Identity as a Service Market

Market Definition

Identity as a service (IDaaS) is a cloud-based platform that provides centralized management, authentication, and authorization of digital identities across enterprise applications and IT systems. The market encompasses solutions such as single sign-on, multifactor authentication, identity governance and administration, directory services, password management, and identity lifecycle provisioning.

It also includes services that integrate on-premises and cloud environments, enable seamless secure access, support regulatory compliance, and streamline user role and permission management across organizations of all sizes and sectors.

Identity as a Service Market Overview

The global identity as a service market size was valued at USD 7.86 billion in 2024 and is projected to grow from USD 9.56 billion in 2025 to USD 44.62 billion by 2032, exhibiting a CAGR of 24.62% during the forecast period.

The market is experiencing significant growth due to the increasing adoption of cloud-based IT infrastructures and the rising need for secure digital identity management. Organizations are prioritizing robust access controls, seamless authentication, and efficient user lifecycle management to safeguard sensitive data and comply with regulatory requirements.

Key Highlights

1. The identity as a service industry was valued at USD 7.86 billion in 2024.
2. The market is projected to grow at a CAGR of 24.62% from 2025 to 2032.
3. North America held a share of 36.74% in 2024, valued at USD 2.89 billion.
4. The single sign-on segment garnered USD 1.84 billion in revenue in 2024.
5. The public cloud segment is expected to reach USD 32.51 billion by 2032.
6. The large enterprises segment is estimated to generate a value of USD 29.06 billion by 2032.
7. The IT & telecom segment is projected to reach USD 8.30 billion by 2032.
8. Asia Pacific is anticipated to grow at a staggering CAGR of 27.67% through the forecast period.

Major companies operating in the identity as a service market are Okta, Microsoft, NEC Corporation, Ping Identity, IBM, CyberArk Software Ltd., Oracle, CrowdStrike, Amazon.com, Inc., Alphabet Inc., Thales, Cisco Systems, Inc., Data Ramp, Quest Software Inc., and Simeio.

Increasing investments by enterprises and venture capital firms are fueling advancements. Companies are investing in research, product innovation, and global expansion to strengthen identity verification, access management, and cybersecurity solutions.

Rising funding enables vendors to develop advanced, scalable, and automated IDaaS offerings, addressing evolving security requirements. This influx of capital accelerates adoption across industries such as BFSI, IT & telecom, healthcare, government, and retail, supporting market expansion.

• In May 2025, Quest Software secured USD 350 million in financing from existing lenders. The initiative aims to accelerate AI innovation, expand identity security and management solutions, and enhance cyber resiliency across its software portfolio.

Market Driver

Rising Need for Cyberattack Prevention

The identity as a service market is witnessing notable expansion due to the growing demand for solutions that prevent cyberattacks. Organizations face increasing threats from identity-based attacks, including credential theft, phishing, and unauthorized access, which can compromise sensitive data and disrupt operations. 

IDaaS solutions provide centralized identity management, secure authentication, and real-time monitoring, enabling enterprises to detect and mitigate risks efficiently. By offering scalable and automated protection across cloud and on-premises environments, these solutions help organizations safeguard critical assets, maintain business continuity, and enhance overall cybersecurity posture.

Market Challenge

Increasing Complexity of Securing and Managing Hybrid Identity Ecosystems

A major challenge hindering the expansion of the identity as a service market is the growing complexity of managing and securing diverse identities across hybrid and multi-cloud environments. Enterprises must manage various identity types, including regular employees, privileged users with elevated access, automated service accounts, and AI-based agents, each with unique access privileges and usage patterns. 

This diversity leads to operational inefficiencies, increases the risk of identity sprawl, and heightens vulnerability to lateral movement and identity-based attacks. IDaaS providers address this challenge by offering unified solutions that provide centralized visibility, dynamic access control, and automated threat detection across all identities and platforms.

• In August 2025, CrowdStrike launched Falcon Next-Gen Identity Security, a unified platform providing end-to-end protection, visibility, and threat response for human, non-human, and AI agent identities across hybrid and multi-cloud environments.

Market Trend

Growing Adoption of Customer Identity and Access Management

The identity as a service market is experiencing a significant trend toward the growing adoption of customer identity and access management (CIAM) solutions. Organizations are increasingly prioritizing cloud-based platforms that provide seamless authentication, secure access, and efficient management of customer identities. 

CIAM adoption enhances user experience, strengthens security frameworks, and ensures compliance with data protection regulations. This trend reflects a notable shift toward centralized identity platforms to manage customer identities across multiple digital touchpoints while addressing evolving security and privacy requirements, positioning CIAM as a critical component in modern identity management strategies.

• In September 2024, NCC Group partnered with Okta to provide enhanced Customer Identity and Access Management (CIAM) services. The partnership combines the company's cyber resilience expertise with Okta’s Identity and Access Management (IAM) and adaptive Multi-Factor Authentication (MFA) solutions to secure customer and business data, mitigate identity risks, and deliver end-to-end identity security across on-premise and cloud environments.

Identity as a Service Market Report Snapshot

Market Segmentation

• By Solution Type (Single Sign-On, Multifactor Authentication, Identity Provisioning, Password Management, Directory Services, Identity Governance & Administration, and Others): The single sign-on segment earned USD 1.84 billion in 2024, mainly due to its ability to streamline user access and enhance security across multiple applications.
• By Deployment (Public Cloud, Private Cloud, and Hybrid Cloud): The public cloud segment held a share of 70.08% in 2024, fueled by its scalability, cost-effectiveness, and ease of integration with enterprise systems.
• By Enterprise Size (Small and Medium-sized Enterprises (SMEs), and Large Enterprises): The large enterprises segment is projected to reach USD 29.06 billion by 2032, propelled by higher demand for centralized identity management and compliance with stringent regulatory standards.
• By Vertical (BFSI, IT & Telecom, Education, Manufacturing, Public Sector, Healthcare, Retail & E-commerce, and Others): The IT & telecom segment is estimated to reach USD 8.30 billion by 2032, supported by the sector’s increasing adoption of cloud services and digital transformation initiatives.

Identity as a Service Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

North America identity as a service market share stood at around 36.74% in 2024, valued at USD 2.89 billion. This dominance is reinforced by the widespread adoption of cloud-based infrastructure and digital transformation initiatives across enterprises. Organizations increasingly prioritize securing diverse digital identities, including employees, partners, and automated systems, across hybrid IT environments. 

The presence of leading IDaaS solution providers and advanced technological infrastructure enables the rapid deployment of identity management solutions. Additionally, rising investments in AI-driven identity security, unified access management, and customer identity and access management (CIAM) solutions further strengthen regional market growth.

The Asia-Pacific identity as a service industry is expected to register the fastest CAGR of 27.67% over the forecast period. This growth is bolstered by the rapid adoption of digital identity and trust solutions across industries such as healthcare, education, and finance, where secure data management is critical. 

Enterprises are increasingly implementing verifiable credentials and scalable identity platforms to enhance cross-border interoperability and strengthen digital security. Rising collaboration among regional technology providers, coupled with growing awareness of identity verification and secure access needs, is further accelerating the deployment of next-generation identity as service solutions.

• In October 2024, Accredify joined the Asia Pacific Digital Identity Consortium (APDI) to advance digital identities and verifiable credentials, promoting secure data management, interoperability, and digital trust across the Asia-Pacific and Japan (APJ) region.

Regulatory Frameworks

• In the U.S., identity as a service (IDaaS) solutions are regulated under frameworks such as the Federal Information Security Management Act (FISMA) and compliance standards like the Health Insurance Portability and Accountability Act (HIPAA), which govern the security and privacy of digital identities and access management.
• In Europe, IDaaS providers must comply with the General Data Protection Regulation (GDPR), ensuring data protection, privacy, and lawful processing of personal and identity information.
• In Japan, IDaaS solutions adhere to the Act on the Protection of Personal Information (APPI), regulating the collection, use, and storage of personal data for identity management.
• In India, IDaaS providers follow guidelines under the Information Technology Act and the Digital Personal Data Protection Act, which establish standards for secure handling of digital identity and access to data.
• In China, IDaaS services must comply with the Personal Information Protection Law (PIPL) and Cybersecurity Law, governing secure management, processing, and cross-border transfer of identity data.

Competitive Landscape

Key players in the identity as a service industry are emphasizing product innovation and research and development to enhance their solutions. They are launching next-generation IDaaS platforms that offer advanced identity verification, access management, and machine identity capabilities. These solutions focus on improving security, scalability, and compliance across hybrid and multi-cloud environments. 

Vendors are also integrating AI and automation features to streamline identity management, reduce operational complexity, and deliver seamless user experiences. Continuous innovation allows companies to differentiate their offerings, address evolving enterprise requirements, and maintain competitiveness.

• In November 2024, Eviden launched Evidian Orbion, a next-generation IDaaS solution that integrates Identity Governance and Administration, Access Management, and Privileged Access Management for hybrid environments. The solution is designed to offer scalable, secure identity and access management while supporting regulatory compliance and EU data residency requirements.

Key Companies in Identity as a Service Market:

• Okta
• Microsoft
• NEC Corporation
• Ping Identity
• IBM
• CyberArk Software Ltd.
• Oracle
• CrowdStrike
• com, Inc.
• Alphabet Inc.
• Thales
• Cisco Systems, Inc.
• Data Ramp
• Quest Software Inc.
• Simeio

Recent Developments (Product Launches)

• In April 2025, Saviynt launched its AI-powered Identity Security Posture Management (ISPM) as part of its converged Identity Cloud platform. The solution provides organizations with comprehensive identity and access insights, enhanced data hygiene, risk prioritization, and audit preparedness while enabling proactive identity security management across on-premises and cloud environments.
• In February 2025, Teleport launched machine & workload identity, a solution that provides authentication, authorization, and access control for non-human identities. It eliminates static credentials, enforces zero trust security, and ensures compliance across hybrid and multi-cloud infrastructures.
• In November 2024, Shufti introduced Shufti Fast ID, an identity verification, authentication, and portable identity solution enabling seamless facial biometric authentication, reusable verified documents, and KYC/AML-compliant verifications across partner sites to enhance user experience and reduce friction.
• In October 2024, SailPoint Technologies launched SailPoint Machine Identity Security, a new identity security cloud product built on SailPoint Atlas to simplify the management, security, and lifecycle of machine identities. It provides unified visibility, governance, and automated lifecycle management for both human and machine identities.