What it is
On first boot a device contacts the Onboarding Service and is told which UMS or cloud environment it belongs to. The person in front of it signs in with their company credentials, and that registration is what assigns the device to its configuration, policies and group.
Everything else follows automatically: policies, network configuration, certificates, software packages.
What it is for
Shipping hardware to people instead of to a staging bench. A device can go straight from the distributor to a home office and arrive managed, which is the difference between a remote rollout and a lot of driving.
It is equally the answer for a site with no IT staff, which is most branch offices.
What to watch
The device has to reach the service before it is anything at all, so the failure modes are network ones: captive portals in hotels, a home router with an unusual DNS, a firewall rule nobody remembers writing. None of those appear on a test bench with a wired connection.