Sizing up the Access Management Market

Thank you. Thanks for having me here and thanks for the introduction. As Mattias said, I am a research Analyst here at KuppingerCole and one of my tasks is actually calculating the market sizing and making predictions and forecasting. And today we will talk about the market sizing and the predictions that we have for the access management segment. In today's agenda, we have the market definition. What do we understand by access management and what is covered in this, in this calculations? What are the relevant metrics that help us to understand the market?

What are our, our predictions and the revenue split of this segment? We will have a resume with the figures at the glance, you know, the more relevant figures that we can see after analysis, and we will explain a bit about our methodology in terms of forecasting and how do we calculate and, and foresee this market. Let's begin then with the market definition and the relevant metrics.

When we talk about the access management, we talk about a group of capabilities that are supporting the access management requirements for organizations, and when we say capabilities, we include authentication, authorization, sign on, and identity federation. This market, the access management is one of the core areas within the, the scope of identity and access management.

And this segment is growing and is gaining a lot of place due to emerging requirements for integrating business partners and customers, especially because as well there is a trend of working from anywhere and it is also impacting in this segment. Now there are different options and different solutions available in, in the market to different organizations.

Now, on the one hand, we see the identity as a service deployment. These solutions are cloud integration and, and yes, as well, they are easy to adopt. And these services, these solutions are actually overtaking the on-premises in the identity access management market. Then we have as well the alternative to some organizations to manage the access management solutions themselves, and they provide managed services offering on premises and software as a service deployment. And then we need to consider as well the customer identity access management capabilities.

This particular sector deals with data sharing, data privacy regulations, and it include consumer notification and consent management and it Verizon, across different vendors. Now, understanding what this market is, we need to see what are the metrics that will help us to see the full picture of what is happening in the market or the relevant metrics that will help us. One of them is the market size, which is actually the total revenue that this product or this services are actually contributing to this segment.

We exclude from this calculation the professional services, so the market size that we calculate for the access management market includes subscriptions, software license and maintenance. On the other hand, we also pay attention to the component annual growth rate. As the award says it itself, it is actually an average growth rate per year for the market segment. Usually this calculation is performed considered in a certain period of time, and commonly this is five year period in our calculation, for example, what we use as the, the window timeframe, which is from 2020 to 2025.

And we forecast the market using historical and current data to see what are our predictions for this market up to 2025. So what are our predictions in the end? So what are we forecasting? What we see of this market is that is growing steadily rather than exponential. This is because of the certain maturity that this market already reach, because of course it is in the, in the market sign so long. And the component annual growth rate that we estimate for this segment is approximately 15.1% yearly. And at the moment, the, the growth that we see for this market is by 3 billion US dollars.

So it means that from 2020, that is the initial stage of our analysis to 2025, this market would grow by 3 billion. Now, it is important also to understand who are the leaders of the market and where they located, because it also show us where the opportunities are. We can see that North America and EMEA are very close in terms of numbers if we refer to the coverage of the services of this market segment. And it is easy to think about these two markets or these two areas as leaders because, well, first of all, they're a strong economy in in both of them.

And secondly, because main companies have their headquarters in this locations following North America and emea, we have bug with 18.1% of the, of the market. And there are some opportunities as well that are arising in this, in this area and including Middle East and well in the, in the last, yeah, in the last step, let's say of of our stairs, we have the Latin America with 4.2% coverage for this market segment. We will discuss a little bit now about the revenue split. So how are the services or the product of this market split in, in, in terms of the revenue globally, the market sizing?

Well, so in this table we can see the percentage of each of these products in the total revenue. Now, the most common revenue model is subscriptions. And it actually makes sense because let's say the, the, the, this, the common deployment model is identity as a service and this is usually subscription based. So then it is expected that we will have more subscriptions rather than other services. At the time that we are seeing the subscriptions going up, we will see the software license going down as well along the time.

There is, I would say a strong figure for maintenance, okay, in the services, which is 18.8% and we have small portion that correspond to other services according to the vendors. Now let's see what happens in terms of organizations, right? So because we have different kind of organizations and they have different number of customers beginning from small companies, what we see is that this segment of core, due to the nature of of of the size of the company, the revenue is limited. So these organizations deal with less complex environments.

Then if we analyze medium companies, well this segment actually see an increase, let's say in in need for solutions especially because of the increasing cyber risk that are nowadays. And there is a need for unified software as a service access. Now mid-market is the leader. If we talk about, you know, the, the rate of customers by market segment, even though it represents 42% of, of the total revenue, you know, in the split, this market is still not fully served.

Now there are of course seven customers in this market segment and we see as well the large companies, the enterprises with the big need of modernization, need of new solutions to actually deal in hybrid environment and including software as a service support. So then these two segments, the middle market and the large companies are actually leading. If we talk about the distribution or the split of the revenue by company size. So what are the key figures that we see at the glance? So what are the, the main numbers that could actually tell us what is happening in the market?

Well, firstly we can say that the access management market is currently 3.6 billion US dollars. Now the subscriptions are the, the most common model in terms of the revenue and either reach to 55% of the total revenue. And this is the most common license model in terms of the annual growth rate, it is estimated in 15.1%. This is a high number, still not exponential, but it is a high and a very strong number. And this is due to emerging requirements in terms of working from anywhere after the COVID 19 outbreak, we saw a change in terms of how the companies are dealing with this.

And we have companies that have employees working not only from home in the same country, but as well from abroad. So then there are also other use cases that are impacting in this, in this metric. North America and Miam cover most of the market. They are the, the most relevant contributors and they cover 77.7% of global access management market following EMEA and North America. We have a pack and some Latin America. And finally we see that the estimation for the access management market will reach to 6.1 billion US by 2025 after seeing some figures.

Something that they always say is it is important to understand what the numbers want to tell us to read what is happening in the market. So then we can see as well that there are some factors that are impacting these metrics. For example, dominant vendors. So there are some vendors that are primarily dominating the market. For example, Okta and Microsoft as well as very well established vendors that due to the level of maturity of the market, they're actually impacting in terms of the, of the revenue of the income.

For example, Broadcom, I B M Rs A, the vendors are also co you know, constantly expanding capabilities of access management solutions. And this is due to the changes that the market is, is actually claiming for, for example, supporting APIs for authorization call to the system. And this is showing or on bailing, let's say grow potential is still in a market that is already mature enough, let's say. There are also different needs from mid-market and enterprises, especially as we mentioned earlier, with this need of dealing with complex environment, hybrid environment.

And as small and medium companies, they have a tendency of working in less complex environment. And the other opportunities arising EMEA and North America, they lead the market. But there are new opportunities in APAC and Middle East and something else that we observed is that contrary to other market segments, the access management presents relatively low revenue in terms of professional services by vendors. Now something that is interesting and it is important to know is always being transparent and explain what is the methodology, what do we do to actually come up with these figures?

How do we reach to these numbers? Well, here at Kuppinger Coal we always try to deliver the best quality as possible in terms of our research and the MARKETIZING is part of it. So what we do is using information that we gather from the vendors directly and we include this data in our leadership compass. We have several leadership compass that you can see in our website as well as market sizing reports that we post every week and the year available in our press release.

Now there is a variety of sources that we use to validate the data as well and to enrich our calculations, we start collecting data from vendors as part of our leadership compass. This is a questionnaire that we offer to the vendors and we collect data from them. We verify the data through public statements, for example, public financial information available. So we verified that the data that we are using is up to date and is correct, we actually have enough time in the market.

So then we contact with historical data as well and we observe what is happening in terms of the current economic scenario. And with this information we are able to create the best metrics, the best calculations on forecasting as well. We consider external factors that could affect, for example, let's say unforeseen events, new vendors entering into the market, commodization of the markets, you know, so there are different factors that could affect.

And finally this word to know that knowing the market and having understanding of particular segments as we do about access management will also help us to a spot if there is any anomaly to understand what are the trends, to have expectations, you know, in terms of, okay, so what is happening in the market and if the results that we have are logical or not, you know, and also we understand what is happening with the vendors that are in the market. I hope the presentation was insightful for you and if you have any questions, I am glad to answer them.