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Microsoft's federation work began in 2003 with the release of Active Directory Federation Services (ADFS) 1.0 when Windows Server 2003 R2 was also released. More recently, in 2010 the company upgraded to AD FS 2.0, and added support for the popular SAML protocol.
Federation services are often used as part of an identify infrastructure, as they allow the use of Single Sign-On (SSO) functionality for cloud-based services. Microsoft's own internal production federation services are an excellent example of how a large corporation handles SSO.