Last week Gartner released its “Top 10 Security Predictions” for 2016, and what caught my eye was prediction #6 that said “By 2019, 40% of IDaaS implementations will replace on-premises IAM implementations, up from 10% today.”
This is an interesting prediction, because it has been a common perception that Identity-as-a-Service (“IDaaS”) deployments have historically attached to net new infrastructure and apps within organizations (e.g. enabling single sign-on, MFA, and provisioning for relatively new deployments of SaaS apps such as Office 365, ServiceNow, Box, Dropbox, etc.). Which in turn meant that customers have typically left their pre-existing Identity and Access Management (“IAM”) for their on-premises environment “as is” based on the realization that legacy IAM solutions cannot be easily extended to the cloud. So in effect, organizations have been deploying IDaaS offerings in parallel to their existing on-premises IAM solutions, and usually have the two indirectly work together by separately integrating with a common identity store such as Active Directory.
But the Gartner prediction signals that IDaaS is now “crossing the chasm” and moving away from visionaries and early adopters to mainstream market adoption. IDaaS will not only continue to be deployed in parallel to legacy IAM offerings, but will also start to replace legacy IAM deployments in a meaningful manner. So much like how other traditional software markets such as Customer Relationship Management (“CRM”) have been disrupted by cloud-based offerings, Gartner is now saying you are going to see cloud-based offerings disrupt this large $5+ billion IAM market.
I agree. First, if you eyeball the IAM market sizing metrics from various analyst firms, the disruption of legacy IAM vendors such as CA, IBM, Oracle, Novell, Dell, etc. is already occurring. For example, IDC says that the overall IAM market is growing from $5.4 billion in 2015 to $5.9 billion in 2016. That’s a bit under 10% year over year growth, which is impressive by itself and actually makes IAM one of the fastest growing markets in security (which itself is of the fastest growing markets in software).
But the market for IDaaS offerings is growing even faster. Per the recently published Gartner Magic Quadrant for IDaaS (which you can view here), Gartner states that “the market size for multifunction IDaaS at year-end 2015 was just over $600 million … We estimate that 2016 revenue will be approximately $1 billion.” That means, per Gartner, that in the same 2015-2016 timeframe, IDaaS is growing 66% year over year.
So given the relative size of what Gartner projects IDaaS market segment to be in 2016 ($1 billion) compared to an overall market size ($6 billion) per IDC, and the relative growth of each (66% for IDaaS vs. 10% for the overall Identity market), it is clear that the slice of the pie called IDaaS is outpacing the growth of the overall market and therefore replacing pre-existing offerings.
Second, at Centrify we are starting to see this ourselves in that customers are looking to us to not only attach to “greenfield” SaaS and IaaS deployments, but displace SSO and privileged identity management solutions. In other words, historically our Centrify Privilege Service and Centrify Identity Service solutions — both of which are subscription service offerings — mainly competed in newer greenfield opportunities where there was not an incumbent IAM vendor that we competed against. But lately customers have been increasingly coming to us and asking how we can replace legacy password vaults, application single sign-on offerings, etc. At the same time, customers are also now asking that Centrify Server Suite — our traditional on-premises and perpetual license offering — be increasingly deployed on AWS and also procured as a subscription service.
So the combination of Gartner’s predictions, a look at market sizing and growth patterns, and our own firsthand recent customer engagements are all signals that cloud-based offerings for Identity are now replacing traditional legacy offerings, much like cloud-based offerings have taken over other sectors of software.
At Centrify we feel great about our position in the Identity-as-a-Service market. In fact, a few weeks ago Gartner released its Magic Quadrant for Identity and Access Management-as-a-Service, and we are pleased to note that Centrify has been named a Leader by Gartner in this Magic Quadrant (“MQ”).
This is the third year in a row we have been included in the Gartner IDaaS MQ*, and we believe placement in the Leader’s quadrant validates our unique ability to secure access to apps and infrastructure from any device for all users. You can click here for a complimentary copy of the full report, which includes more color commentary from Gartner on how IDaaS is beginning to replace traditional IAM implementations.
*Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.