In today’s digital age, the security and management of digital identities have become paramount. With the surge of cyber threats and the increasing complexity of digital ecosystems, businesses are in dire need of robust solutions to protect their digital assets.

Enter cloud-based identity management solutions, also known as IDaaS (Identity as a Service).

These are advanced systems that operate in the cloud, providing seamless integration and management of user identities across various platforms and services, business units, offices, levels of seniority, and so on. They not only ensure that the right individuals have access to the right resources but also offer a centralized platform for monitoring and managing these access points.

What is a Cloud-Based Identity Management Solution?

A cloud-based identity management solution or IDaaS is a comprehensive system that centralizes the management of digital identities across an organization. In its simplest form – it’s a password manager on steroids.

Unlike old identity management solutions, cloud-based identity management solutions operate from the cloud, meaning that it doesn’t require on-premises hardware or software to verify identity, resulting in big costs of data storage and potentially, employee overhead. Instead, IDaaS leverages the power of cloud computing to offer scalable, flexible, and efficient identity management services.

Like any good password or identity checker, a cloud-based identity management solution ensures that users can access only the resources they are authorized to, based on predefined roles and permissions.

For instance, an employee in the finance department might have access to financial data but not to HR records – and you can also change these permissions at any time. This differentiation ensures data integrity and security as well as the capability to be flexible in any situation.

Popular examples of cloud-based identity management solutions include:

  • Okta: A leading solution focused only on IDaaS, Okta is known for its robust features and seamless integrations. It offers adaptive multi-factor authentication, lifecycle management, and universal directory services. The trade-off is price; some users find its pricing model too steep.
  • Microsoft Entra (formerly Azure Active Directory): Microsoft’s identity solution integrates well with other Microsoft products, and is an obvious choice for businesses who run Windows. It offers features like single sign-on, multi-factor authentication, and device management. On the downside, its interface can be complex for beginners or people who are unfamiliar with Office 365.
  • OneLogin: Known for its user-friendly interface and strong security features, OneLogin is another IDaaS-only SaaS offering that provides unified access management, adaptive authentication, and user provisioning. What it makes up for in usability, it lacks in sophistication – OneLogin may lack some advanced features compared to its competitors.

Benefits of Using a Cloud-Based Identity Management Solution

  • Scalability: As with everything cloud-related, the most significant advantage of cloud-based identity management is the ability to scale as per the organization’s needs. Cloud-based solutions can easily accommodate growth without the need for significant infrastructure changes and without the need for substantial costs.
  • Cost Efficiency: By eliminating the need for on-premises hardware and software, businesses can save considerably on identity management and server costs. There’s also a reduction in maintenance costs (and the time and energy that maintenance requires) as cloud providers handle updates and patches.
  • Enhanced Security: These solutions come with advanced security features like multi-factor authentication, biometric verification, and encryption. Real-world data shows that businesses using cloud-based identity management have reported a 60% reduction in security breaches. Many businesses lack the robust cybersecurity practices necessary to protect company data.
  • Centralized Management: Having a single platform to manage all digital identities simplifies the process and reduces errors across teams and platforms. For instance, when an employee leaves the company, their access can be revoked from a central dashboard, ensuring no unauthorized access.
  • Instantaneous Changes: IDaaS allows for almost instantaneous management of data access. You can add or revoke permissions to all of the aspects of your data quickly and effectively, allowing you to efficiently manage access for all of your users, all the time.

Cons of Cloud-Based Identity Management Solutions

While cloud-based identity management solutions offer numerous benefits, they are not without challenges:

  • Data Privacy: Storing identity data in the cloud can raise privacy concerns, especially as we have seen time and again how vulnerable these companies are to hacking or data breaches. While most providers adhere to global data protection regulations and employ advanced encryption techniques to safeguard data, there is still a good possibility that your data will be exposed by hosting your data on their services.
  • Integration Issues: Some businesses might face challenges integrating the solution with their existing systems – for example, maybe your company solely uses Apple computers, so using a Microsoft solution may be a non-starter. Choosing a solution with a wide range of integration options can mitigate this issue, but it’s not always feasible for every business.
  • Cost Concerns: While cloud-based solutions can be cost-effective in the long run, initial setup costs might deter some businesses from jumping in. We will say that ultimately, IDaaS services pay for themselves, but it’s important for you to run a cost-benefit analysis to make sure it makes sense for your business – right now.
  • Big Business: The reality is that many IDaaS providers have hundreds or thousands of clients – and they frankly don’t care about all of them. Like many cloud providers, most IDaaS providers make money on volume – meaning they make the most money based on netting as many users as possible. This focus intrinsically means that your individual business is not as important to your cloud-based identity management service provider as it should be.

Key Considerations in Choosing an IDaaS Solution

1. Make Sure They’re Safe
First and foremost, you need to make sure your data is safe. A single data breach, on average, costs companies $4.5 million per breach – a 15% increase in the last 2 years. And that’s not including the intangible costs like a total loss of trust in your organization, the loss of irreplaceable data, and so on.

2. A Good UI
User experience is paramount. A Forrester Research study revealed that poor user experience leads 70% of users to abandon services, and you need your users to get on board with this system.

Features like single sign-on and self-service password resets can significantly enhance user satisfaction, but it’s important to note these kinds of accessibility buffs have the trade-off of decreasing security. It may make it easier for users to access your data – but it also makes it easier for bad actors to sneak in as well.

3. Easy Integration Into Your IT Infrastructure
People (and businesses) are lazy – so integration capabilities can’t be overlooked. An IDC report emphasized that businesses integrating their identity management solutions effectively see a 50% boost in operational efficiency. It makes sense – it takes less time, energy, and money to adopt a program that you are already somewhat familiar with.

The chosen solution should seamlessly integrate with your existing IT infrastructure. If you’re a Microsoft user, for example, you might want to go with Azure to complement the existing infrastructure. If you have IBM computers, maybe go with IBM’s service.

4. Scalability for Future Growth
Scalability is a vital element of IDaaS, so make sure your IDaaS provider has a clear and robust pricing plan for scalability. Oh, and make sure you know these prices, as they’ll affect your current business as well as future costs and profits.

Making sure your IDaaS provider can scale with you is crucial for ensuring profitability. A TechRepublic survey found that 60% of businesses had to upgrade their identity management solutions within two years due to scalability concerns – a HUGE miss for those businesses. Any solution here should be able to accommodate future growth – anything that falls short isn’t worth your time.

5. Vendor’s Track Record
Vendor reputation plays a crucial role, and luckily, in this world, some of the biggest, most reliable tech giants are your options for providers. The likes of Microsoft and IBM are amongst the biggest cloud-based identity management providers, so luckily you have some of the most trustworthy businesses in the world to partner with.

The trade-off, of course, is that these companies may be too big for your business, in which case, it’s up to you to take a deep and honest look at smaller vendors’ track records. Check in with their customers or former customers and see the level of support and the quality of the product provided. Don’t be afraid to do the legwork to find the right solution for you – there are no shortcuts here.

In conclusion, cloud-based identity management solutions are the future of digital identity security and management.

They offer a plethora of benefits, from scalability and cost-efficiency to enhanced security. While there are challenges, with the right provider and strategy, businesses can harness the power of the cloud to safeguard their digital assets at a price that won’t sink the business itself.

As our world becomes more and more reliant on data, locking your business’ data down – but also providing easy, painless access by your employees – becomes more important. This is where an IDaaS or cloud-based identity management service can come in to make everything that much more efficient, safe, and effective.

Further Reading

Future of Digital Identity Security