Tech Industry

Commentary: Identity services on the march

Many consumers don't want to risk privacy for the convenience of having their online identities managed. But that won't stop major vendors from trying to pique their interest.

By Avivah Litan, Gartner Analyst

Many consumers do not want to risk privacy and security for the convenience of having their online identities managed. But that won't stop major vendors from trying to pique their interest.

Gartner recently released the results of a

See news story:
AmEx joins Sun's Liberty Alliance
survey of consumers and their use of services that manage their identities online. Gartner surveyed 2,145 online U.S. adult consumers in August and found the following:

• About 95 percent of those responding register with Web sites, and more than half of them (54 percent) say they do so because the site requires it.

• Only 22 percent register to save time.

• Some 17 percent register for personalized services such as book suggestions tailored to individual preferences.

• Among the 5 percent who never register, 43 percent say they avoid registering because they don't want to be solicited, and 30 percent do not trust the sites with their financial data.

With security and privacy being e-consumers' top priorities, identity services have a long way to go before they meet consumers' basic needs and win their support. Vendors market identity services on the premise that they eliminate the hassle of repetitive Web site registrations. However, consumers aren't ready to trust identity services in exchange for ease of use, according to the Gartner survey.

Although multiple user IDs and passwords bother consumers, most don't see much relative value in having one credential to navigate the Web. Consumers don't believe that saving time and gaining convenience outweigh the potential costs--sacrificing data privacy and encouraging online solicitations.

Despite the lack of consumer interest, major players are vigorously competing for their place in the market. Microsoft's Passport already has 25 million U.S. consumers after the software giant automatically enrolled all of its Internet service provider, Hotmail and MSN e-mail users. However, only 7 million Passport enrollees know they use it, and less than 1 million have ever used it outside a Microsoft Web site.

Other major competitors include Sun Microsystems, which sponsors the Liberty Alliance of more than 30 companies, including AOL Time Warner and American Express, the latest to join. The Liberty Alliance has not established specifications and software, but if it succeeds in bringing its service to market, the members will together claim enormous market reach. AOL subscribers are among the most interested in using identity services, and AOL will likely use the Liberty system for its own still secretive Magic Carpet service.

Microsoft's online service competitors will have to launch their identity services quickly to prevent the software giant from becoming by default the primary gatekeeper of consumers' Web experiences, no matter what consumers think. Over time, Microsoft will ease the consumer's way into services that Passport interacts with and will make it difficult to interact with services that don't comply with Passport.

Despite consumers' apathy and distrust, identity services will succeed because they will be embedded into Windows XP and the Internet services that consumers will use. Accordingly, Gartner predicts that 40 million online U.S. consumers automatically enrolled in identity services will use them to access an average of three Web sites each month by the end of 2003.

(For related commentary on the Liberty Alliance, see Gartner.com.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.