IDaaS has several characteristics that make it an excellent opportunity for MSPs, particularly for MSPs that are also providing private cloud and hybrid cloud (a combination of private and public cloud) services to their customers.
Demand – IDaaS is one of the fastest growing segments in cloud computing, with Gartner predicting a 55% compound annual growth rate (CAGR) and a total market size of $US 7.3 billion by 2019.
Security – Security continues to be the number one inhibitor of cloud adoption, and effective identity management is the foundation of security. By providing a secure, robust identity system for their customers, MSPs can address cloud security concerns and accelerate their customers’ migration to the cloud.
Value – Identity services are high-value. Simplifying end-user access to low cost cloud SaaS applications adds value while increasing end-user satisfaction and enhancing overall security. Adding user self-service functions adds further value by streamlining the password reset and application access request processes and therefore reducing IT help desk costs.
Revenue – IDaaS can provide a significant and reliable new revenue stream for MSPs. Vendors such as Okta, Microsoft and OneLogin offer IDaaS on a per-user/per-month basis with list prices ranging from $US 6 per user/per month. Added-cost features such as multi-factor authentication, mobile device integration, and automated identity provisioning can lift the list price to $15 per user/per month.
Stickiness – Identity is a fundamental component of security and application infrastructure, and properly implemented, provides a way to create and maintain long-term relationships with enterprise customers. Active Directory is a prime example of how sticky identity services are in the enterprise.
Reduce vendor lock-in – MSP managing SaaS applications for their customers risk losing them if they switch SaaS vendors – the customers may simply work directly with the old SaaS vendor. Providing the underlying identity services (including single sign-on) helps insulate MSPs and their customers from the effects of vendor changes, albeit that there may be a migration process.
Service Opportunities – Because few enterprises will simply lift and shift their entire IT service catalog into the cloud, a hybrid (part on-premises, part in the cloud) environment will be the norm for most enterprise customers. This creates several high-value services opportunities for MSPs: