Consumer identities and personal data are the most crucial assets of any enterprise. And, managing these digital identities ain't easy.
Whether you run a customer-facing application that directly targets business users or consumers at large, you will require a common workflow to function.
It usually begins with registration and login, followed by user management to accommodate various access levels, sustenance of customer relationships, and extracting business value towards the end of the cycle, commonly known as customer identity and access management (CIAM).
In majority cases, while developing a program that captures, manages, and utilizes customer data, companies come across two basic choices:
- Either they can build a CIAM solution in-house.
- Or buy a dedicated solution from expert CIAM providers in the industry.
This leads to the classic: build vs buy conundrum. In this blog, we will discuss the key considerations when making a build vs buy decision and offer the best solution for your business.
For your customer identity solution to truly benefit you, it needs to provide a complete view of each customer and improve the authentication experience to avoid customer churn, all while complying with data security and privacy regulations.
The benefits of developing an in-house identity framework were more evident in the days when organizations' identity management needs were limited to their internal employees. Today, with companies needing to improve customer experience and capture better customer data, there is an increased complexity level when implementing a customer identity solution.
So, if identity and access management do not fall under your core business operations, developing your own customer identity program can get more complicated and expensive.
Building a customer identity system involves investing critical company money and resources into your solution's development, maintenance, and ongoing improvement. More time spent on customer identity means less time dedicated to optimizing key business operations.
On the contrary, purchasing a CIAM platform allows you to free up salary costs allocated to staffing an engineering team and reduce your development and maintenance hours related to identity management.
Companies look to include some of the standard authentication features in their customer identity system, including email registration service, password management, social login, phone registration, 2FA/MFA, SSO, user segmentation, user management, integration, security, and compliance.
Organizations need to consider the development time, cost, and staffing considerations required to put these features in place.
Beyond the initial construction of an in-house solution, companies opting to build their own customer identity system often struggle to add new features and integrations or keep existing ones updated.
Either a company lacks the technical expertise or the resources or both to implement new or updated features, which can have a detrimental impact on customer experience and collect meaningful customer data.
On the other hand, a managed solution comes with the assurance that your CIAM performance will meet or exceed industry standards.
Building an in-house customer IAM solution for your company is only ideal if you have more than 10K employees working for your system. Also, if you know in and out of the entire identity management and implementation scenario. You should be well-versed with the identity standards and security requirements of the industry.
An in-house customer IAM solution is also feasible if you are working on a highly secretive project and keeping security at the core, it is impossible for you to hire a third-party solution to get the job done.
Frankly speaking, everyone else. And why not? After all, the CIAM market is growing exponentially every year, managing customer identities better and securely.
A report by MarketsandMarkets suggests the customer identity management market may reach $37.79 billion by 2023. It is only evident that companies aren't leaving their CIAM strategy to faith, especially as the market introduces new features that increase the complexity of managing customer identities and protecting sensitive information.
A well-implemented CIAM platform offers a host of benefits—enhanced user experience with self-service registration, password management, sign-sign on, and other premium features like progressive profiling, API-focused, transactional security, and data encryption to drive customer engagement and keep businesses compliant.
Speaking of use cases, comparing the two modes of deployment can be stark, with many in-premises deployments stretching on for more than a year, versus completion in as little as two weeks with a cloud-based CIAM vendor.
Still skeptical about what to choose? Before drawing any conclusion, let's understand the universe around both the options one by one.
- On-premises data center
If you plan to host your own data center, it will involve owning the entire infrastructure (obviously!) and taking responsibility for additional resources. You will need to make crucial decisions like what server model to choose and deploy network switches.
On-premises storage can be a better option for your business because you won't require users to have an internet connection to access data. If your company does not rely on the internet, maybe you won't need to invest in expensive internet plans.
On-premises servers are not accessible to anyone who isn't inside the network. Unlike cloud storage, it is least vulnerable to cybercrime, offers greater flexibility, and is a favorite option for businesses that handle highly classified sensitive data.
- Private Cloud
A private cloud is an on-demand, on-premises data center that uses a private pool of shared computing resources within a public cloud environment. One of the major advantages of cloud environments over on-premises storage infrastructure is that it allows quicker service configuration and rapid deployment of applications.
It is highly compatible with modern development technologies like agile development, DevOps, and while using containers and microservices. Though private cloud weights higher on certain economic benefits, that ability to share resources within a company isn't limitless. They are not always able to accommodate peak traffics advocated in CIAM systems.
- Public cloud
Then there are public clouds that rule out businesses' need to own data centers. They are available as platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) offerings instead.
They are highly cost-effective, especially with vendors that offer "pay-as-you-go" pricing—meaning clients need to only pay for services they use. If your application on the public cloud lies idle due to low usage, you will be charged little to nothing. Although charges will rise as usage rises.
This one resembles the on-premises build option. It is a commercial CIAM solution for companies that want to have their data center on-premises and run on their own hardware.
Although, it negates the need to develop the actual CIAM functionality, to pull this off practically will require a lot of efforts and investments. It does not help in disaster recovery management, business continuity, and latency issues that appear from not having enough physical data centers.
- Cloud-Based (Cloud-Native) CIAM
Next, CIAM solutions run on the modern cloud environment and frequently cannot be deployed on-premises in a private cloud environment.
Companies need not worry about providing hardware and data center resources. What's best is that the cloud-native model offers the highest efficiencies and optimization.
- Customer IAM Solutions
Customer identity and access management platforms like LoginRadius are specially designed and architected to handle billions of customer identities and offer the maximum value from those profiles.
They take care of login, authentication, or preference management seamlessly and comply with the frequently changing privacy regulations to enable global businesses to secure their data without a hitch.
One of the immediate results of buying a CIAM platform is its impact on your in-house team. You won't need to invest in the engineering team and dramatically reduce your identity management development and maintenance hours.
Also, the push toward cloud-based data storage means that companies can avoid hardware, software, and storage costs. Cloud storage is especially beneficial for larger enterprise companies looking to store their data in multiple regions or across different servers.
Deploying an experienced team of Identity Management experts ensures the company complies with best practices in the industry. Your CIAM expert will ensure that the implementation speed for your solution is consistent and resonates with industry standards.
Because there are no additional in-house parameters involved, your CIAM platform will be live almost instantly compared to when deployed on-premises. LoginRadius, a managed solution, for example, offers a peak load capacity of 180K logins per second, twenty times higher than the vendor average. And that's a big deal!
LoginRadius is a privacy-first cloud-based customer IAM platform that enables companies to secure, identify, and authorize their workforces and customers. Let's take a look at how it offers accelerated time-to-market and regulation enforcement at the API level for your digital projects.
The LoginRadius SSO streamlines access by allowing customers to log in to all of your web and mobile domains with a single set of credentials. By authenticating customers under a single identity, any data collected about that customer is consolidated and stored under a single profile.
Single Sign-On also eliminates the need to create multiple accounts and remember different passwords, meaning that customer experience is improved, resulting in more conversions and increased revenue.
The LoginRadius identity platform stores customer data in a centralized database. It offers a comprehensive view of each customer while interacting with multiple digital touchpoints. Not only does this centralization free up internal resources, but a unified view of each customer allows you to optimize your customer experience and implement more personalized marketing initiatives.
Multi-Factor Authentication takes something the customer knows, for example, login credentials and combines it with something they have, for example, their mobile phone to provide an additional security layer when accessing their account.
This way, even if an unwanted user gains access to a customer's login credentials, they would not be able to access the account without the unique verification code sent to the customer's authenticator app.
LoginRadius Integrations transform the way data can be leveraged to help you achieve your desired business outcomes. They provide you with the ability to automatically sync customer data between LoginRadius and any other third-party applications or business tools that you are using.
You can customize the data flow to make sure that you are syncing the right data into the right platforms and best achieve your business objectives.
The decision centering around build vs buy needs some serious consideration. However, as a trusted identity solutions provider, we understand the downside of running an on-premises data center. If you do not have an experienced team, you won't be able to plan, implement, manage, and support your project.
Use our Build vs Buy calculator to find out which option can deliver the most cost-effective solution for your business.