Welcome to the KuppingerCole Analyst Chat. I'm your host. My name is Matthias Reinwarth, I'm the director of the Practice Identity and Access Management here at KuppingerCole Analysts. This is another episode of the Trends and Predictions sub-series that we do. And today my guest is Marina Iantorno, she is a Research Analyst with KuppingerCole Analysts. Hi, Marina.
Good to have you back.
Hi, Matthias. I'm glad to be here as well. Thank you for having me.
So this is a great episode because we are moving closer to actual data and that is something. All the other trends and predictions, of course, are based on our market experience, on our research, on the work we do. But as you are a research analyst, you are looking at facts and figures. So we are looking at the market of identity and access management today. So when you do your evaluation, when you look at numbers and figures, how do you look at the market? Is this a whole market, does KuppingerCole analyze IAM as a whole, or do you do some segmentation here?
Well, we analyze the entire identity access management market, but also we provide breakdowns and we see a variety of subsegments within it. For example, CIAM, Access Management, passwordless authentication, just to mention a few of them. This provides our clients the details that they need and the guidance on a specific segment within the broader IAM market.
Okay. So as we are talking about trends and predictions for 2023 and beyond, while we are running up towards EIC in May in Berlin, what are trends that you can identify and that are backed by numbers that you can mention between these subsegments?
Well, some of the segments that have reached a certain level of maturity on the market and some of them are emerging with potential to grow significantly in the coming years. When we look at our estimations of keeping your call up to 2025, for example, for CIAM, Access Management, passwordless authentication, as well as for almost all the subsegments within the Identity Access management market and even in the overall Identity Access management market, we can see a clear trend. All these segments are growing significantly, some of them within the stable rate and some of them significantly more.
Okay. But how do you get to these figures? How do you analyze the current situation and how can you come up with such an estimation for 2025? As I said, usually predictions are difficult, especially when they concern the future. So how do you look into the future?
Well, the first thing that we do is gathering data from a variety of sources, let's say financial statements of public companies. And we have other sources as well that we check. And based on that, we analyze the market sizing. We estimate the growth. For instance, I our indicator is the compound annual growth rate. This is an average growth about several years. And we predict this compound annual growth rate for the segment. And we estimate their revenue for the coming years. Now, if we compare the subsegments, we can see that the component growth rate is moving to, let's say, between 10% to 21% in some markets. Just to give you an example, if we consider CIAM, it is 13.2% the compound annual growth rate and if we check identity fabrics, the compound annual growth rate is 21.2%. So it means that these two markets are growing, but CIAM uses use cases that are addressing to other technologies, for example, access management , or in the future, decentralized entity. But identity fabrics are a concept that is widely adopted nowadays. So then it is common to see a greater growth. Our idea here, when we calculate the compound annual growth rate and when we see the estimation for the revenue in the coming years, we focus on the software revenue and we don't do the focus on the professional services. So the idea is that we get the incomes from new sales.
Okay. When you say when you say revenue, what is included, how do you analyze that and how do you delineate that from other income?
Well, we look at the software license, subscriptions and maintenance fee. So this is the main point of our calculation. Now, these help us to make a clear comparison between the segments and we can understand the changes and the preferences. For instance, it is not surprising that a market like IGA and identity fabric subscriptions go up while the license go down, because the most common deployment model for all type of identity access management solutions nowadays is identity as a service, which is by definition, subscriptions based.
Okay. I got the point. We are acting internationally, so I assume you're looking at the market also globally and you are looking at different segments of the market. So how does IAM change between different countries? I assume it's not the same in the US as it is in EU or as it is in Asia-Pacific?
No, of course not. We analyze these per regions. If we talk about identity access management in overall the two largest regions are North America and EMEA. They tend more or less to be at the same level, and there is a portion of the global revenue that is coming from Asia and Pacific and Latin America. Now, in general, as I said, North America and EMEA are usually in a very, very similar rate, if we compare, you know, within the region. Now, it could vary slightly from market to market. If we check, you know, the different segments, we can see slight differences. And of course it will depend on the adoption of trends or regulations that are more impactful in certain regions, right? So this is something that we also need to consider. In the detailed analysis that we deliver to our customers, we also provide a more granular split. For instance, let's say every region will have sub-regions like [German], where we have Germany, Austria and Switzerland.
Okay. So when you're drilling down into these segments, this sub-series is called Trends and Predictions. Are there actual trends that you can identify where you would say, yeah, this is a trend. Which are the trends in the IAM market that you would mention?
Well, there are many solutions in the IAM market that include the adoption of multi-factor authentication, for example. There is an increase of artificial intelligence and machine learning and it provides also a real time analytics of anomalies, you know, it is easier to actually spot something if there is something that is making noise. And our difference from others is that our detailed analysis of the subsegments of this broad market, that is identity access management, help us to have a deep understanding, let's say, and help us to verify and predict the trends. For instance, in the European Identity and Cloud Conference that is coming in middle May in Berlin, but is also fully hybrid, we have various tracks where we will talk or we will discuss topics and trends. For example, a maturity level on identity fabrics or challenges of adopting passwordless authentication. As every year there will be plenty of super interesting sessions at our conference. So it that is a good place to attend, I would say.
Yeah, I would say so as well and I'm looking forward to meeting you there and meeting our audience there, of course. Now that we've drilled into the different segments, into different topics, and also different regions, if we take the market as a whole, how would the IAM market in overall change? How do you expect it to evolve in the near future?
Well, this is a market that has a great scope to grow. Our estimation is that in 2022, the IAM market has been 21.96 billion USD. So then what it means, it means that this was the whole revenue, let's say the global revenue that we calculated or estimated for these market. Now by 2025 we expect the deal will reach to $35.6 billion. So this results in a compound annual growth rate of 16.8%, which is a clear indicator of the growth in the segment.
Great. And this is really a staggering figure, actually. So interesting to hear that. So this is not a niche market. This is really a huge market.
- I would say so, yes.
- As usual, I would really like to get the audience’s feedback. So if you have any questions, comments, feedback for Marina, for figures for maybe also for evaluations that they would like to see, please leave a comment or a question in the comments section, or just reach out to Marina and/or me via email and let us know what your thoughts are. So we really would like to get into discussion what are the questions that you are really interested in. So leave the comments there. Before we close down, Marina, is there anything that you would like to highlight around this topic or in general?
Well, I would like to invite our audience to attend the EIC in May this year. The conference is a great place to be up to date. We will listen to industry experts and analysts, and this year we will have more than 250 speakers, which is something very, very good, I would say, and we are looking forward to welcoming and meeting you there.
Absolutely. Not only 250 speakers, but 250 great experts and industry expert experts, people who are doing that, practitioners, academia, but also from groups of people working together to improve IAM as a whole. So really looking forward to seeing you there, Marina. Looking forward to seeing the audience there. And I'm looking forward to being in Berlin again. So thank you very much, Marina, for your time, for your insight, for sharing these interesting figures. For those who just listen to the audio version, maybe it's interesting to watch this on YouTube again, because the presentation that Marina provided that we did not talk about, but we did talk about implicitly, is really interesting. And there are lots of interesting insights to gain from that. So thanks again, Marina, and looking forward to having you in another episode very soon and to seeing you in Berlin.
Thank you, Matthias. Thanks a lot.
Thank you. Bye bye.