Identity as a Service (IDaaS) Market Size, Share & Trends Analysis Report By Type, By Deployment (Public cloud, Private cloud, Hybrid cloud), By End Use, By Region, And Segment Forecasts, 2024 - 2030

Report Overview

The global identity as a service (IDaaS) market size was valued at USD 7.21 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 25.3% from 2024 to 2030. The IDaaS market is growing rapidly due to increased cybersecurity breaches and identity fraud cases. The growing number of routine activities and businesses moving online is causing organizations and individuals worldwide to depend more on digital media and communication networks. Cybercriminals began exploiting the situation to wreak havoc worldwide. The growing use of cloud computing and other connected technologies is driving the adoption of IDaaS for compliance even more.      

IDaaS is a structure that enables the cloud service provider to provide identity and access management within a public cloud. Due to its cloud capabilities, such as flexibility and usage-based payment, IDaaS is suitable for various sectors and companies. Organizations and industry players are increasingly aware of the importance of digital identity management due to the significant increase in the digital labor force. Remote employees working from outside the company's network can access various business processes, increasing the potential risks for organizations.

Incorporating cutting-edge technologies such as blockchain, AI, and machine learning is a trend that is gaining popularity. Automated systems are increasingly replacing human workers, mitigating potential drawbacks. These advancements allow computers to discover undisclosed insights without specific programming and automatically generate analytical models. Identity-as-a-service (IDaaS) solution providers can utilize analytics based on machine learning to evaluate vast amounts of data and behaviors related to access. Observing and documenting users, accounts, applications, departments, and organizational risk levels can reduce vulnerability to identity attacks. Implementing risk-based access certificates is simplified by identifying and detecting unusual activities during identification and authentication procedures.

The shift towards remote and hybrid work models, accelerated by the COVID-19 pandemic, has also played a crucial role in the growing demand for IDaaS. As employees access company resources from various locations and devices, ensuring secure and convenient access becomes more challenging. IDaaS enables organizations to provide their workforce with secure access to applications and data, regardless of location, while maintaining strict security protocols. This flexibility and scalability make IDaaS a suitable solution for organizations looking to support their remote workforce without compromising security.

Additionally, the rise of digital transformation initiatives across industries is driving the adoption of IDaaS. As businesses increasingly embrace digital technologies to enhance their operations and customer experiences, the need for secure and efficient identity management becomes paramount. IDaaS supports digital transformation by enabling organizations to integrate identity management seamlessly into their digital ecosystems, ensuring users have secure access to the tools and services they need to drive innovation and growth.

Type Insights

The single sign-on segment held the largest market revenue share of 28.0% in 2023. The increasing need for enhanced security and simplified access management in organizations drives segment growth. SSO allows users to access multiple applications with a single set of credentials, reducing the burden of password management and lowering the risk of phishing and other cyber threats. As businesses continue to adopt cloud-based services and remote work becomes more prevalent, the efficiency and security provided by SSO solutions are becoming increasingly critical. Furthermore, integrating SSO with multi-factor authentication (MFA) enhances security, driving its adoption across various sectors, including finance, healthcare, and education. This growing reliance on digital platforms and the necessity for secure, seamless access propels the demand for SSO.

The multifactor authentication (MFA) segment is expected to grow at the fastest CAGR over the forecast period. The growing need for enhanced security measures in response to the rising frequency and sophistication of cyber threats drives segment growth. As organizations across various industries migrate to cloud-based services and remote work environments, the risk of unauthorized access to sensitive data has escalated. MFA offers an additional layer of protection by requiring multiple forms of verification, such as a password and a fingerprint or a one-time code, making it significantly harder for attackers to breach systems. This added security is crucial for businesses to protect their digital assets, comply with regulatory requirements, and maintain customer trust, driving the widespread adoption of MFA within the market.

Deployment Insights

The public cloud segment held the largest market revenue share in 2023. The demand for the public cloud segment is increasing due to its scalability, cost-efficiency, and ease of deployment. Organizations across various industries are increasingly adopting public cloud platforms because they offer the flexibility to scale identity management solutions in response to dynamic business needs. Moreover, the public cloud eliminates the need for significant upfront investments in infrastructure, making it a cost-effective option for businesses of all sizes. The public cloud's inherent capability to integrate seamlessly with other cloud-based services enhances its appeal, especially as companies shift their operations to cloud environments.

The hybrid cloud segment is expected to grow at the fastest CAGR over the forecast period. The demand for the hybrid cloud segment is increasing due to its ability to provide a balanced approach that combines the strengths of both public and private cloud environments. Organizations are increasingly adopting hybrid cloud solutions to achieve greater flexibility, scalability, and control over their identity management processes. The hybrid model allows businesses to maintain sensitive data on private clouds for enhanced security while leveraging the cost-effectiveness and scalability of public clouds for less sensitive operations. This approach also supports regulatory compliance requirements, which often mandate strict data privacy and security measures.

End Use Insights

The BFSI segment held the largest market revenue share in 2023. The demand for the BFSI segment is increasing due to the sector's heightened focus on security and compliance. As cyber threats grow more sophisticated, financial institutions require robust identity management solutions to protect sensitive data and ensure regulatory compliance. IDaaS offers scalable, cloud-based identity solutions that help BFSI organizations streamline user authentication, manage access controls, and monitor user activities in real time. Additionally, the need for secure remote access, driven by the rise in digital banking and remote work, has further fueled the demand for IDaaS in this sector, as it provides a seamless and secure way to manage user identities across various platforms.

The healthcare segment is expected to grow at the fastest CAGR over the forecast period. The sector's growing need for secure and efficient identity management systems drives the segment's growth. Healthcare organizations increasingly adopt digital health solutions, which require robust security measures to protect sensitive patient data and comply with stringent regulatory standards such as HIPAA. The rise in telemedicine, electronic health records (EHRs), and the need for seamless access to healthcare systems by various stakeholders, including patients, providers, and administrators, has made secure identity verification critical.

Regional Insights

North America held the largest market revenue share of 38.6% in 2023. The rapid digital transformation across industries, including finance, healthcare, and retail, has heightened the need for secure and efficient identity management solutions. Organizations in North America are increasingly adopting cloud-based services, which has led to a higher reliance on IDaaS to manage user identities and access across diverse platforms. Additionally, stringent regulatory requirements, such as GDPR and CCPA, necessitate robust identity management to ensure compliance, further driving the adoption of IDaaS. The region's large and growing number of remote workers has also fueled demand as companies seek secure methods to authenticate and manage user identities remotely. Finally, the increasing frequency of cyber threats and data breaches in North America has underscored the importance of advanced security measures, making IDaaS a critical component of cybersecurity strategies.

U.S. Identity as a Service (IDaaS) Market Insights

The U.S. market held the largest market revenue share regionally in 2023. Stringent regulations, such as the Health Insurance Portability and Accountability Act (HIPAA) and the California Consumer Privacy Act (CCPA), mandate the implementation of secure identity verification and access control systems. This regulatory environment, coupled with the increasing complexity of managing identities across multiple platforms and devices, is fueling the adoption of IDaaS in the U.S. as companies seek to enhance security while maintaining compliance.

Europe Identity as a Service (IDaaS) Market Insights

Europe identity as a service (IDaaS) market is expected to grow significantly over the forecast period. The growing prevalence of remote work and the increasing reliance on cloud-based services have heightened the need for secure and scalable identity management solutions. The rise in cyber threats targeting European organizations further underscores the necessity for advanced IDaaS platforms to protect sensitive information, driving demand across various industries, including finance, healthcare, and government sectors.

The UK market is anticipated to witness a prominent growth in the coming years. The increasing emphasis on digital transformation across various sectors, including banking, finance, and healthcare, drives market growth. UK organizations face stringent regulatory requirements that mandate robust identity management to ensure data protection. Additionally, the growing prevalence of remote work and the need for secure access to cloud-based applications have pushed companies to adopt IDaaS solutions.

Asia Pacific Identity as a Service (IDaaS) Market Insights

Asia Pacific is expected to grow at the fastest CAGR of 27.4% over the forecast period. As businesses and governments in the region embrace cloud computing, e-commerce, and digital financial services, the need for secure and scalable identity management solutions has become critical. Additionally, the rise in cyber threats and stringent regulatory requirements related to data protection and privacy drive organizations to adopt IDaaS to ensure secure access to their systems. The proliferation of mobile devices and the growing adoption of remote work practices have further accelerated the demand for IDaaS, making it an essential component of the region's digital infrastructure.

India market is projected to grow rapidly in the coming years. The country's ongoing digital transformation across various sectors drives the market demand. The government's push for digital initiatives such as Aadhaar, Digital India, and the increasing adoption of online services have driven the need for robust and scalable identity management solutions. Additionally, the surge in online banking, e-commerce, and digital payments has heightened the necessity for secure authentication processes. Businesses in India also recognize the importance of protecting customer data and complying with regulatory requirements such as the Personal Data Protection Bill. This has led to a growing reliance on IDaaS solutions to manage identity verification, authentication, and access control.

Key Companies and Market Share Insights

Some key companies in the identity as a service (IDaaS) market include Okta, Inc.; Microsoft; Thales; Ping Identity; IBM; and others.

• Microsoft Entra brand offers various important services as part of its Identity as a Service (IDaaS) offerings. Microsoft Entra ID offers thorough identity and access management, including components such as single sign-on, multifactor authentication, and conditional access. Azure AD B2C enables businesses to manage customer identities, backing social and local accounts with customizable policies.

• IBM’s Identity as a Service (IDaaS) offerings, under the IBM Security Verify brand, provide a comprehensive range of identity management solutions. IBM Security Verify offers access management, consumer identity, authentication, identity governance, and privileged access management, leveraging dynamic user, device, and environmental context for automated risk protection. IBM Cloud Identity ensures seamless access across cloud, on-premise, mobile, and IoT devices, supporting hybrid environments.

Recent Developments

• In July 2024, IBM Consulting announced a collaboration with Microsoft to enhance client security operations, focusing on cloud identity protection. This partnership leverages IBM's cybersecurity expertise and Microsoft's security technology to modernize and simplify security operations in hybrid cloud environments. The collaboration includes joint initiatives to develop and deliver integrated security solutions, particularly managing and securing cloud identities.

• In October 2023, Okta announced the launch of Identity Threat Protection, a new AI-powered solution that provides real-time detection and response to identity-based threats. This solution continuously assesses user risk throughout active sessions, enabling automatic responses to potential threats, such as session hijacking or phishing attacks. The product integrates with various security technologies and partners, such as CrowdStrike and Palo Alto Networks, to enhance security operations across an organization’s tech stack.

Identity as a Service (IDaaS) Market Report Scope

Global Identity as a Service (IDaaS) Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the identity as a service (IDaaS) market report based on type, deployment, end use, and region.

• Identity as a Service (IDaaS) Market Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Single Sign-On

  • Multifactor Authentication

  • Provisioning

  • Password Management

  • Directory Services

  • Audit, Compliance & Governance

• Identity as a Service (IDaaS) Market Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • Public cloud

  • Private cloud

  • Hybrid cloud

• Identity as a Service (IDaaS) Market End Use Outlook (Revenue, USD Billion, 2018 - 2030)

  • BFSI

  • IT & ITeS

  • Manufacturing

  • Government

  • Telecom

  • Energy and Utilities

  • Healthcare

  • Others

• Identity as a Service (IDaaS) Market Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Saudi Arabia

    • South Africa

    • UAE