I like to know what is the difference between ISAM Federation vs IBM Tivoli Federated Identity Manager (TFIM)? Does ISAM Federation supports SAML 2.0 or for that I need TFIM?
ISAM starting at version 9.0 has an additional module "Federation" activated by separate license.
Technically it is embedded instance of TFIM component (that previously needed to be deployed on external server) so most of external TFIM functionalities are working in ISAM's embedded Federation Module.
So answering your question, yes, Embedded Federation Module does support SAML2 and OpenID.
You should choose the ISAM+Federated Module for SAML2 unless you will be doing some extremely complicated scenarios like clustering or would ever need altering configuration by response files (which might be limited in ISAM appliance).