Japan Identity-as-a-Service (IDaaS) Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2025-2034)

The Japan identity-as-a-service (IDaaS) market reached around USD 124.36 Million in 2024. The market is projected to grow at a CAGR of 18.70% between 2025 and 2034 to reach nearly USD 690.54 Million by 2034.

Japan Identity-as-a-Service (IDaaS) Market Growth

In August 2022, Japan's Ministry of Economy, Trade and Industry (METI) published its annual eCommerce Market Survey, revealing that Business-to-Consumer (B2C) eCommerce sales of goods experienced an 8.6% increase in 2021 compared to the prior year, bringing the total B2C eCommerce market to an estimated USD $188.1 billion. The survey also indicated that Japanese consumers participated in cross-border online shopping from U.S. retailers, amounting to USD 3.1 billion in 2021, which marks a 9.3% rise from the previous year. Furthermore, Japan's Business-to-Business (B2B) eCommerce market is projected to reach $3 trillion, encompassing all commercial transactions across various sectors within the country.

The growth of the e-commerce sector in Japan is significantly fuelling the demand for Identity-as-a-Service (IDaaS) solutions. As online transactions increase, businesses necessitate secure and efficient identity management systems to safeguard customer information and enable smooth authentication processes. IDaaS platforms provide scalable solutions that improve user experience while ensuring adherence to data protection laws.

In 2023, Japan ranked sixteenth among countries targeted by ransomware groups, experiencing 45 incidents carried out by 14 different groups. The manufacturing sector was the most frequently attacked, accounting for 31% of incidents, followed by the technology sector at 19% and the services sector at 10%. The increasing frequency of cyberattacks is driving a significant rise in the demand for Identity-as-a-Service (IDaaS) solutions. As organisations confront escalating security threats, they are in search of comprehensive identity management systems to safeguard sensitive information and ensure secure access. IDaaS offers features such as multi-factor authentication, real-time monitoring, and automated threat detection, rendering it an essential tool for risk mitigation. This heightened awareness of cybersecurity vulnerabilities compels businesses to prioritise IDaaS as a fundamental element of their security strategies.

Key Trends and Developments

Growing cybersecurity concerns, strict regulatory compliances, rapid digital transformation, and rising remote work culture are the major trends impacting the Japan identity-as-a-service (IDaaS) market expansion

December 2023

RSA, a leader in security-focused identity solutions, declared strategic investments aimed at assisting both public and private organisations in Japan to address emerging cybersecurity threats and comply with the guidelines outlined in the General Policy for the Protection of Critical Infrastructure.

March 2024

Japan introduced a new design for its digital ID card that does not include gender identifiers. The country has now joined the growing list of nations that have removed gender markers from their national identification cards. The updated My Number ID cards are set to be launched in 2026.

August 2024

Japan is in the process of testing my number card application to enhance identity verification measures due to rising fraud cases. In reaction to the misuse of counterfeit My Number cards for identity verification, the country's Digital Ministry is promoting the utilisation of the card's IC chip to ensure more rigorous identity checks.

Growing Cybersecurity Concerns

The increasing frequency and sophistication of cyberattacks in recent years have created a pressing need for organisations to bolster their security frameworks. As businesses and institutions become more reliant on digital platforms and cloud-based services, the vulnerabilities associated with inadequate identity management have become more pronounced.

Strict Regulatory Compliance

The importance of strengthened regulations related to data protection and privacy has escalated in the current digital environment, characterised by an exponential increase in the amount of personal data that organisations collect, process, and store. In this context, Identity as a Service (IDaaS) plays a vital role in ensuring safety against threats.

Rapid Digital Transformation

As organisations in Japan increasingly embrace digital transformation, they are recognising the critical importance of implementing effective identity management systems. These systems play a vital role in ensuring seamless user experiences across a multitude of platforms, which is essential in today’s fast-paced digital landscape.

Rising Remote Work Culture

The growth of remote work has significantly transformed the landscape of how organisations operate, leading to an increased reliance on digital tools and platforms. As more employees work from various locations, often outside the traditional office environment, the need for secure and efficient identity management solutions has become paramount.

Expansion of the E-Commerce Sector

The rapid expansion of e-commerce and online services in Japan has created a pressing demand for advanced identity management solutions. As more consumers turn to digital platforms for shopping, banking, and various services, the volume of sensitive customer information being processed online has surged.

Japan Identity-as-a-Service (IDaaS) Market Trends

Companies in Japan are placing a high emphasis on privacy and compliance within their identity management systems. This focus is propelling the uptake of IDaaS platforms, which offer comprehensive security features and assist organisations in adhering to regulatory standards while safeguarding user data. Additionally, the incorporation of biometric authentication into IDaaS solutions is increasingly popular in Japan. As consumers demand more secure and user-friendly authentication options, organisations are implementing biometric technologies such as facial recognition and fingerprint scanning, thereby improving security and user experience while diminishing dependence on conventional passwords.

Japan Identity-as-a-Service (IDaaS) Industry Segmentation

The report titled “Japan Identity-as-a-Service (IDaaS) Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Breakup by Component

• Single Sign-on
• Multi Factor Authentication
• Provisioning
• Password Management
• Directory Services
• Audit, Compliance and Governance

Breakup by Deployment Type

• Public Cloud
• Private Cloud
• Hybrid Cloud

Breakup by Industry Vertical

• BFSI
• Telecom and IT
• Government
• Healthcare
• Energy and Utilities
• Manufacturing
• Others

Japan Identity-as-a-Service (IDaaS) Market Share

Based on the deployment type, the market is segmented into public, private, and hybrid.Hybrid IDaaS is projected to grow at a CAGR of 20.4% during the forecast period of 2025-2034 as it offers benefits such as improved security and enhanced user productivity.

Leading Companies in the Japan Identity-as-a-Service (IDaaS) Market

Major players are focusing on technological advancements to gain a competitive edge in the market.

NEC Corp.

NEC Corporation, established in 1899, is a Japanese multinational company specialising in information technology and electronics. Its headquarters are located in the NEC Supertower in Minato, Tokyo, Japan. NEC stands at the forefront of integrating IT and network technologies, boasting over a century of experience in technological innovation.

Thales S.A.

Thales S.A., established in 2000, is based in France. This French multinational corporation specialises in the design, development, and manufacturing of electrical systems, along with devices and equipment tailored for the aerospace, defence, transportation, and security industries.

Oracle Corporation

Oracle Corporation, founded in 1977, is a leading American multinational technology company headquartered in Austin, Texas. It is recognised as the largest database management firm in the world, with reported sales reaching US$100 million.

Microsoft Corp.

Microsoft Corporation, established in 1975, is headquartered in Washington, United States. This American multinational corporation operates as a technology firm, focusing on the creation and promotion of software, services, and hardware products that offer innovative solutions and improved convenience.

Other major players in the market are Broadcom Inc., Fujitsu Ltd., Authlete Inc., Digital Arts Inc., Atos SE, and Okta Inc., among others.