What Is Identity-as-a-Service (IDaaS)?

Moving your business to the cloud comes with many benefits in terms of cost, scalability, flexibility, and many more. This is why many businesses nowadays are adopting cloud services such as IDaaS. According to a report, the global market of IDaaS reached US$ 2.2 billion in 2020 and is likely to grow at 20% CAGR from 2022-2027. With the wonderful capabilities of the cloud, organizations find it easier and rewarding to use cloud services instead of building a solution in-house from scratch. But what is IDaaS all about? Let's find out!

Table of Contents

What’s IDaaS?

Identity-as-a-Service (IDaaS) is a term that refers to identity and access management (IAM) services offered via Software as a Service (SaaS) or cloud systems. IDaaS companies are third-party providers that build, operate, and maintain cloud-based authentication services and deliver them to businesses via a subscription plan. 

IDaaS aims to verify users to ensure only the authenticated and authorized users access an application or system and block unauthorized users and cybercriminals trying to access the system or data. 

Instead of building an in-house solution from scratch, businesses use X-as-a-Service, like IDaaS, for their operations. It is not only a cost-saving option but reduces complexities. For example, you might use Gmail or Doc by Google via a web connection or Netflix on a monthly plan. 

So, buying an IDaaS solution means paying for an API that acts as a mediator between an application and the end-user. It’s also used as an authorization service for users to access a specific part of a system or sensitive data. 

IDaaS is used for mainly three purposes:

  • Workforce IAM to manage your employees’ identities in your internal systems
  • B2B IAM for your enterprise customers and business partners 
  • Customer Identity and Access Management (CIAM) for end-users

What Are Its Main Components?

The main components of IDaaS are:

Single Sign-On 

Single sign-on (SSO) is an authentication technology that allows users to log in to an application using only one set of credentials and automatically access other connected applications without logging in again.  

For example, once you have accessed your Google account using your credentials, you can automatically access other related products like Gmail, Doc, Sheets, YouTube, etc. 

SSO offers high flexibility and ease without killing time and saving users from password fatigue. This is why it’s popular these days, and it also forms an important component of IDaaS. Apart from offering flexibility, it maintains security and encourages users to use strong passwords. 

Multi-Factor Authentication

Multi-Factor Authentication (MFA) is another trendy authentication method that demands more than one credential to verify a user’s identity trying to access an application or system. It provides better security than traditional username and password combinations for log-ins. It’s because passwords are easy to guess or steal and are vulnerable to various cyberattacks like credential stuffing. 

Upon implementing MFA like 2-factor authentication (2FA), users are asked to provide more credentials like one-time passwords (OTPs), security questions, biometrics like face recognition, fingerprint scanning, etc., on top of username and passwords. This increases the complexities for hackers as they will have to break more layers of security, which is time-consuming. It’s also possible that they may fail at this or take significant time, within which you can secure your credentials and account. 

The system will alert you upon detecting suspicious activities like signing in from a new device or location. If the attempt is not made by you, you can secure your account right away. 

So, IDaaS includes MFA as one of its most essential components to ensure only the authenticated users can access a particular application or system. 


Biometrics or biometric identifiers are unique physical characteristics of an individual, such as fingerprints, retina, iris, facial patterns, hand geometry, DNA sequence, etc. Digital systems utilize these characteristics to identify and verify a user when they try accessing a system and decide whether to grant them permission or not. 

IDaaS includes biometrics as one of its components where the biometrics system captures a user’s or employee’s unique physical identifier, such as fingerprint, and stores it in a database. So, when the user tries to log in to the system, they go through fingerprint scanning. If this input matches the stored data, they will be granted access to the system, else denied or blocked. 

Using biometrics to verify a user is secure because the identities are unique, and there is the rarest possibility of a match with another individual. And biometrics like DNA and iris are more secure and provide robust security. Hence, they are used in facilities requiring the highest level of security, such as defense, nuclear plants, etc. 

A common example of biometrics technology is your smartphone using your fingerprint to unlock itself. 

User Access Control

IDaaS systems are built with excellent user access controls and management. It allows better visibility into who has access to what information and controls their access. You can employ permission-based controls to allow users to access a specific system or data based on their roles in an organization. It helps an organization protect its sensitive information. 

In addition, the IDaaS system maintains a centralized user directory with all the essential information organized in one place. It allows you to know about the users and your customers well. This way, you can control access and prevent risks and errors from happening. It’s an innovative technique, much more efficient than when you had to control each user’s access manually. 

Cloud-based Architecture

IDaaS services have a multitenant, cloud-based architecture for deployment. It allows the service provider to issue updates, improve performance, and fix security problems quickly. This helps enhance user experience while protecting against cybersecurity risks. It also enables better governance and access provisioning. 

Furthermore, cloud-based architecture provides better scalability and flexibility to businesses to meet the growing demands of their users and customers. They can scale up or down based on their needs. It’s useful, especially during peak times such as festivities and events. In addition, cloud-based services save cost as businesses can pay only for the resources they use and prevent them from worrying about maintenance; the IDaaS service provider can take care of this. 

Automated Workflows

IDaaS incorporates automated workflows that enable organizations to implement and streamline access privileges for different applications effectively and with speed. You will be provided with a central dashboard to visualize everything in a single place. 

From deployment to using the IDaaS services is easy with a friendly user interface. It does not pose a steep learning curve for the IT teams, and they can easily manage access permissions and enforce compliance and governance rules. All these help reduce risks and expenditure while improving the productivity of your employees and users.  


Compliance is another crucial component of IDaaS, as sturdy rules and regulations are prevailing due to increased cyber security issues worldwide. So, organizations must adhere to local and state rules and regulatory bodies like HIPAA, GDPR, PCI DSS, etc. 

Using IDaaS makes sure you are following the applicable rules in your region. It will provide you with capabilities that also ease your audits with features such as reporting and analytics to establish how your user data is stored and utilized. It helps you produce necessary documentation for compliance and avoids any legal trouble or penalties. 

Why Should You Implement IDaaS?

Some of the benefits of using IDaaS services are as follows:

Improved Security 

Data breaches, identity theft, password stealing, etc., are some of the many cybersecurity issues troubling businesses worldwide. Using an IDaaS service comes with advanced security technologies such as MFA, biometrics, brute force prevention, robust access controls, and more to help protect your data and prevent intrusions and attacks. 

Higher Scalability and Flexibility

IDaaS services are cloud-based, which means you can scale your resources up or down any time you need based on your demands. It helps you deliver a consistent and excellent user experience by catering to their needs well. 

You get customized identity and access services tailored to your business needs, whether you are a large enterprise or a startup. You can also integrate cloud services with other useful tools to extend functionality and improve productivity. 

In addition, you can enjoy better flexibility with cloud services as no one binds you with anything. You can pay for the resources you use and change the service provider any time if you are not satisfied with their services. It also helps reduce your expenditure. 

Better Access Controls

You can enable better access controls with a centralized view of everything happening in your network, systems, and application. You can visualize who has access to what data and enforce access permissions to users based on their role in your organization. It helps you protect sensitive information, ensuring only authorized personnel can view such information. 

Maintain Compliance

Not adhering to data privacy rules and regulations in your area or country can lead to penalties. And if you don’t protect your data well, you can end up losing it to hackers. All this tarnishes your business image and results in lost opportunities and customer trust. 

IDaaS services are compliant with regulations to ensure you don’t have to face all these troubles. 


Identity-as-a-Service (IDaaS) can help a business in a variety of ways – security, privacy, customer experience, and compliance. It can also reduce your expenditure and help improve your access controls. Thus, enable IDaaS in your organization and leverage its benefits.