Identity providers (short: IdP, IDP) are systems that manage and maintain identity information (e.g. user attributes). Identity providers offer user authentication as a service. Picturepark outsources the user authentication to the Picturepark Identity Server as the default trusted identity provider and is thus a relying party application to it. See Wikipedia Identity Provider.
Whenever Office 365 needs to verify a user, for example, Azure AD performs all identity and access management and is thus the trusted identity provider.