Identity Service Market Trends

Introduction

As we look at the state of the IDaaS market in 2023, it is worth considering the macro-factors that are driving it. Cloud and AI are transforming the way that organizations manage identity and access. Meanwhile, data privacy and security regulations are driving organizations to adopt more sophisticated identity solutions in order to meet compliance requirements. And changes in consumer behavior, which is demanding a seamless and secure digital experience, is also forcing organizations to prioritise identity management. These macro-factors are crucial to understand for any stakeholder, as they not only show the strategic importance of IDaaS in terms of enhancing security and the customer experience, but also underline the need to be agile in a rapidly changing environment.

Top Trends

1. Increased Adoption of Zero Trust Security Models
   The use of zero-trust security architectures has increased considerably. This architecture requires continuous verification of the identity of users. In the United States, for example, the Department of Defense has implemented zero-trust security to increase the security of its networks. According to a recent survey, by 2025, eighty percent of businesses expect to be using zero-trust security. This trend is increasing the demand for identity as a service (IDaaS) solutions that support these architectures, and which result in a more robust security posture.
2. Integration of AI and Machine Learning
   The integration of the verification process into the IDaaS platform is based on the use of AI and machine learning. Microsoft, for example, uses AI to detect anomalies in the behavior of its users, which increases the rate of fraud detection. According to research, the use of such solutions reduces the number of frauds by 30 percent. This trend is likely to continue, and more complex algorithms will be developed to further increase the level of security and convenience of users.
3. Rise of Decentralized Identity Solutions
   Decentralised identity solutions are gaining ground as companies seek to give users more control over their personal data. A framework like the European Union’s self-sovereign identity is helping to pave the way. A recent report estimated that a decentralised identity could reduce the cost of identity verification by up to 50%. In future, decentralised identity solutions could be used in a range of industries, including finance and health.
4. Focus on User Experience and Self-Service
   IT departments are concentrating on delivering a better experience for users through self-service identity management. Companies like Okta offer a simple, straightforward user experience that makes it easy for people to manage their own identities. According to a survey, 70 per cent of users prefer self-service identity management. This trend will increase customer satisfaction and reduce the cost of IT.
5. Regulatory Compliance and Data Privacy
   With the growing importance of regulations such as the General Data Protection Regulation (GDPR) and the Californian Data Protection Act (CCPA), IDaaS solutions are increasingly focusing on compliance and data privacy. As non-compliance with these regulations is punishable by high fines, companies are using platforms that ensure compliance with these regulations. A study has shown that 60% of companies are now prioritizing compliance in their IAM strategies. The repercussions of this may be more and more strict regulations, which will force IDaaS suppliers to continue to innovate.
6. Expansion of Multi-Factor Authentication (MFA)
   The use of multi-factor identification has become a common feature of identity as a service offerings in order to improve security. Many governments and businesses are now using it to protect sensitive data, and studies have shown that multi-factor identification can prevent up to 99.9 per cent of automated attacks. This trend is set to continue as more organisations see the importance of layered security.
7. Cloud-Native Identity Solutions
   The shift towards cloud-native identity solutions is changing the identity as a service (IDaaS) landscape, as companies seek scalable and flexible options. To meet the increasing demand, the big players are investing in cloud-native architectures. The resulting cloud-native solutions can reduce the time to deployment by up to 50 percent, according to recent research. This trend is expected to continue, as more companies migrate to cloud-native identity management solutions.
8. Identity Governance and Administration (IGA) Integration
   This integration of IGA and IDaaS is essential for the proper management of user access. In this respect, the main players are those who offer comprehensive IGA solutions, such as Oracle. A survey has revealed that 75% of organizations are prioritizing IGA in order to improve security and compliance. In the future, we may see a closer integration between the IGA and IDaaS platforms.
9. Biometric Authentication Advancements
   IDaaS vendors are already offering facial recognition and fingerprint scanning as part of their solutions. Governments and corporations are increasingly using biometrics to control access to their systems. Biometric identification has been shown to reduce the risk of identity fraud by as much as 90%. This is likely to continue, as innovations in biometrics continue to enhance security.
10. Collaboration and Partnership Ecosystems
    Collaboration between IDaaS suppliers and technology partners is increasingly important to provide a comprehensive identity solution. Ping Identity has teamed up with cloud service providers to provide an IDaaS solution. A recent survey found that 65% of organizations believe that a partnership increases their ability to manage their digital identity. This trend may lead to more integrated solutions in the future.

Conclusion: Navigating the Identity as a Service Landscape

In 2023, the IDaaS market will be characterized by intense competition and a large number of participants, both established and new. Localized solutions will become more and more popular as a result of the regional trends, and suppliers will be forced to adapt their offerings to the local legal and cultural conditions. The market will be dominated by the well-known suppliers with their established reputations and their large customer bases, while the newcomers will focus on innovation and development, such as artificial intelligence-based identity verification, automation of the management of users, and sustainable practices. As the market evolves, the ability to offer flexible and scalable solutions will be crucial for suppliers aiming to achieve a leadership position. This will not only increase their competitiveness but also align them with the increasing customer demand for seamless and secure identity management.