Azure AD SSO for an application in another cloud

Hi all,

we have a IaaS application in a another cloud and we would activate the SSO with Azure AD credential on this app.

I read about identity federation, but it requires an AD on-premises and we have only Azure AD.

I think I have to add the application on the Enterprise Application on Azure and about this I'm reading this doc https://docs.microsoft.com/en-us/azure/active-directory/manage-apps/sso-options about the SSO, but I'm not sure if it is the correct flow and if yes what option should I choose Cloud (the application is in another cloud) or On-premises?

Thanks.