Identity and access management investment is skyrocketing – here's why

Spending on identity and access management (IAM) services is expected to surge 55%, according to a new study from Juniper Research, with agentic AI adoption spurring huge investment.

The analyst firm estimates that spending on IAM services will climb from $26.2 billion this year to $40.5bn globally by 2031. Juniper also noted that a quarter of businesses will deploy IAM by 2031, climbing from 67.6 million this year to 88m in 2031.

Researchers pinned the leap in spending on the rise of AI, noting the positive and negative impacts on the IAM market. On one hand, authentication is shifting away from one-time logins to continuous and adaptive monitoring, making processes easier and more effective.

On the other hand, however, AI agents are exacerbating security risks that IAM systems need to address. Juniper said this growth reflects how IAM is evolving in the face of AI threats.

"As non-human identities, such as AI agents, quickly outnumber human employees, businesses must introduce robust controls to protect their systems and processes from unintended access and actions," the report notes. "As such, IAM solutions are increasingly vital to managing cybersecurity risk."

Juniper's predictions follow research from Sophos earlier this year that suggested seven-in-ten companies saw at least one identity-related breach in 2025, a sharp leap in incidents that has been exacerbated by AI.

"The non-human identity problem is particularly urgent," Sophos CISO Ross McKerchar said at the time. "AI agents are being granted privileges faster than security teams can track them, and organizations that fail to get ahead of this will find it an increasingly costly gap to close."

Smaller businesses, bigger risks

The risks associated with agentic AI are particularly higher for smaller businesses, according to Juniper. These organisations are likely to use dedicated IAM tools, unlike their larger counterparts that have established, robust guardrails around AI agents.

Juniper noted that small businesses must do more to protect their systems, but added that the IAM industry needs to create simpler products to appeal to this market, too.

"Small businesses must change the way they manage access to systems, or they will encounter significantly elevated risks as AI agents become increasingly widespread," said VP of Research Nick Maynard.

"IAM vendors must create small business-friendly versions of their systems that are usable without specialised expertise. Pursuing modular and scalable IAM system design will position vendors attractively, in a market set to see rising small business adoption."

Regardless of business size, IAM systems will need to feature automated monitoring and lifecycle controls in order to keep constant watch for any identity or access breaches, with some of these issues introduced by AI or exacerbated by its use.

"This approach will enable IAM systems to catch issues as they occur, such as excessive privileges, dormant accounts, and policy drifts," the Juniper report notes. "This is increasingly important, as AI agents and other autonomous identities may act continuously, change behaviour, or retain credentials long after their original purpose has ended."

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