Do I need a workspace account to use Google's Cloud Identity?

It is not required to be a customer of Google Workspace (formerly known as G Suite) to be able to use Cloud Identity. If you own a domain (such as example.com), but you're not using Workspace, you can simply register your domain as a Cloud Identity domain by following the guide at https://workspace.google.com/signup/gcpidentity/welcome. At the end of it, you will also be guided through the process of proving ownership of the domain, which involves adding a DNS record on your domain registrar.

Once that is done, the Admin console is ready to use at https://admin.google.com. From there, you can manage users and groups, create Identity security policies, view reports, audit logs, and manage devices and apps, including Google Workspace apps if you use them.

What can I do even without Cloud Identity Enabled?

To add new users (cloud identity users) - or to assign any cloud specific roles (IAM roles), you will have to enable cloud identity for your organization (you will need to be an organization admin or an organization owner to do this).

Summary

It used to be that you absolutely needed a workspace account (a paid google account) to bring your identity over to google cloud. It is no longer the case. You can freely bring any identity over. In addition, you can do several GCP tasks with that identity, even without Cloud Identity enabled.