Identity As A Service Market - Strategic Insights and Forecasts (2025-2030)

The identity as a service market is expected to grow from USD 8.51 billion in 2025 to USD 28.37 billion in 2030, at a CAGR of 27.21%.

Identity as a service, or IDaaS, is a cloud-based authentication model for the identity and access management solutions of firms. The identity and access services are operated by a third-party provider rather than being deployed by in-house personnel. The multi-factor authentication, single sign-on, and directory services of IDaaS offer enterprises simple, cost-effective identity and access management features while ensuring the enterprise’s security. The low cost and simplicity offered by IDaaS have garnered the attention of many organizations. The increasing cyber-threats and use of cloud-based platforms are expected to drive Identity as the service market onward.

Identity as a Service Market Drivers:

• Advancing technologies, rapid penetration of cloud-based solutions, and increasing modernization are expected to add impetus to the growth of the IDaaS market.

The transition and evolution of authentication and Software-as-a-Service (SaaS) models have been hastened by modernization, the cloud, and remote work. Identity-as-a-Service, or IDaaS, is a sort of SaaS that allows IT and security decision-makers to shift infrastructure like identity access control to the cloud, gaining many of the advantages of cloud economics, agility, and reach. Thus, many firms are seeking IDaaS solutions to increase time-to-value and simplify and modernize their operations. For instance, in July 2020, V-key, a software-based global digital security company, announced a partnership with Ingram Micro Cloud to gradually introduce its globally lauded V-OS Solution, a cloud-based IDaaS solution for authentication technologies and mobile security, across seven Ingram Micro Cloud marketplaces in the Asia Pacific. Until recently, these solutions were only available as on-premise solutions for large organizations, but this cooperation aims to enable SMEs to adopt Enterprise-grade security to safeguard their digital identities in a seamless manner. Furthermore, the increased use of remote work practices and the need for secure data protection from hackers and fraudulent practices have become the top priority of many IDaaS providers. Subsequently, many firms are gearing up and constantly working on designing and introducing new products into the market. A new product launch by BIO-key is the best example of this. In November 2020, the company formally launched its new offering, the PortalGurad IDaaS solution, which is designed and developed to aid enterprises in effectively transforming digitally while providing them with the necessary tools to adapt to any security environment. This new cloud-based IDaaS is entirely scalable and supports 14 authentication methods, like biometric authentication. The platform virtually supports all the most recent federation standards and major user directories and authenticators.

At the same time, many companies are making strategic acquisitions in order to provide better services to their customers, strengthen their brand presence in the market, and keep up with emerging technologies. CyberArk’s acquisition of IDaptive Holdings, Inc., a  global California-based IDaaS enterprise, is one of the best examples of this. In March 2020, CyberArk, a leading privileged access management service provider, announced its acquisition of IDaptive Holdings. The two enterprises are set to deliver the only modern IDaaS platform with a security-first approach. With this acquisition, Idaptive and CyberArk will be developing an exhaustive AI-based security-first solution that is context-aware and adaptive, is architected based on Zero Trust, and possesses the least privilege access. The latter also evolved its ability to protect identities with varying privilege levels across multi and hybrid cloud environments, allowing consumers to enhance their security systems while providing a more user-friendly experience.

• The innumerable incidences of cyber-attacks and fraudulence are bound to increase the need for IDaaS solutions in the market.

The growing concerns over cyber security and the enterprise’s initiatives to seek a better security solution to restrict security breaches are one of the main factors attributed to the surge in demand for the IDaaS market. According to the Data Breach Report by Identity Theft Resource Centre, the data breach in 2021 increased by 68% when compared to the previous year. Also in 2021, more cyber-related data was comprised. According to the Cost of Data Breach report 2020, the average cost pertaining to a data breach amounts to US$ 3.86 million. Consequently, several multinational conglomerates in 2020 suffered from data breaches. For instance, in July 2020, a data breach on  Twitter resulted in the compromise of 130 accounts, resulting in the attackers pilfering about US$ 121,000 worth of bitcoins. Also, in March 2020, Marriott International announced a security breach wherein the data of over 5.2 million patrons were affected. In May 2022, yet another data breach was observed in Ikea Canada, impacting about 95, 000 citizens of the nation. Furthermore, Cisco estimated that by 2023,  total DDoS attacks will reach  15.4 million by 2023 in its Annual Internet Report.

Identity As A Service Market Scope: