Identity As A Service Market By Type of Service (Authentication, Authorization), Deployment Mode (Public Cloud, Private Cloud), Verticals (Banking, Financial Services, and Insurance (BFSI), Healthcare), & Region for 2024-2031

Identity As A Service Market Valuation – 2024-2031

Growing concerns about data breaches and cyberattacks is propelling the adoption of identity as a service. Stricter data protection regulations like GDPR and CCPA require organizations to implement comprehensive identity management systems is driving the market size surpass USD 3.01 Billion in 2024 to reach a valuation of around USD 6.94 Billion by 2031.

In addition to this, the rise in remote and hybrid work models increases the necessity for secure and efficient identity verification systems, this is enabling the market to grow at a CAGR of 20.13% from 2024 to 2031.

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Identity As A Service Market: Definition/ Overview

Identity as a Service (IDaaS) is a cloud-based service model that provides identity management and authentication solutions over the internet. It includes functionalities such as single sign-on (SSO), multi-factor authentication (MFA), and identity governance. By leveraging IDaaS, organizations can manage user identities and access permissions without maintaining extensive on-premises infrastructure, ensuring secure and scalable identity management.

IDaaS is widely used across various sectors to streamline user authentication and access control. In enterprises, it simplifies user access to applications and systems, enhances security through advanced authentication methods, and ensures compliance with regulatory requirements. It is also utilized in consumer-facing applications to offer secure login options and manage user profiles, contributing to a seamless user experience.

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How will Rising Cyber Threats Increase Adoption of Identity As A Service?

The rapid adoption of Identity as a Service (IDaaS) solutions is driven by increasing regulatory requirements for data protection and privacy. According to the U.S. Federal Trade Commission, in a 2023 report, data breaches in the U.S. have risen by 32% over the past year, underscoring the need for robust identity management solutions. Key players like Okta and Microsoft have responded by enhancing their IDaaS offerings to comply with stringent regulations such as the GDPR and CCPA, further propelling market growth.

The rise of remote work and digital transformation initiatives has significantly contributed to the IDaaS market expansion. The International Data Corporation (IDC) reported in July 2024 that 55% of organizations worldwide have increased their investment in cloud-based identity solutions to support remote operations. Companies like IBM and Ping Identity are capitalizing on this trend by offering scalable and secure IDaaS solutions designed to facilitate seamless access for remote employees, which is driving rapid adoption in the sector.

Increased cyber threats and the need for advanced security measures are also fueling the growth of the IDaaS market. According to a 2024 Cybersecurity Ventures report, global cybercrime is expected to cause $10.5 trillion in damages by 2025, prompting businesses to invest in more secure identity management solutions. Leading IDaaS providers, such as ForgeRock and OneLogin, have recently launched advanced threat detection and authentication features to address these security concerns, reflecting the growing emphasis on enhanced protection in their service offerings.

Will Data Privacy and Security Concerns of Identity As A Service Restrain Its Market Growth?

The Identity as a Service (IDaaS) market faces several restraints that impact its growth potential. One primary challenge is the issue of data privacy and security concerns. Organizations are often apprehensive about outsourcing sensitive identity management functions to third-party providers due to the risk of data breaches or unauthorized access. This apprehension can hinder adoption rates and slow down market expansion.

Another significant restraint is the complexity and cost of integration with existing systems. Implementing IDaaS solutions often requires extensive customization and integration efforts, which can be costly and time-consuming for businesses. Smaller organizations, in particular, may struggle with these expenses and the technical complexities involved, limiting their ability to leverage IDaaS.

Regulatory and compliance requirements also pose a challenge for the IDaaS market. Different regions have varying standards and regulations regarding data protection and identity management. Ensuring that IDaaS solutions comply with these diverse regulations can be a complex and ongoing process, potentially slowing down market growth and creating barriers for providers trying to cater to a global audience.

Category-Wise Acumens

Which Factor Enable Identity Governance and Administration (IGA) Segment to Lead in Identity As A Service Market?

Identity Governance and Administration (IGA) is becoming a dominant force in the Identity as a Service (IDaaS) market due to the increasing complexity of regulatory compliance requirements. According to the U.S. National Institute of Standards and Technology (NIST), 2023 guidelines emphasize that 78% of organizations are now mandated to implement comprehensive identity governance frameworks to meet compliance standards. Companies like SailPoint and Saviynt have responded by integrating advanced IGA solutions into their IDaaS offerings, ensuring that businesses can efficiently manage access and meet regulatory demands.

The growing need for centralized control over user access and identities is further propelling the dominance of IGA within the IDaaS market. The European Union Agency for Cybersecurity (ENISA) reported in 2024 that 64% of data breaches are attributed to poor access management, highlighting the critical need for robust IGA solutions. Key market players such as Microsoft and IBM have recently enhanced their IGA functionalities, focusing on providing enterprises with comprehensive visibility and control over user access to mitigate these risks.

Which Factors Enhance the Use of Identity As A Service in Banking, Financial Services, And Insurance (BFSI) Sector?

The banking, financial services, and insurance (BFSI) sector is leading the Identity as a Service (IDaaS) market due to its critical need for stringent security measures. According to the U.S. Securities and Exchange Commission (SEC), 2023 regulations require financial institutions to implement robust identity verification processes to prevent fraud and protect sensitive information. Key IDaaS providers like Okta and ForgeRock are enhancing their offerings with advanced authentication and compliance features to cater to the BFSI sector’s demands, ensuring adherence to these regulatory standards.

The BFSI sector’s dominance in the IDaaS market is also driven by its need for efficient user access management and fraud prevention. The European Central Bank (ECB) reported in early 2024 that financial institutions face a 45% increase in cyber-attacks compared to the previous year, emphasizing the urgent need for secure identity solutions. Companies such as IBM and Ping Identity are addressing this by integrating sophisticated identity management solutions into their platforms, providing BFSI organizations with tools to better protect against cyber threats and streamline user access.

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Country/Region-wise Acumens

Will Rising Regulatory Requirements for Data Protection and Privacy in North America Drive Identity As A Service Market Growth?

North America is leading the identity as a service (IDaaS) market due to its advanced technological infrastructure and high adoption rates. According to the U.S. Department of Commerce, in 2023, North America accounted for approximately 55% of the global IDaaS market share, driven by the region’s strong emphasis on digital transformation and cybersecurity. Major players like Okta and Microsoft are capitalizing on this dominance by expanding their IDaaS offerings with cutting-edge technologies to meet the growing demands of North American businesses.

The region’s dominance is also fueled by the increasing regulatory requirements for data protection and privacy. The U.S. Federal Trade Commission (FTC) reported in 2024 that data protection regulations are becoming more stringent, compelling organizations to adopt comprehensive identity management solutions. Leading IDaaS providers, such as IBM and Ping Identity, are responding by enhancing their solutions to comply with these evolving regulations, thereby strengthening their position in the North American market.

Will Surge in E-Commerce and Online Services Enhance Adoption of Identity As A Service in Asia Pacific?

The Asia Pacific region is experiencing rapid growth in the identity as a service (IDaaS) market due to the increasing adoption of digital technologies across various sectors. The Asia-Pacific Economic Cooperation (APEC) reported in 2024 that the region’s market for cloud-based identity solutions is growing at a compound annual growth rate (CAGR) of 22%, driven by the region’s expanding digital infrastructure. Companies such as Okta and ForgeRock are expanding their operations in Asia Pacific to capitalize on this growth, offering tailored IDaaS solutions to meet the rising demand for digital identity management.

The surge in e-commerce and online services in Asia Pacific is also contributing to the rapid expansion of the IDaaS market. According to the Asia-Pacific Network Information Centre (APNIC), e-commerce transactions in the region increased by 30% in 2023, highlighting the need for secure and scalable identity management solutions. Providers like Microsoft and IBM are responding to this trend by introducing advanced IDaaS solutions designed to support the growing number of online transactions and user interactions across the region.

Competitive Landscape

The identity as a service market is a dynamic and competitive space, characterized by a diverse range of players vying for market share. These players are on the run for solidifying their presence through the adoption of strategic plans such as collaborations, mergers, acquisitions, and political support.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the identity as a service market include:

• Okta
• Microsoft
• IBM
• Ping Identity
• ForgeRock
• SailPoint
• OneLogin
• Auth0 (now part of Okta)
• RSA Security
• Dell Technologies
• Amazon Web Services (AWS)
• Google Cloud
• VMware
• CyberArk
• Broadcom (formerly CA Technologies)
• Oracle
• NetIQ (a Micro Focus product)
• TIBCO Software
• Centrify
• me

Latest Developments

• In August 2024, Okta and Microsoft announced a strategic partnership to enhance identity management solutions with advanced AI-driven security features, aiming to provide more robust protection against evolving cyber threats in the identity-as-a-service market.
• In July 2024, IBM launched a new suite of identity verification tools that integrate with its cloud services, offering enterprises more seamless and secure authentication processes while improving user experience.

Report Scope

Identity As A Service Market, By Category

Type of Service:

• Authentication
• Authorization
• User Provisioning
• Single Sign-On (SSO)
• Directory Services
• Identity Governance and Administration (IGA)

Deployment Mode:

• Public Cloud
• Private Cloud
• Hybrid Cloud

Verticals:

• Banking, Financial Services, and Insurance (BFSI)
• Healthcare
• Retail
• IT and Telecom
• Government and Public Sector
• Education

Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

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