Identity as a Service Market- Share, Size & Forecast 2033

Q: How Big is the IDaaS Market?

As of 2023, the global market could be USD 9.5 billion. Read Report

Identity As A Service Market Outlook & Drivers

The identity as a service market is expected to increase from USD 9.5 billion in 2023 to USD 135.0 billion by 2033, at a 30.4% CAGR from 2023 to 2033.

Identity as a service embeds Identity and Access Management (IAM) capabilities based on standards like SAML, OpenID, 0Auth, and SW-Federation within the organization's applications, which may otherwise cost an organization a significant amount to stay up with the standards. Furthermore, it provides developers with a plug-in approach that includes the necessary pre-existing API, saving time and money on in-house development.

Identity as a service analytics and intelligence capabilities assist enterprises in improving and identifying irregularities with access credentials within multidimensional relationships between individuals, their roles and responsibilities, data usage, and job function.

Blockchain avoids centralized networks and single points of failure. It has the potential to offer up new business options for vendors and end-users. Moreover, blockchain's decentralized structure avoids maintaining big consolidated pools of data, which are a prime target for hackers, by constructing distributed ledgers that can maintain data chains without sacrificing security.

With the increasing number of data breaches, organizations' preference for cloud infrastructure, and OSs such as Windows OS, macOS gaining traction at the enterprise level, the coupling of web application SSO and AD has become less effective, resulting in the introduction of Identity-as-a-service platforms that allow organizations to forego managing deployment, security, configuration, and maintenance in-house.

As a result, companies are now searching for automated solutions that may aid in the prevention of attacks and the management of vulnerabilities by restricting access and managing data. Identity is believed to be at the forefront of any cyberattack and data breach, which increases the need for Identity as a Service and accelerates market growth.

The growing concern among citizens and public administration officials about cybersecurity is regarded as one of the major impediments to e-government implementations; additionally, with the rise of cyberterrorism, the operational state of cybersecurity in the public sector is regarded as a black box.

Report Attribute	Details
Identity as a Service Market Value (2023)	USD 9.5 billion
Identity as a Service Market Anticipated Value (2033)	USD 135.0 billion
Identity as a Service Market Growth Rate (2023 to 2033)	30.4% CAGR

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2017 to 2022 Identity as a Service Market Outlook in Comparison to 2023 to 2033 Growth Forecast

The identity as a service market was worth around USD 7.6 billion in 2022, recording a 21.5% CAGR from 2017 to 2022. Absolute dollar growth in the global market is USD 125.4 billion.

Historical CAGR (2017 to 2022)	21.5%
Forecast CAGR (2023 to 2033)	30.4%

Short Term (2023 to 2026): Some of the drivers fueling the market's growth are government policies and activities supporting the transfer of digital identities, government rules and the demand for compliance, and an increase in identity and authentication fraud.
Medium Term (2026 to 2029): Rapid digitization and cloud usage are expected to boost the demand for identity management solutions across industries.
Long Term (2029 to 2033): Moving identity management to the cloud poses several concerns, including auditing, regulatory compliance, and the likelihood of leakage.

As per the FMI analysts, a valuation of USD 135.0 billion by 2033 end is estimated for the market.

Year	valuation
2016	USD 1.83 million
2021	USD 4.99 billion
2022	USD 7.6 billion
2023	USD 9.5 billion
2033	USD 135.0 billion

Identity and Authentication Fraud is on the Rise

Cybercrime on critical applications and infrastructures is a continuing danger to businesses of all sizes. Every day, the sophistication of cyberattacks rises. Fraud costs it about 5% of its total annual sales on a global basis as told by one company.

Threats may originate from outside or within the organization, such as a rogue employee. These hacks can cause operational disruptions, data leaks, and financial losses. These further cause significant financial problems for organizations and their reputations are constantly jeopardized.

By triggering payment stoppage, bank account fraud, and service deterioration, these schemes can harm consumer relationships and destroy confidence. In addition to reputational harm and financial losses, organizations face indirect expenses such as decreased productivity, low employee morale, and a deterioration of the brand image.

Identity management today occupies a vital place in an organization's IT operations due to the increased threat of cyberattacks. Identity as a Service, when adopted across companies, can lessen the possibility of such scams and economic loss.

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Consumer Data Information Security is Lacking

Banking applications are used by many people all around the world. Failure or violation of user privacy in the case of breaches in the banking industry is a severe problem. The financial services industry has already adopted cutting-edge solutions for both information and physical security.

Concerns regarding unsecured endpoints such as PCs, laptops, and mobile devices, on the other hand, are linked to rising internal and external user populations, as well as increased transaction volume and complexity. These endpoints are the primary targets of cyberattacks because they provide easy access that may be leveraged for a variety of attack vectors. As a result, users are unaware of complicated threats and system vulnerabilities.

Businesses must continually interact with their customers and educate them on data security. Better solutions are thus required to develop an organization's security architecture.

Integration of AI, Machine Learning, and Blockchain Technology to Improve Digital Identities

The incorporation of cutting-edge technology like blockchain, AI, and machine learning is a popular idea. Labor is being replaced by automated technologies that have been designed to reduce potential effects. These advancements enable computers to discover hidden insights without explicit programming and automate the development of analytical models.

Identity as a Service solution providers can utilize ML-based analytics to analyze massive amounts of data and access-related behaviors. By carefully monitoring and reporting on a user, account, application, department, and organizational risk posture, identity attack surfaces can be reduced. The exposing of anomaly processes also aids in the development of risk-based access certificates, which aid in identifying and authentication operations.

Various businesses, including banking and finance, automotive, and government, have begun to employ these strategies. It supports the development of strategic and corrective measures for businesses. As a result, leveraging technology is expected to give identity as a service organization a variety of development prospects.

What are the Key Contributors to the Identity as a Service Market Growth?

Customers' data is subject to stringent rules in several nations throughout the world. The General Data Protection Regulation (GDPR), the Personal Information Protection and Electronic Documents Act, the California Consumer Privacy Act, the Act on Personal Information Protection, and others are only a few of the rules.

These rules are more concerned with using digitally generated data responsibly and ethically. As a result, consumer trust is increased, and the user experience is improved. The necessity for these restrictions has been spurred by the expanding illegal practices of utilizing clients' sensitive data for organizational expansion.

For example, Facebook LLC and Google LLC were fined USD 9.3 billion in 2018 under GDPR, even though certain legal proceedings are still pending due to GDPR violations. These regulatory compliances are expected to be met by the strategically applied identity as a service.

The component includes features that guarantee data access is allowed and authenticated. As a result, it aids in the prevention of external data breaches as well as internal data abuse. Currently, the fee for data breaches is comparable to the risk of data security. As a result, rising regulatory compliance throughout the world is predicted to boost its identity as a service market.

What are the Limits to the Identity as a Service Market?

The expansion of the identity as a service market is hampered by service outages caused by human or technological faults. This service interruption prevents clients from accessing data and results in significant losses. For example, in March 2017, Amazon Web Services knocked many servers offline owing to a human error, causing consumers to be inconvenienced.

Users are also concerned about the security of their data, as the service provider may suffer a data breach. In June 2017, the identity management firm OneLogin, located in the United States, experienced a security breach that exposed client data. The identity as a service market expansion is projected to be hampered by such technological mistakes

What are the Emerging Trends in Identity as a Service Market?

Blockchain provides security, transparency, and other benefits to firms in a variety of industries. Through its decentralized network, the technology also provides potential possibilities for identity as a service market.

The significant move to digital platforms, as well as the increased threat of data breaches, are likely to drive demand for blockchain technology in identity management. Identity fraud schemes caused USD 43 billion in damages in 2021, according to the Identity Fraud Study.

The technique provides traceable digital identity security in addition to encrypted and immutable data maintenance cryptographic security. It also enhances the weaknesses of password protection that aren't strong enough. The analytical data issues involving Facebook and Google can be identified by using blockchain-based identity management.

Control and total ownership of one's data can improve Self-Sovereign Identity and technology.

Non-custodial logins based on the blockchain can similarly control users' data. MetaMask, for example, is a blockchain-based program that allows for secure login, token storage, and digital payments while keeping the user's data safe. As a result, there is great control over personal data, which may help in blockchain-based identity as a service market growth.

How are Some Challenges Stifling Identity as a Service Market Growth?

Because of the recent global pandemic COVID-19 and the ensuing lockdown, businesses were forced to move their operations to the cloud by allowing employees to work from home, putting them exposed to cyberattacks, which are likely to challenge the identity as a service market.

For example, on April 19, 2020, Cognizant Technology Solutions Corporation was struck by a ransomware assault by a group known as Maze, and the attackers threatened to release business information if the firm did not pay the ransom. The authorities must establish clear and consistent regulations for the collection, processing, and sharing of personal data.

Legislation that encourages the use of identity as a service market, such as those in South Korea that require all e-commerce transactions to check the user's age, has encouraged acceptance of this technology and produced a well-developed ecosystem outside this specific use-case.

A Glimpse of Country-wise Insights

Country	United States
CAGR (2017 to 2022)	21.1%
Valuation (2023 to 2033)	USD 32.5 billion

Country	United Kingdom
CAGR (2017 to 2022)	22.3%
Valuation (2023 to 2033)	USD 6.3 billion

Country	China
CAGR (2017 to 2022)	24.6%
Valuation (2023 to 2033)	USD 13.6 billion

Country	Japan
CAGR (2017 to 2022)	23.4%
Valuation (2023 to 2033)	USD 10.6 billion

Country	India
CAGR (2017 to 2022)	25.1%
Valuation (2023 to 2033)	USD 12.7 billion

North America is Estimated to Control a Large Share of the Market

North America has a large market share due to factors such as the adoption of cloud infrastructure by the leading organizations in the region, the presence of key identity as service vendors such as Adaptive, Okta, OneLogin, and Ping Identity who rely on the region as a primary source of revenue, and the presence of global players such as Oracle Corporation and Microsoft Corporation.

Organizations in the region, such as LastPass, use the BYOD model, which allows employees to bring their smartphones to work rather than utilizing a company-owned device, rendering them vulnerable to cyber-attacks. The region operates in a cyber-landscape that necessitates a level of data security, resilience, and trustworthiness that neither public authorities nor the private sector can provide; as a result, vendors in the region can capture the market by providing identity as a service powered by advanced technologies such as blockchain, AI, and Machine Learning, among others.

Asia Pacific market is expected to Develop at a Significant Rate in terms of Revenue during the Projected Period

Cloud-based services are becoming more popular among SMEs and large enterprises. Organizations in the region are migrating and implementing mobile, cloud, and next-generation technologies. To reduce the risk of a data breach, it is necessary to secure apps, authenticate users, and maintain control over business-critical information.

The Middle East and Africa region is also projected to gain traction in the future years as the region's IT infrastructure develops. Furthermore, expanding IT & telecom and BFSI industries in countries such as China, India, and Japan are likely to drive regional market growth throughout the projection period.

Competitive Landscape

Key Companies Operating in the Market are:

Okta
Ping Identity
Idaptive
Microsoft
Oracle

Scope of Report

Attribute	Details
Market Size Value in 2023	USD 9.5 billion
Market Size Value in 2033	USD 135.0 billion
Market Analysis	USD billion for Value
Key Region Covered	North America; South America; Europe; Asia Pacific; The Middle East and Africa
Key Segments	By Component, By Deployment Type, By Organization Size, By Vertical, By End Use, By Region
Key Companies Profiled	Okta; Ping Identity; Idaptive; Microsoft; Oracle
Report Coverage	Market Forecast, Company Share Analysis, Competition Intelligence, DROT Analysis, Market Dynamics and Challenges, and Strategic Growth Initiatives
Customization & Pricing	Available upon Request

What is the Segmentation Outlook for the Identity as a Service Market?

The worldwide identity as a service market is segmented primarily by component, deployment type, organization size, vertical, and geography. However, this study also discusses additional areas. Here, we're focusing on the top segmentations by component and deployment type to provide a complete picture of the global identity as a service market state.

Which Segment has the Maximum Growth Potential in the Identity as a Service Market by Component?

Single sign-on, multi-factor authentication, provisioning, privacy management, password management, advanced authentication, and others are market components. Okta, Google Identity Platform, IBM Cloud IAM, and SailPoint Identity Platform were evaluated in the identity as a service market.

Provisioning is expected to obtain the most revenue with a decent CAGR of 11.9% shares due to its ability to use a single password for various apps. It not only improves user experience but also reduces surface attacks. For example, in 2021, the Netherlands-based Carante Group used NetIQ enhanced authentication to provide smooth and safe access to patient data. Its ability to accommodate many authentication systems and operating systems drives advanced authentication needs.

As more companies use customers' and users' data, the need for privacy management is estimated to expand. The requirement for privacy management is projected to increase to assure user consent and privacy. Password-less access with double source authentication also increases multi-factor authentication revenue share.

Which is the Preferred Segment in the Identity as a Service Market by Deployment Type?

The identity as a service market is segmented into public, private, and hybrid clouds. Due to its wide range of services, the hybrid cloud is projected to dominate the industry with a strong CAGR of 10.8 %. Also, increased data security risks are likely to drive global IDaaS market adoption across enterprises. Hybrid cloud security breaches affected 7 in 10 enterprises in 2019, according to Sophos' State of Cloud Security 2020 study.

As digital cloud-based storage grows, the private and hybrid clouds certainly increase significantly. The ability to access data from anywhere, at any time, is expected to drive the growth of the identity as a service market.