P a s s l o g i x A L e a d e r i n S i n g l e S i g n - O n T e c h n o l o g y Y e s t e r d a y, T o d a y, a n d T o m o r r o w

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1 V E N D O R P R O F I L E P a s s l o g i x A L e a d e r i n S i n g l e S i g n - O n T e c h n o l o g y Y e s t e r d a y, T o d a y, a n d T o m o r r o w Sally Hudson I D C O P I N I O N Global Headquarters: 5 Speen Street Framingham, MA USA P F Security issues today are complicated by both internal and external threats, coupled with an ever-growing list of mandated compliance requirements. These issues have converged to create an even tighter focus on access security and identity management within enterprise IT organizations. IDC believes access management software solutions must meet the following criteria to achieve short-list status within an organization. Based on the answers to the following questions, CIOs, CSOs, and business managers can determine which solutions are best suited to meet their needs in highly distributed, ever-changing IT and business scenarios: Does it improve security? Does it reduce risk? Does it contribute to streamlining operations? Does it integrate easily with existing identity and access management (IAM) products and thus contribute to align information security with business goals? I N T H I S V E N D O R P R O F I L E This IDC Vendor Profile looks at Passlogix, a privately held company based in New York City and a perennial market leader in the enterprise single sign-on (ESSO) market. In addition to utilizing IDC's internal demand- and supply-side research for this document, we also spoke with Marc Boroditsky, president, CEO, and cofounder of Passlogix. Boroditsky also serves on the company's board of directors. He oversees the company's overall operations, direction, and strategy. He was a finalist for the Ernst & Young Entrepreneur Of The Year 2009 Award in the Metro New York region. The awards program recognizes entrepreneurs who demonstrate extraordinary success in the areas of innovation, financial performance, and personal commitment to their businesses and communities. Filing Information: October 2009, IDC #220341, Volume: 1, Tab: Vendors Security Products: Vendor Profile

2 S I T U A T I O N O V E R V I E W I n t r o d u c t i o n / B a c k g r o u n d ESSO is a technology that offers users the convenience of having to enter in a password once and have their credentials automatically entered into each of the underlying resources. ESSO enables users to log in to internal applications, databases, and other corporate systems with just one identity. These SSO solutions enforce password policies and eliminate the need for employees to remember multiple passwords. Identity and Access Management Market Continues to Grow The worldwide IAM market is forecast to grow from $3.4 billion in 2008 to $4.8 billion in 2013, representing a 7.3% compound annual growth rate (CAGR). ESSO is part of the larger IAM market. Subcategories of the IAM market include Web single sign-on (WSSO) and federated single sign-on (FSSO); host/enterprise SSO; user provisioning, including granular authorization and policy rights; risk and entitlement management; advanced authentication software (e.g., PKI); and legacy authorization, such as Resource Access Control Facility (RACF) and ACF2. Software licensing and authentication tokens (SLATs) are now classified as a separate subcategory within IAM. These are parallel/serial port tokens or USB keys that authorize the use of software on a particular device. IAM also includes personal portable security devices (PPSDs), such as traditional hardware tokens and USB devices, as well as security smart cards for network access. C o m p a n y O v e r v i e w Passlogix is headquartered in New York City, with offices throughout the United States, Europe, and Asia. To date, the company has sold 15.5 million licenses, and deployments range from hundreds of seats to more than 200,000 users. More than 1,500 customers use Passlogix v-go solutions, which operate with thousands of applications worldwide. Industries served include financial services, manufacturing, retail, healthcare, telecom, and petrochemicals, as well as government on the national, state, and local levels. Founded in 1996, Passlogix delivered one of the market's first enterprise single signon solutions in Today, the company's v-go Access Accelerator Suite has been expanded to go beyond SSO in order to eliminate critical pain points throughout the sign-on, authentication, and provisioning processes inherent in IT enterprise IAM. The product suite is designed to allow business to operate in an increasingly more secure and efficient fashion. The suite is made up of an integrated set of single sign-on, authentication, and provisioning tools that include the widely deployed v-go Enterprise Single Sign-On solution. Passlogix's patented v-go technology accomplishes this for the enterprise by shortening implementation and payback cycles by adapting to any existing infrastructure without the need for custom coding or replacing legacy hardware or software. Today, many global organizations rely on the v-go suite to improve 2 # IDC

3 operational efficiency, strengthen security and compliance posture, and dramatically reduce the time required to deploy IDM systems. Financial Performance By year-end 2008, Passlogix attained a cumulative software license count in excess of 15 million. According to Boroditsky, CEO and founder of Passlogix, the pace this year is on track to exceed the license sales of previous years. While the global economy has presented challenges, Passlogix has seen its sales increase from last year. Boroditsky notes that selling into the current economic environment requires more effort but feels that Passlogix's track record with customers, category, and capabilities is strong, giving the company a solid base for a successful year. Customers and Contracts Passlogix operates via both OEM and direct sales models. The company recently closed its single-largest customer this year, a large vendor in the retail space. So far, its retail market success has been surprisingly strong over the past months as the company nears 1 million retail users. At present, global financial services is still the largest sector for Passlogix, followed by North American healthcare, and then U.S. and foreign government sales including federal/national, state/province, and municipal local deals. Utilities are a strong market in this area worldwide, encompassing energy, water, and national grids. In Europe, Asia, and Australia, the company sees deployments occurring across entire government organizations, such as the European Union. Passlogix has done well in Singapore and Asia and has a strong presence in Australia as well. One of the most recent customers/partners is the Germany-based IT consulting firm FirstAttribute GmBH, which has expanded its portfolio of identity management solutions with the Passlogix v-go Access Accelerator Suite. FirstAttribute specializes in user life-cycle identity management solutions, migration projects, and related consulting for clients including Global 500 companies. According to published statements by the San Francisco based Bank of the West, the deployment of Passlogix Single Sign-On has saved nearly $100,000 per year in help desk and branch service desk support costs, cut password-reset calls in half, trimmed help desk staff, and reduced employee time wasted on password issues. ESSO technology has also reduced the bank's audit risk by enforcing strong password policies on applications without built-in support for these password controls. Bank of the West has 15,000 users in 800 branch banking and back-office locations in 19 states. The average user has seven application or account passwords that had to be managed, manually input every day, and reset when forgotten before the bank automated those processes with Passlogix technology. C o m p a n y S t r a t e g y Product Strategy The overall strategy is to sell the v-go ESSO suite, and Passlogix has also seen an uptake in sales specifically around password-reset technology and privileged password management (PPM). There is increased interest in strong authentication as 2009 IDC #

4 well. The company's Internet kiosk, and SSO for remote devices, has served to open up expanded market opportunity within the distributed user base. Product Offerings E S S O With v-go Single Sign-On, users gain quick, secure application access required to do their jobs effectively. Employees authenticate once, and v-go Single Sign-On does the rest. The v-go On Demand Edition extends the benefits of SSO for remote and mobile enterprise access by providing users with secure access to applications from any computer regardless of the location. The On Demand Edition also provides easy and secure access to applications for supply chain partners, outsourcing partners, and other affiliates within the extended enterprise, as well as outside of the network. The v-go Session Manager is designed to make it easy for multiple kiosk users to quickly and securely access applications while reducing the security threat caused by users walking away from logged-on applications. P r o v i s i o n i n g The v-go Shared Accounts Manager (SAM) enables shared credentials to be securely stored, retrieved, and used by authorized users, including privileged accounts by system administrators and shared IDs by temporary workers. The product's SSO Account Reconciliation feature speeds the deployment of IDM systems by automatically reconciling user IDs to their rightful owners, and the v-go Provisioning Manager enables system administrators to directly distribute user credentials to an ESSO solution, without end-user intervention. This can dramatically speed adoption of this technology while significantly improving security. A u t h e n t i c a t i o n v-go Authentication Manager is designed to accelerate the deployment of strong authentication by eliminating the long and costly customization projects typically required for adding strong authentication to applications. Stronger authentication techniques are demanded by many industry regulations, and failure to comply with this can result in severe financial penalties. The v-go Self-Service Password Reset provides users with a fast, secure way to regain access to their computer by automating Windows password reset. This saves organizations time and money in help desk costs while improving user satisfaction. Password-reset costs have been estimated at ranges from $15 to $50 and more per call throughout the IT industry. Business Strategy Partnerships Passlogix has partnered with many solution providers, which generate demand, sell, support, deploy, and build services around Passlogix solutions. There are 200 valueadded resellers of Passlogix technology, but no single partner is more than 10% of overall business, according to Boroditsky. Much of Passlogix's growth is driven by regional and national VARs. 4 # IDC

5 Passlogix also has relationships with technology partners, which build, comarket, and resell their own products with Passlogix technology. Passlogix's major OEM partner is Oracle Corp., which resells the ESSO technology into enterprise accounts worldwide as part of its overall IAM technology suite. Oracle is among the top 5 IAM suite vendors in license and maintenance revenue worldwide and continues to expand its IAM technology base through both internal development and major acquisitions. Passlogix also recently announced the addition of CA Inc.'s CA Identity Manager to the list of provisioning systems integrated with its v-go Access Accelerator Suite. This integration enables system administrators using the CA identity management system to distribute user credentials directly to v-go Single Sign-On, completely eliminating end-user involvement with passwords and the associated overhead and security risks. CA is a long-term market leader in total IAM suite license and maintenance revenue. Finally, Passlogix was also recently named Microsoft's UK Emerging Identity Partner of the Year for its ability to equip enterprises with a complete identity and access management package, integrating Microsoft's IAM products with Passlogix's own v- GO Access Accelerator Suite. The combined solution has been utilized in six projects in the United Kingdom to date, providing a comprehensive strategy for management of digital identities. Best Practices Passlogix attributes much of the company's success directly to existing customer success. In today's climate, customers are very concerned about making a mistake and require reassurance of ultimate success in their projects. Passlogix can provide examples of real-world customer experiences that map into current customer needs and can point to deployments that have long-term success. The products do not require a high level of support and related costs. One of the company's strengths is the ability to provide immediate and professional technical support from highly trained and capable professionals, which are not wading through SLAs and trouble tickets this reduces risk while giving customers a greater comfort level. Mergers and Acquisitions Passlogix is always carefully monitoring the M&A market, especially as venture capitalists (VCs) today are moving upmarket and the smaller players (under $10 million) are looking for buyers, says Boroditsky. To date, Passlogix has not made any major acquisitions. Market Positioning Key Differentiators Boroditsky states that the Passlogix differentiators are to: Lead with innovation Deliver a solid, dependable implementation Provide reliable, ongoing support giving customers what they want 2009 IDC #

6 The greatest challenge lies in prioritizing opportunities while carefully controlling spending in focused areas. F U T U R E O U T L O O K C h a l l e n g e s a n d O p p o r t u n i t i e s Challenges In addition to the challenges posed by the economic downturn, Passlogix continues to play well in a field of very strong competitors. These currently include industry giants IBM, CA, and Novell, as well as Imprivata, Sentillion (in healthcare), Quest Software/Evidian, and, to some extent, Citrix. None of these companies have demonstrated any desire to restrict development or sales of their ESSO software as market demand is on a solid trajectory. Opportunities Passlogix enjoys the distinction of both being the only pure-play vendor in this market and benefiting from an OEM agreement with Oracle to provide ESSO technology. The company continues to enhance its ESSO base with offerings such as provisioning and authentication management capabilities and has the ability to focus on delivering specific solutions to meet customer needs at reasonable cost. Boroditsky observes that the whole notion of access has made it to the top of the list in corporations. Companies are now working on expanded distribution and better virtualization tools to meet more of their business objectives. In the past, he feels that many IT organizations were either too lax or too conservative with access security. As the interest in access security is rising, he sees interest in GRC is dropping a bit from its previous frenzied status. Nonetheless, Passlogix will have a reporting product coming out later this year. IDC believes this is a necessary component in today's IAM environment, where compliance and reporting capabilities are increasingly in demand. Another opportunity for Passlogix is realized in its Shared Accounts Manager software, which takes privileged account access and embeds these capabilities into SSO. This is different from the approach used by companies dedicated to privileged identity management, such as Cyber-Ark and BeyondTrust (formerly Symark). There are currently 500,000 users on SAM today, and according to Boroditsky, the plan is to continue to edge out that technology. Passlogix sees its opportunities as focusing squarely on secure access, and plans include expanding the strong authentication and provisioning solutions to address issues such as complex provisioning and deprovisioning (e.g., contract help, seasonal employees, and temporary workers). These capabilities are on the road map for delivery in early Characteristics for Success Security consists of products, people, and policy. IAM vendors are able to provide much of the policy for access solutions, and they are taking that position to advance 6 # IDC

7 the need for more proactive defenses that can enforce security policy as a way to prevent security threats before they are activated. Today's advanced access control and password management solutions also make it easier on the users themselves, thus saving time and money for IT operations. Market Inhibitors The uncertainty in the global economy remains the single-largest inhibitor to the software market over the next 12 months. However, IDC research shows that organizations will consider investing in software to reduce costs and improve worker productivity, and IAM falls into this category. IAM also increases corporate security. However, these software purchase considerations are currently counterbalanced by the need to avoid noncritical software expenditures whenever possible and delay infrastructure upgrades and other large projects requiring capital expenditures or hard-to-get credit. Market Accelerators/Drivers Although compliance was by far the largest market driver in 2008, other elements driving IAM sales reflected the enterprise IT need for: Enterprise single sign-on (both host SSO and Web SSO) More sophisticated password management technologies Workflow integration with provisioning systems Greater awareness and acknowledgement of the need for privileged user solutions Assessment of Market Opportunities The identity and access management market continues to thrive despite the economic downturn. This is because security and compliance are not optional in today's enterprise computing environment, and identity management technologies provide the foundation for these initiatives. Software spending, about 20% of total IT spending, will also drive spending in both hardware and IT and business services. E S S E N T I A L G U I D A N C E IDC research shows that IT enterprise security customers are focused on reducing costs, ideally by implementing fewer solutions and leveraging existing investments. Driven largely by today's economic needs, IT organizations are looking for ways to securely reduce administrative overhead while lowering traditional IT expenses such as help desk costs. The ESSO market continues to be in high customer demand. The technology itself will be in even more widespread deployment as it is offered through open SSO, managed services, and SaaS venues over the forecast period and beyond IDC #

8 A d v i c e f o r P a s s l o g i x Strategies The Passlogix strategy is to demonstrate customer success. According to Boroditsky, there is not much extra room these days for IT enterprises to take on significant technology risk without a high confidence of success. "These last nine months, I have done more financial presentation to customers than ever. In today's economic environment, no one wants to take on added risks; they want successful implementations." L E A R N M O R E R e l a t e d R e s e a r c h Worldwide Identity and Access Management Forecast Update and 2008 Vendor Shares (IDC #219008, July 2009) IDC's Software Taxonomy, 2009 (IDC #216557, February 2009) Worldwide IT Security Software, Hardware, and Services Forecast and 2007 Vendor Shares: The Big Picture (IDC #216224, January 2009) C o p y r i g h t N o t i c e This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved. 8 # IDC