AWS IAM Demystified

Daan Debie / March 21, 2022

12 min read

AWS Multi-Account Strategy

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AWS IAM Demystified

All access management in AWS is done through AWS Identity and Access Management (or IAM in short). IAM provides a way to configure who can do what in an AWS account. The "who" in this case can be humans, machines/software or other AWS services.

IAM is quite complex and there are several concepts you need to understand in order to know how to give people, software and machines the right access to the right resources in your AWS Accounts. This can become complicated quite fast if you’re managing multiple AWS Accounts with many different resources and services, as explained in the previous post in this series.

In this blog post I’m going to attempt to explain the terminology in a clear and concise way. Over the past months, we worked hard at to create a good setup for our AWS-hosted infrastructure. I feel that this gave me a solid understanding of how IAM works (among other things). This blog post will help me personally as a kind of cheat sheet for later recall and hopefully be of use to others to whom these concepts are still new.

Accounts and Resources

A Resource in AWS is basically any piece of infrastructure or any AWS service you can pay for and use. This also represents the things you want to control access to. Some examples of this: EC2 servers and S3 buckets.

For all these resources, you can control who or what can access them and to what extent.

An Account in AWS is a container for resources. So it’s not a representation of a human using AWS services. In that sense, it’s quite different from the typical definition of an account in online services like Twitter or Facebook, where accounts are digital extensions of human beings.

An AWS Account is used to create, manage and pay for resources. It can be similar to an environment or project, with servers, databases, S3 buckets etc.

Even though an account does not represent a user, it still has — confusingly — a unique email address attached to it and a password to log in. This login represents the AWS account root user of an AWS account.

Identities in AWS

So if Accounts in AWS do not represent human users, how is identity established so that access can be granted to resources in AWS Accounts?

This is done through Users, Roles and Groups. All three are a form of Identity in AWS. An Identity is something that can be granted access to an AWS service or resource.

IAM Users

An IAM User represents a human that can log into AWS and/or leverage the AWS API to use AWS services and access resources on AWS. An IAM User has 2 sets of credentials:

  • Username/Password: used to log into the web-based AWS Management Console
  • Access Key/Access Key Secret: used to access AWS programmatically through the API and/or command line

Two key things to understand about IAM users:

  • a regular IAM User does not have an email address attached to it
  • IAM Users are created within a single AWS Account and (usually) only have access to resources within that account

As we’ll see later, there are special kinds of users you can create that do have an email address and can access resources in multiple AWS Accounts. These are created through AWS SSO.

IAM Users can have permissions (policies, see below) that dictate what they can and cannot do on AWS. These permissions are used to allow/deny access to AWS services and resources.

Users usually represent humans but can also represent software and machines outside of AWS that you want to give programmatic access to certain AWS services and resources through the AWS API. If you want to grant software running inside AWS access to other AWS services and resources, you can use Roles.

IAM Roles

A Role in IAM is similar to a User in that it is an Identity with permissions that determine what it can and cannot do within AWS. The difference with a User is that a Role is not tied to a specific human or machine. Instead, a role can be assumed by users or AWS services to temporarily gain access to certain AWS services and/or resources.

Roles do not have permanent login/API credentials. Instead, a role provides temporary credentials when the role is assumed.

IAM Groups

In IAM, Groups are used to group Users together so the same permissions (policies, see below) can be applied to multiple Users at once.

Granting and Denying Access: Policies

Now that we have established that we have Resources* and Identities* that can potentially access those Resources, how exactly do we determine who can access what?

This is done through Policies. In IAM, Policies are basically permissions on resources

A policy defines access (or denial) to an AWS service and/or resource. There are 2 types of policies:

  • Identity-based policy: this policy is attached to a certain Identity to allow/deny this identity access to one or more Resources
  • Resource-based policy: this policy is attached to a Resource to define access to that Resource

A policy contains the following elements:

  • Effect: should we allow or deny something?
  • Resource: what do we want to control access to?
  • Action: what action is allowed/denied?
  • Principal: who should be allowed/denied access?

The Principal is only specified in the case of Resource-based policies. That makes sense if you think about it, because in the case of Identity-based policies, the Principal is the Identity itself the policy is attached to!

Example: Identity-Based Policy

Let’s say that we want to give IAM User kiara access to read all files in the confidential-data S3 bucket. What would the Effect, Resource and Action look like for our policy? The policy would look something like this:

  "Effect": "Allow",
  "Action": [
  "Resource": [

This policy would then be attached to the IAM User kiara to grant her access.

It’s a Matter of Principal

As mentioned before, for Identity-based policies, you don’t need to specify a Principal. But what exactly is a Principal? Is it the same as an Identity? It turns out it’s more than that:

A Principal is an AWS identity or Service. To understand why services can be used as Principal, we have to understand where Principals are specified, which is in 2 places:

  • In a Resource-based policy, the principal determines who can access the resource the policy is attached to
  • In a Role, the principal determines who (what Identity) can assume the role

When specifying a Principal in a Role, we can say that instead of allowing a regular (human) User to assume the Role, we can allow an AWS Service (e.g. AWS Lambda) to assume the role for us. An example of how this can be useful: we could allow a function run on AWS Lambda to send a message on an SNS topic for us whenever something important happens during its execution. To do this, we would create a special Role for this Lambda function with a Policy attached that would allow this Role to publish messages on an SNS topic. Then we would allow AWS Lambda to assume this Role.

Resource-Based Policies

What is perhaps counter-intuitive, is that Identity-based policies are more common than Resource-based policies for defining access to resources. The common way of doing things, is to attach policies to Identities to specify what Resources they have access to and in what ways.

Part of the reason is that Resource-based policies are not supported by all services and resource-types in AWS, whereas you can use any Resource identifier in an Identity-based polity.

So in what situations are Resource-based policies being used?

Resource-based policies are often used when you want to grant an Identity outside your AWS account access to a Resource in your AWS account. To understand how this works, let’s assume the following scenario:

  • There are 2 AWS Accounts: Account A (managed by Company A) and Account B (managed by Company B)
  • Account A has a special Resource: S3 bucket secret-stuff
  • Company A wants to grant Company B access to the secret-stuff bucket
  • Company B decides that they want to use User X to access the secret-stuff bucket that Company A as granted them access to

To make this happen you have to do 2 things:

  1. Allow access from AWS Account B to a specific Resource (the secret-stuff bucket): on the aforementioned S3 bucket, we would create a Resource-based policy that has AWS Account B as principal
  2. Allow access from a specific Identity in Account B to a specific Resource in Account A: on the IAM User X that we want to grant access to, we would create an Identity-based policy to grant access specifically to the secret-stuff bucket, which happens to live in AWS Account A.

What is interesting here, is that Company A would have no say in exactly what Identity is used by Company B — in AWS Account B — to access their resource. The only thing they would control, is the fact that AWS Account B can access their resource in AWS Account A. It is Account B where it is determined exactly what Identity gets to access the secret-stuff bucket.

IAM with Multiple AWS Accounts: Organizations

As explained in the previous blog post, you can leverage AWS Organizations to group multiple AWS Accounts together to consolidate billing but also access control.

How does IAM work in the context of AWS Organizations? This happens through 2 additional concepts:

  • AWS SSO Users & Groups
  • Permission sets


AWS Single Sign-on lets you define Users and Groups in a central place — usually in the management account of your AWS Organization — and control access to resources in all AWS Accounts in an Organization for those Users and Groups.

SSO Users have a few fundamental differences compared to regular IAM users:

  • SSO Users have an email address to identify them
  • SSO Users usually have access to resources in multiple AWS Accounts
  • SSO Users don’t have (Identity-based) policies attached directly to them

SSO Groups are similar to IAM Groups in that they’re used to group together Users so that the same policies can be applied to all users within a group. A key difference here is that — just like with SSO Users — policies are not attached to SSO Groups directly.

If you cannot attach policies to SSO Users & Groups directly, how can you allow those Users & Groups access to resources in the AWS Accounts in your Organization? This is done through Permission Sets.

Permission Sets

Permission Sets are basically the AWS SSO alternative to regular IAM Policies. They are set up in a very similar way — with Effects, Actions and Resources. The big difference is that Permission Sets are not applied to an SSO User/Group alone, but they are applied in combination with an AWS Account.

A Permission Set is applied to an SSO User/Group for a specific AWS Account

This means that when you apply a Permission Set to an SSO User/Group, you choose an AWS Account so that the policies defined in the Permission Set are applied to the SSO User/Group for the selected AWS Account.

Example: let’s say you have created a Permission Set that allows read-only access to all resources. Now you can grant read access to all resources in Account A in your Organization by applying the aforementioned Permission Set to specifically for Account A.

Permission Sets encourage reuse of similar policies across AWS Accounts and SSO Users.

How AWS Applies Access Control in SSO

If you apply a Permission Set to an SSO User for a specific AWS Account, how does that work internally? In the end, AWS will still use IAM to do the actual access management. For each Permission Set you apply to a certain AWS Account — for 1 or more SSO Users/Groups — AWS will create a dedicated Role in that AWS Account. Let’s say that in the example above where we want to grant read-only access, we called the Permission Set ReadOnlyPermissions. When we apply this Permission Set to Account A for, AWS will do 3 things:

  • It will create a Role in Account A based on the ReadOnlyPermissions Permission Set
  • It will attach policies to that Role according to the policies defined in the ReadOnlyPermissions Permission Set
  • It will add as Principal to the created Role so she can assume that Role in Account A

Now when logs into AWS using SSO, she will be presented with a choice to assume the ReadOnlyPermissions Role in Account A — next to all the other Roles she can assume in the same or other AWS Accounts in the Organization, all based on the Permission Sets applied to her for specific Accounts.


When I started writing this post, I hoped it would be concise. I guess I failed a bit on that account, which just goes to show how complex AWS IAM really is. I still hope that this gives you an overview that is easier to digest than reading through pages of AWS documentation.

Thanks to Dan for proofreading this yet again! ❤️

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