We are looking into implementing XDB for a solution which was recently upgraded to Sitecore 9.0.1 from Sitecore 8.2.2, and has a custom SSO login functionality already implemented, for user authentication on the website.
The requirement is to capture customized data coming from the Authenticating application, and store it for the identified contact in Sitecore, to give a consolidated information view for business users for the identified contact.
We were informed that Federated Authentication is somewhat a must for enabling XConnect and XDB for a solution. Which got us looking into it, and it seems it is a way Sitecore enables authentication for both Experience Manager and Website to be carried out using 3rd Party authentication providers using OWIN. This being said, contact identification and analytics tracking can be carried out without it, considering we already have a custom SSO authentication implemented.
The question we seek the answer to is, whether or not this understanding is correct. If not, then what is the dependency between the two and if it is a best practice/mandate to implement Federated authentication in order to use Sitecore Experience Manager to it's full capacity.
Thanks