What is the purpose of AWS Identity and Access Management (IAM)?

The purpose of AWS Identity and Access Management (IAM) is fundamentally to manage user access and permissions for AWS resources. IAM enables organizations to create and manage AWS users and groups, and to use permissions to allow or deny their access to AWS resources. This capability is essential because it helps maintain security by ensuring that only authorized users can access specific resources, manage those resources, or perform certain actions.

By establishing fine-grained access controls, IAM allows administrators to tailor access policies to match specific roles within the organization, adhering to the principle of least privilege. This is critical for protecting sensitive data and ensuring compliance with various regulatory requirements. For example, an IAM policy could allow a developer to deploy applications but would restrict access to services that deal with sensitive customer data.

The other options pertain to different functions in AWS and do not encapsulate the core functionality of IAM. While billing and cost management is critical for cloud resource allocation, and optimizing application performance and providing storage solutions are important features of the AWS ecosystem, they do not relate to the management of user identities and permissions, which is the primary role of AWS IAM.