Article

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

What is IDaaS?

Identity-as-a-service, or IDaaS, is an application delivery model (like software-as-a-service, or SaaS) that allows users to connect to and use identity management services from the cloud.

Also referred to as cloud-based identity security, the shift to deploy IDaaS began several years ago and was led by companies with digitally-driven IT adoption strategies. Many IDaaS systems leverage the power of cloud computing and adaptive authentication as a way of improving or speeding up these business processes. This level of identity and access management (IAM) computing uses online computer power, database storage, and other IT resources.

What is Identity Management?

Identity management ensures the right people in an organization have the right access to the right resources. Using IDaaS technology to properly identify, authenticate, and authorize employees within an organization, these systems use access rights to prevent unauthorized users from gaining access to confidential files or documents. With cybersecurity threats continuing to grow, identity and access management helps keep enterprise protection organized.

When did IDaaS emerge?

The emergence of IDaaS is tied directly to the cybersecurity threats being born from an increasingly digital universe.

A secure identity platform became the only way to keep up with the mounting identity access tasks that must be completed to ensure airtight protection. With self-service solutions, enterprises couldn’t ensure a quality user experience for their employees without spending valuable time maintaining the system, because manual updates have an inevitable ability to be overlooked.

IDaaS solutions provided automated, sustainable protection for growing companies not wanting to be bogged down with IAM responsibilities. The result was inevitable—an increased demand for IAM solutions that are built to adapt to the fluid cybersecurity landscape.

Why is cloud-based Identity Security critical?

The right IAM solution can help your organization effectively address today’s complex business challenges, balancing three critical objectives:

  • Deliver access services efficiently and cost-effectively. By providing self-service access request tools and provisioning, IDaaS can streamline the delivery of user access across the organization while continuously enforcing governance rules and compliance policies. IDaaS also empowers business users to manage their own access and passwords, thereby reducing the workload on help desk and IT operations teams.
  • Protect against internal and external security threats. Effectively securing an enterprise IAM system requires quick identification of potential exposures, such as inappropriate access, policy violations, and unsecured data and applications. The right IDaaS solution can help enterprises proactively detect and remediate inappropriate access, strengthen password policy, and eliminate risks such as orphan or rogue accounts.
  • Meet regulatory compliance requirements around security and privacy. IDaaS can help your organization replace expensive paper-based and manual access reviews and certifications with automated tools. Not only can you significantly reduce the cost of IAM compliance for regulations such as the General Data Protection Regulation (GDPR), you can also establish repeatable practices for a more consistent, auditable, and secure access certification effort.

What are examples of IDaaS?

Single sign-on (SSO)

Single sign-on (SSO) is an authentication service allowing a user to access multiple applications and sites using one set of credentials. For example, when a bank automated their identity management processes, they needed an IDaaS solution that could seamlessly funnel hundreds of “applicants” onto their platform without sacrificing security. Using an SSO solution for their customer identity problem, they’re able to take the strain off their helpdesk while drastically reducing the time it takes to gain access to their platform.

Multi-Factor Authentication (MFA)

MFA gives enterprises advanced security and authentication controls using an organization’s preferred MFA solution provider. When a health services company needed to move its legacy systems to an online solution while also procuring IAM services, they used IDaaS automation to ensure every user is transferred to the new server without sacrificing security.

Identity Management

Identity and access management is a specialty discipline within cybersecurity designed to ensure that only the right people can access the appropriate data and resources — at the right times and for the right reasons. When a university had an immediate need to relieve the headaches caused by manually managing passwords for their online graduate school, they deployed an identity management program that automated the process of onboarding students while getting them email, application, and other needs met faster.

Provisioning

When a worker is assigned a role through an organization's system, they would be automatically provisioned access with a role-based IAM solution. If that worker changes roles or leaves the organization, their IAM profile is adjusted or removed immediately from the active directory.

For example, a promotion from IT technician to IT manager would cause complications in a manual system, as the enterprise would need to solve for IT access and management access at the same time. Using IDaaS to automate this process takes the pressure off of team members while mitigating user-error risks that come with a self-service solution.

The power of Identity from the cloud

The right IAM solution will help organizations manage and control access across every user. By leveraging a unified system to manage access to both on-premises and digital resources, the enterprise can stay in control of identity no matter where an application is deployed:

  • See everything. IAM solutions must be able to connect to all enterprise systems, from the legacy applications that have been in use for years, to the SaaS applications being adopted today. They must provide visibility into all the information about a user’s identity, across all the applications an enterprise uses, all the data they have and across all users – no matter where they are located or what devices they may use. Doing this with a self-service solution would be nearly impossible without an entire department dedicated its time and resources to the effort, which still doesn’t consider the impact of user-error.
  • Govern everything. Organizations need to know who should have access, who does have access, and what users are doing with their access to all applications and data. This requires the ability to define a desired IAM state and continually assess where access is not aligned with the model. When these updates are automated, the enterprise's only responsibility is to decide what the rules of the system are—and let the system do the work.
  • Empower everyone. Let business users work how they like to work, wherever they are and on whatever device they use. Empowering users with identity and access management, while balancing the security and risk management needs of the organization, enables the enterprise to safely increase collaboration both inside and outside the network. IAM solutions not only keep organizations better protected, they create the foundation for better relationships with employees—giving them the power to safely obtain resources, collaborate remotely, and maintain flexibility.

DISCLAIMER: THE INFORMATION CONTAINED IN THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND NOTHING CONVEYED IN THIS ARTICLE IS INTENDED TO CONSTITUTE ANY FORM OF LEGAL ADVICE. SAILPOINT CANNOT GIVE SUCH ADVICE AND RECOMMENDS THAT YOU CONTACT LEGAL COUNSEL REGARDING APPLICABLE LEGAL ISSUES.

Answers to frequently asked questions about IDaaS (Identity-as-a-Service)

What is identity management?

Identity management is the set of policies, processes, and technologies used to create, maintain, verify, and remove digital identities to ensure that users (i.e., people and systems) have access to the resources they need when they need them. The five main areas that identity management covers are:
1. Authentication—who the user is
2. Authorization—what the user is allowed to do
3. Provisioning / deprovisioning—on/offboarding
4. Access governance—certifications and role modeling
5. Auditing and analytics—monitoring usage, detecting anomalies, and reporting abuses

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

Identity-as-a-Service (IDaaS) is a cloud-based model, typically offered on a subscription basis, for delivering identity and access management (IAM) solutions. IDaaS offers organizations faster deployment, lower operational costs, greater scalability, and increased flexibility to authenticate, authorize, and manage user identities.

Unlike traditional on-premises IAM tools, IDaaS platforms centralize and automate user management by leveraging the cloud’s dynamic resources, such as real-time access controls, secure authentication processes, and continual updates.

When did IDaaS emerge?

IDaaS emerged with the rise of cloud IAM in the late 2000s as cloud-first vendors began offering single sign-on, multi-factor authentication, and user provisioning as a service. The emergence of IDaaS closely aligns with the escalating complexities and volume of cybersecurity threats driven by rapid digital transformation across industries.

What drove the adoption of IDaaS?

As organizations shifted from traditional, on-premises identity and access management (IAM) systems to cloud-based environments, manual identity lifecycle management proved to be lacking in scalability, security, and compliance. IDaaS offered more agile, automated, and comprehensive solutions for managing identities, such as employees, customers, partners, applications, systems, and connected devices. Among the specific catalysts for IDaaS adoption are:

  • Explosion of SaaS applications
  • Hybrid IT architectures
  • Increased security and compliance requirements
  • Need for automated identity lifecycle and HR integration
  • Proliferation of remote work and BYOD (bring your own device)
  • Requirements for continuous, real-time authentication and authorization
  • Use of multi-factor authentication and adaptive authorization across many applications
  • Zero trust and identity-first architectures
Why is IDaaS important?

IDaaS is important because it centralizes and hardens identity controls as a cloud service, making authentication, provisioning, governance, and auditing more scalable and secure. It also makes it far easier to manage organizations’ diverse ecosystem of users, applications, and devices across both on-premises and cloud environments.

What are some capabilities of IDaaS solutions?

Among the main capabilities of IDaaS are:

  • Access governance
    Access governance defines who should have access and how it is controlled (e.g., role modelling, entitlement catalogs, access certifications, Separation of Duties (SoD) analysis, and policy enforcement). Access governance typically includes automated certification campaigns, role mining, and attestations. It is also important for compliance as auditors look for certification logs, remediation tickets, and role and entitlement change history.
  • Adaptive and risk-based authorization
    This type of authorization enables dynamic access decisions based on signals such as device posture, location, IP reputation, time of day, risk score, and user behavior. It is implemented as risk policies that add authentication steps or block access.
  • Directory services and federation
    Directory services provide an authoritative identity store, such as a cloud directory, synced Active Directory, or Lightweight Directory Access Protocol (LDAP). Federation supports cross-domain single sign-on (SSO).
  • Multi-factor authentication (MFA)
    MFA adds additional authentication factors (e.g., push notifications, passwords or personal identification numbers (PINs), biometrics, or tokens) to reduce credential compromise by adding extra layers of authentication.
  • Password management
    Password management includes services to support self-service password reset (SSPR), strong passwords, password rotation policies, and modern passwordless (e.g., FIDO2 and passkeys) workflows.
  • Policy-as-code
    With password-as-code, access rules are represented as versioned, testable code (e.g., role definitions, policy templates, and automated approval gates) that can be deployed and reviewed like software.
  • Single sign-on (SSO)
    SSO centralizes authentication to allow users to sign in once to access multiple apps. Federation protocols, such as SAML and OIDC, are commonly used to support SSO. The OAuth protocol is used for delegated authorization.
  • User provisioning and lifecycle management
    User provisioning and lifecycle management enable the automation of workflows, including joiner, mover, and leaver. This automation includes creating, updating, suspending, and deleting user accounts to avoid orphan accounts.
What are the main benefits of IDaaS?

IDaaS empowers organizations to scale securely and flexibly, supporting digital transformation initiatives while maintaining robust protection for users, data, and critical business applications by:

  • Accelerating threat detection and response.
  • Automating provisioning and deprovisioning.
  • Centralizing authentication and single sign-on (SSO).
  • Enabling the enforcement of adaptive security policies in real time.
  • Enforcing zero trust controls.
  • Ensuring compliance with various legal and regulatory requirements.
  • Expediting SaaS and partner integrations.
  • Improving visibility, control over user access, and audit trails.
  • Offering higher digital resilience and availability.
  • Streamlining access provisioning and deprovisioning.
  • Supporting stronger, easier multi-factor authentication (MFA) and adaptive authorization.
What are real-world use cases for IDaaS?

Real-world incidents consistently demonstrate the necessity of robust cloud-based identity security in defending against sophisticated cyber threats. The following use cases illustrate the value of IDaaS across several industries.

Financial services

  • SSO and multi-factor authentication to protect online banking and trading platforms.
  • Customer onboarding and identity access management that includes KYC (know your customer) integrated into the account sign-up process, progressive profiling for adaptive authorization, and secure customer single sign-on (SSO).
  • Privileged access management controls for traders to help meet certain Payment Card Industry Data Security Standard (PCI DSS) and Sarbanes-Oxley Act (SOX) audit requirements.

Healthcare

  • Single sign-on (SSO) and adaptive multi-factor authentication (MFA) to assist with Health Insurance Portability and Accountability Act (HIPAA) compliance and aid clinicians accessing electronic health records (EHRs) and telehealth applications.
  • HR-driven user provisioning and deprovisioning to eliminate orphan accounts when staff change roles or leave.
  • Vendor and partner federation for secure access to lab systems, imaging, and research data without creating local accounts.

Technology and SaaS providers

  • Federated single sign-on (SSO) and tenant identity isolation for multi-tenant applications (e.g., SaaS productivity applications and collaboration platforms).
  • Identity management for development and test machines, such as short-lived tokens and service accounts for Continuous Integration and Continuous Delivery/Deployment (CI/CD) pipelines.
  • Self-service and passwordless options to reduce help-desk load and improve developer user experience.

Retail and e-commerce

  • Customer identity and access management that supports a streamlined customer account creation and login process, as well as fraud-resistant authentication (e.g., adaptive and risk-based authentication).
  • Centralized employee access for POS (point of sale), inventory, and supplier portals with JIT (just in time) access for contractors.
  • Rapid onboarding of seasonal staff via automated provisioning and scoped entitlements.

Government

  • Federated identity for inter-agency services and citizen portals with auditable access controls.
  • Device posture checks before granting remote workers and contractors access to meet regulatory security baselines.
  • Role-based access governance and certification to show auditors proof of least privilege access controls for compliance checks.
Date: December 24, 2025Reading time: 7 minutes
Identity and Access ManagementIdentity security

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