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Showing content from https://docs.microsoft.com/en-us/azure/active-directory/device-management-introduction below:

What is device identity in Microsoft Entra ID? - Microsoft Entra ID

A device identity is an object in Microsoft Entra ID. This device object is similar to users, groups, or applications. A device identity gives administrators information they can use when making access or configuration decisions.

There are three ways to get a device identity:

Device identities are a prerequisite for scenarios like device-based Conditional Access policies and Mobile Device Management with the Microsoft Intune family of products.

Modern device scenario

The modern device scenario focuses on two of these methods:

Microsoft Entra hybrid join is seen as an interim step on the road to Microsoft Entra join. All three scenarios can coexist in a single organization.

Resource access

Registering and joining devices to Microsoft Entra ID gives users Seamless Sign-on (SSO) to cloud-based resources.

Devices that are Microsoft Entra joined benefit from SSO to your organization's on-premises resources.

Provisioning

Getting devices in to Microsoft Entra ID can be done in a self-service manner or a controlled process managed by administrators.

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