With COVID-19 forcing businesses of all sizes to move to remote working and connect with consumers online, Okta plans to leverage Auth0’s consumer identification product to fuel growth in the $55 billion identity industry that splits as $25B for customer identity and $30B for workforce identity.
What does this acquisition imply, and why is it relevant?
For starters, this announcement reveals the dynamics of the historical and present-day scenario of the global consumer identity and access management (CIAM) market. Recent acquisition and investments show that a cloud-based customer identity platform to deliver secure digital experience and protect consumer privacy is gaining outrageous momentum.
Here are some of the notable events in CIAM in recent times:
- In July 2020, Auth0 closed a $120 million round of Series F funding, which brought the company’s valuation to $1.92 billion and total capital raised to more than $330 million.
- In September 2019, Denver security tech company Ping Identity went public with more than $1B valuation.
- In January 2019, the Akamai Intelligent Edge Platform acquired Janrain to provide a highly-secure and resilient identity management environment for businesses and their customers.
- In July 2018, cloud-based CIAM platform LoginRadius announced $17M Series A Funding from Microsoft’s Venture Fund to accelerate its product innovation.
- In November 2017, SAP completed the acquisition of customer identity management firm Gigya for $350M in a smart move to strengthen its Hybris e-commerce division.
- In June 2016, Vista Equity Partners acquired majority ownership of Ping Identity in a leveraged buyout for $600 million.
There were no pure-play CIAM vendors a decade ago and big players such as IBM, Oracle, Microsoft tried to extend their Employee IAM offering to customer identity use cases (which did not work). However, the newer players like Auth0, Gigya, ForgeRock, and LoginRadius have more recently driven innovation and accelerated adoption of Customer IAM technology. There’s no doubt that identity is taking over as a strategic imperative for winning big in the digital economy.
Why are businesses investing like never before?
With massive penetration of smartphones, Internet and cloud, the world has gone digital and consumers expect everything online. Especially in this pandemic period, consumers have become increasingly reliant on online purchases.
Brands have no choice but to build frictionless and secure digital experience for their customers while protecting their privacy. Consumers expect to access most of the services via a variety of devices and web applications, prompting businesses to invest in advanced technology that prevents cybercriminals from gaining access to sensitive information. Among security requirements include global compliances like the GDPR and CCPA. Customer IAM is emerging as foundational technology.
Even analysts firms like Forrester, Gartner and KuppingerCole reported about this new and exciting category, where LoginRadius has been emerging as a leading vendor, time and again. In the recent Forrester Wave on CIAM, LoginRadius’ technology was ranked #1 above Auth0 and Okta.
What does the future look like?
Current CIAM players represent the tip of the iceberg of $25B revenue opportunity in Customer IAM space. My estimate is that less than 1.5% of this revenue opportunity is tapped so far. More importantly, the total addressable market is growing exponentially as the world gets digitized.
This is an exciting phase of the IAM space particularly for the new category, Customer IAM (CIAM).
I see three key trends emerging in coming years:
- Organizations stop building and maintaining customer identity systems in-house rather purchasing a cloud-based CIAM platform to save on massive spending and get faster time-to-value.
- In post-COVID world, the consumer-facing digital transformation will drive massive demand for CIAM.
- As Okta CEO Todd McKinnon said, the identity is becoming a first-class cloud category alongside infrastructure, a collaboration of enterprise software, and others.
I’m excited for all the CIAM players.
Together, let’s build a world which is more secure, where privacy is protected and where consumers have delighted digital experience.
*** This is a Security Bloggers Network syndicated blog from LoginRadius Identity Blog authored by Rakesh Soni. Read the original post at: https://www.loginradius.com/blog/start-with-identity/okta-acquires-auth0/