Microsoft Office team planed to release an update to the Office 2013 Windows client applications that enables new authentication flows, including support for Multi-Factor Authentication (MFA). These new authentication flows are enabled by the Active Directory Authentication Library (ADAL).
Scenarios for ADAL based authentication
This new sign in method enables many new sign in scenarios such as the following:
1. MFA for Office 2013 client applications
2. SAML based identity provider sign in
3. Smart card and certificate-based authentication
4. Outlook no longer requires basic authentication
Note: ADAL based authentication will be available to customers who are accepted into a private preview program, register yourself in the connect site as guided in the article. Additionally, review the scenarios that are not included.
Access the Official blog post announcement here: Office 2013 updated authentication enabling Multi-Factor Authentication and SAML identity providers
Also review the FAQ section to know more.