Note: Users in Microsoft 365 can use their Microsoft Entra credentials to authenticate to third- party SaaS applications through the Microsoft Entra enterprise application feature. This is achieved by configuring the SaaS application to use Microsoft Entra ID as its identity provider and enabling single sign-on (SSO).
Reference:
https://learn.microsoft.com/en-us/microsoft-365/enterprise/integrated-apps-and-azure-ads