What to Know About the Identity and Access Management Market
Cyberattacks aren’t really phased by the ups and downs of the global economy. The continued ramp-up in the number and sophistication of attacks points to that being correct, and with the number of connected devices poised to grow further, there is little reason to think this will change.
Per Statista, the number of Internet of Things (IoT) devices worldwide is forecasted to almost triple from 9.7 billion in 2020 to more than 29 billion in 2030. The growth in the number of connected devices will lead to substantial increases in the potential attack points to protect, not to mention the growth in potentially valuable data generated by those devices. With this background, it is easy to see why the global cybersecurity market size is forecasted to reach $345.4 billion in 2026, up 59% compared to 2021.
Companies Cyberattacked, Personal Data Hacked
While companies tend to be the victim of cyberattacks, Verizon’s 2022 Data Breach Incident Report found that 70% of the data compromised in cyberattacks is personal data. This is because cyber attackers are looking to monetize stolen data on the dark web. According to the Dark Web Price Index 2022, individual credit card data can fetch $10-$120. A verified CashApp account can get $800, a hacked Coinbase (COIN) verified account $120, a hacked Facebook account $45, a U.S. driver’s license $150 and various European Union passports $3,800.
Cybersecurity firm Trustwave pegged the black-market value of medical records at $250 each vs. $1 for social security numbers. The reason for that sharp difference is the amount of information contained in one’s medical records, including the patient’s medical and behavioral health history and demographics, as well as their health insurance and contact information. And unlike a credit card or Facebook account, medical records can’t be canceled and replaced.
How can individuals protect their information? The easiest free thing to do is to use strong, unique passwords. Anti-virus software and two-factor authentication are some other steps that can be taken as well. Other options include restricting the data collected during your online activities by using browser extensions that block ads and the data they collect. There are also identity protection services like those from Norton LifeLock (NLOK), Allstate’s (ALL) Identity Protection, Experian’s (EXPGY) Identity Works, Fair Isaac’s (FICO) My FICO and Equifax’s (EFX) ID Watchdog.
These and other services monitor your personal information, credit files and the web, as well as alert the user for suspicious or fraudulent activity. And if you are the victim of fraud, many of these services also help assist in restoring your identity. The expectation for cyberattacks in the coming years as well as growing concerns over privacy has led Fortune Business Insights to forecast a surge in the identity theft protection service market to $27.9 billion by 2029 from $10.07 billion in 2021.
Identity and Access Management Is a Market to Watch
As companies look to thwart the increasing number of attacks by bad actors, cybersecurity isn’t the only market poised to grow in the coming years. Another is the identity and access management market, one that includes companies such as Forge Rock (FORG), Okta (OKTA), Bio-Key International (BKYI) and OneSpan (OSPN). We can boil identity management down into two areas: authentication and authorization, better known as "Who are you?" and "Are you allowed to be doing this?"
In addition to security concerns, continued adoption of cloud and regulatory compliance, the global identity and access market is expected to reach $34.5 billion by 2028 vs. $12.26 billion in 2020, according to Fortune Business Insights. That outlook led private equity company Thoma Bravo to acquire three identity management companies so far in 2022. In April, it acquired SailPoint for $6.9 billion, snagged Ping Identity for $2.8 billion in August, and earlier this month, the firm announced it would acquire ForgeRock for $2.3 billion. That followed Okta’s acquisition of Auth0 for $6.5 billion as well as Ping’s scooping up Singular Key and One Identity purchasing OneLogin, all of which happened in 2021. That year also brought the IPO of Clear Secure (YOU), the company behind secure identity platform Clear.
Deals in the venture capital space confirm the evolving nature of the identity and access management space in part to customer experience, frictionless security and privacy. This has put both investors and companies on the prowl for next-generation solutions. While venture funding has softened in recent months, Ping Identity launched Ping Ventures, a $50 million vehicle to invest in early-stage technology companies that are focused on protecting digital identity and access.
$3.2 billion flowed into the identity and access management space in 2021, up from $1.3 billion the year before. Notable investments in the last several quarters include those in Israel-based passwordless, fast identity online (FIDO) based authentication company Transmit Security, New York-based Socure and Vancouver-based Trulioo.
Like we’ve seen with other developing markets, as we move through the multi-year forecast for the identity management market, we expect to see additional M&A activity. And when the IPO market window once again opens, odds are we will see new public identity management technology and companies as well.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Chris Versace
Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.
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Mark Abssy
Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.
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