Neither technology alone offers the ultimate user authentication infrastructure
This may seem to defend PKI, which is hardly the case, but it is interesting to learn from the past as we plan for the future.
PKI has been tainted over the last several years as difficult to implement and hard to build a good trust model on. These is actually mostly the result of a few choices that were made years ago without taking into consideration the practical issues.
So here comes identity federation, with the promise of solving the trust problems. However, identity federation really only works in small circles of already-known entities, as the meaning of the identity can easily map into the authentication domain. The original purpose of a PKI was to enable "a globally recognized" credential with specific attributes -- this is not easy to solve within a federated model.
Can we combine the two notions? Do we have to? The ultimate user authentication infrastructure needs to solve both the local trust issue as well as lead to a well-designed access control mechanism. Neither of these are quite achieved with a pure PKI or a federation system.
Recognized in the industry as the "inventor of SSL," Dr. Taher Elgamal led the SSL efforts at Netscape. He also wrote the SSL patent and promoted SSL as the Internet security standard within standard committees and the industry. Dr. Elgamal invented several industry and government standards in data security and digital signatures area, including the DSS government standard for digital signatures. In addition to serving on numerous corporate advisory boards, Dr. Elgamal is the Chief Security Officer at Axway, a global provider of multi-enterprise solutions and infrastructure. He holds a Ph.D. and M.S. in Computer Science from Stanford University. View more of his blog posts here.
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