Federation Services (AD FS) allows secure sharing of identity information between business partners across an extranet using a claims-based system and policies. It provides single sign-on, support for web services and claim mapping, and centralized management of federated partners. AD FS uses proxies, servers, and databases to authenticate users and issue tokens to grant access to applications across organizational boundaries. Certificates are required for token signing, server communication, and SSL to secure traffic between AD FS components.