvements include Paginated User Experience with Centered Theme and a bug fix regarding the Persistent SSO state for Windows 10 Devices when Primary Refresh Token (PRT) is in progress.

Finally, support for creating modern line-of-business apps, improvements in supportability and deployment, and SAML updates enhance user experience in this version.

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Importance of Active Directory Federation Services

AD FS is crucial for modern enterprise environments. In essence, it acts as a bridge between an internal enterprise network and external services, enabling secure access to both on-premises and cloud applications. This important tool gives organizations the power to enhance their identity and access management strategies.

The important benefits of AD FS include:

1. Federated Identity Management, which is organizations leveraging AD FS to share digital identities with trusted partners. Authenticated users can seamlessly access resources across security and enterprise boundaries.
2. Single sign-on (SSO) capabilities are extended beyond specific domains to enable users to access multiple applications with just a single set of credentials.
3. Security is enhanced due to the centralization of the authentication process. For instance, AD FS reduces the risk of credential exposure across multiple platforms.
4. Seamless experience for end users, as AD FS enables streamlined access to applications without needing to reauthenticate frequently. This boosts work efficiency and minimizes distractions.
5. Interoperability is improved as AD FS supports standard protocols like SAML 2.0 and WS-Federation, making it compatible with a wide range of applications and services.
6. Finally, for IT professionals, the solution shifts the focus from maintaining account information for every web platform employees use to more critical projects.

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AD FS Limitations

AD FS is a powerful solution with numerous benefits, but it has certain limitations.

A significant drawback of AD FS is its high maintenance costs. These are not limited to the upkeep of the infrastructure but also extend to managing multiple federations and the expenses associated with SSL certificates.

Another challenge with AD FS is its complexity. Integrating an application or system with AD FS can be complicated and resource-intensive. Moreover, AD FS lacks a user-friendly management dashboard, making managing groups, authentication policies, and users challenging. This can lead to increased administrative overhead and delays in system deployment.

Finally, security concerns are a limitation of AD FS. Since AD FS operates on Windows Server, it is prone to the same security vulnerabilities as any other Windows-based system. These include vulnerability to malware and other security threats, which can pose significant risks to system integrity. However, security measures like multi-factor authentication can be implemented to overcome these concerns.

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Takeaway

Active Directory Federation Services (AD FS) is critical for secure and seamless identity management in modern enterprises. Despite its challenges, AD FS remains a pivotal tool for managing authentication and access control, ensuring both security and user convenience in today’s interconnected digital landscape. Enterprises can leverage this solution to provide robust single sign-on (SSO) capabilities and secure access to resources across different organizational platforms.

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