Cloud Identity is an Identity as a Service (IDaaS) solution that allows you to centrally manage users and groups who can access cloud resources.
If developers in your organization use non-managed consumer accounts (like personal Gmail accounts) for work purposes, those accounts are outside of your control. When you migrate those users to Cloud Identity accounts, you can manage access and compliance across all users in your domain.
Cloud Identity provides free identity services for users who don't need G Suite Services like Gmail or Drive. When you migrate to Cloud Identity, you create a free account for each of your users and you can manage all users from the Google Admin console.
For more details, see What is Cloud Identity?