What is IDaaS and What is it Used For?

Implementing your own identity management system requires a major investment – both in time and cost. But, it's something you can’t overlook or afford to get wrong — a single flaw in your system could lead to costly data breaches and erode customer trust.

That’s why most SaaS developers opt for an identity-as-a-service (IDaaS) solution.

With IDaaS, you can outsource user identity and access management to experts whose sole focus is delivering secure identity systems for apps like yours.

In this article, we’ll cover everything you need to know about IDaaS: What it is, how it works and how it compares to using an identity provider.

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

An Identity-as-a-Service or IDaaS platform, is a cloud-based service that handles user authentication and access management on your app’s behalf. It typically covers a range of functionalities such as Single Sign-On (SSO), Multi-Factor Authentication (MFA), directory services, and user provisioning and deprovisioning, all hosted and managed by a third-party provider, like WorkOS or Frontegg. An IDaaS provides these services to your app through an API, SDK, or even a simple dashboard.

Historically, you’d have to custom-build and maintain an identity management system in-house. This was not only expensive but required a lot of engineering resources. By using an IDaaS provider, you benefit from the expertise and resources of specialized providers who can offer a higher level of security and compliance capabilities.

How IDaaS works

An IDaaS provider handles all the components required for authentication and access management in the cloud. This includes managing user profiles, passwords, multi-factor authentication methods, roles, permissions, and more.

When a user signs into an app, the IDaaS system verifies their identity by checking their credentials against a directory. These directories may also contain policies and rules that determine what resources the user can access and what actions they can perform. These rules are based on factors like the user's job, department, or specific access needs. If the credentials match and the user is authorized to access the app, the IDaaS issues the user a token to present to the app with their (the user’s)  information.Based on this data, the app grants or denies the user access.

To communicate with apps, IDaaS systems use standard protocols such as SAML (Security Assertion Markup Language), OAuth, and OpenID Connect. These protocols allow for the secure exchange of identity data.

Alongside authenticating or authorizing users, IDaaS providers record user activity and provide audit logs showing who accessed what, and at what time.

Common use cases for IDaaS

IDaaS has become popular for handling user identity management in many web and mobile apps. Below are some of the ways you can use IDaaS in your SaaS:

Customer registration and login

The most obvious use case is enabling your users to sign up, log in, and access your app. An IDaaS eliminates the need to build your own user database and authentication system. Your users can sign in with their preferred methods like email/password, social login, multi-factor authentication, and passkeys, among others, and the IDaaS will handle the entire authentication process.

Secure API access

If you have an API that needs to be accessed securely, an IDaaS can issue access tokens to authorize your API requests. When a user logs in, their IDaaS access token is sent with API calls to verify their identity. You don't have to build your own API authorization logic.

Single Sign-On

Organizations use IDaaS solutions to enable single sign-on (SSO) across the multiple apps they use, so users only have to log in once to access them all. The IDaaS securely shares user credentials and access across the applications.

Additionally, if you’re building multiple apps, you can use an IDaaS to centralize authentication and allow users to access them all from a single place.

Why use an IDaaS?

Below are some of the reasons you should use IDaaS:

Fast and easy to implement

With an IDaaS, you can be up and running in minutes instead of months. You don’t have to worry about creating, installing or maintaining any identity software. The IDaaS provider handles it all for you. All you have to do is select a provider, spend a few hours plugging their API into your app and you're ready to get started

Scalability

IDaaS solutions are built to scale with your business. Whether you have 100 users or 100,000, it’s the IDaaS provider’s job to worry about how their service will adjust to your needs. When it comes to pricing, this model allows you to pay for only what you need — and as your business grows you can simply adjust your plan to add more users or features as needed.

Enhanced security

Reputable IDaaS providers invest heavily in security and are staffed with experts who stay on top of identity standards and compliance regulations necessary to protect your user’s data. They are also able to take advantage of economies of scale to implement sophisticated security controls that may be too expensive for you as an individual company to deploy on your own.

Some IDaaS solutions also provide advanced security features like adaptive authentication (authentication that adjusts based on the user's behavior, context, and risk level) and identity analytics.

Reduced Costs

Outsourcing identity management is often cheaper than building and maintaining your own solution which requires a major investment of time, money, and — most importantly — engineering resources. IDaaS eliminates all of these costs. There are no software licenses to purchase or maintain and no need to hire identity experts. You can easily get started with just a few dollars per user.

IDaaS vs IdP

It’s easy to confuse IDaaS with Identity Providers (IdPs) because some of the services that IDaaS solutions provide overlap with those an IdP offers.

An IdP stores, maintains and manages identity information (such as users, services, or systems). They provide authentication services to connected applications, supporting functionalities like single sign-on (SSO) and automatic user provisioning.

IDaaS, however, offers a comprehensive suite of IAM services that extend beyond authentication and authorization to include user management, security policy enforcement, audit logs, and compliance management.

Essentially, an IdP’s functionality is a subset of what IDaaS offers. However, IdPs have features that IDaaS, like in-depth integrations with enterprise software suites, advanced provisioning capabilities, and a deeper focus on the user experience.

Another major differentiator is that IdPs can be deployed on-premises or hosted in the cloud while IDaaS solutions are inherently cloud-based.

Implementing an IdP also typically requires significant time and resources to set up and configure.

IDaaS solutions are designed to get you up and running quickly. The provider has already built the infrastructure, functionality, and solved hosting for you, so it’s easy to integrate it into your app.

FAQs about IDaaS

What exactly is IDaaS?

IDaaS (Identity-as-a-Service) is a cloud-based service that handles identity and access management on behalf of an application.

How does IDaaS work?

IDaaS providers offer login widgets, APIs, and SDKs that you integrate into your app. Once integrated, you can use the IDaaS to implement IAM functionality in your app like signing in users through various authentication methods like email/password, social logins, and MFA, managing user identities, adding access control, and tracking user activity from the IDaaS dashboard.

Who is IDaaS for?

IDaaS is great for startups and small teams building web or mobile apps. Rather than spending time developing your own authentication system, you can get up and running quickly with an IdaaS solution.

It’s also useful if you want advanced security features like adaptive authentication that would be difficult to build yourself.

What are the main benefits of IDaaS?

The biggest benefits of IDaaS are convenience, security, and scalability. You get a robust, enterprise-level login system without having to build and maintain it yourself.

IDaaS providers also handle things like password encryption, brute force protection, and compliance with security regulations like HIPAA or GDPR. And as your user base grows, IDaaS systems are designed to scale with you.

What are some downsides or considerations with IDaaS?

There are a few downsides to keep in mind. You are dependent on the IDaaS vendor, so if their service goes down, your app’s identity system also goes down. You also have less control over the login experience and user data.

And while IDaaS is cost-effective, most providers charge per login or on a subscription basis for larger volumes. You'll need to weigh the costs versus the benefits especially if you’re growing quickly and onboarding more users.

Conclusion

One of the main advantages of using an IDaaS solution is you don’t have to stretch your team too thin to integrate with your customer’s identity providers. This comes in handy when you need to support a feature like SSO authentication, where supporting multiple providers can be a pain, what with the different protocol implementations and the varying requirements from providers.

With a done-for-you authentication service, like WorkOS, you can use a single API-based integration and add SSO support to your app for all the major identity providers including Okta, Auth0, OneLogin, and Microsoft Entra.

• Get started fast: With SDKs for every popular platform, and Slack-based support, you can implement SSO in minutes rather than weeks.
• Avoid the back-and-forth: WorkOS’ Admin Portal takes the pain out of onboarding your customers’ IT teams and configuring your app to work with their identity provider.
• Pricing that makes sense: Unlike competitors who price by monthly active users, WorkOS charges a flat rate for each company you onboard — whether they bring 10 or 10,000 users to your app.

Explore unified SSO.