The most common passwords of 2021 were 123456, 123456789 and 12345. But thanks to tools like Single Sign-On (SSO) and Multi-Factor Authentication (MFA), your weak passwords will help your bosses live a little longer.

Enter Identity Access Management (IAM) — the growing cybersecurity subsector that “enables the right individuals to access the right resources at the right times for the right reasons.”

One of the greatest vulnerabilities in cybersecurity…

… Humans. Per a 2019 Verizon report, 35% of security breaches were from human error.

With more remote employees and access points to digital products, IAM has become an increasingly important part of cybersecurity. For good reasons:

• Hackers tricked Twilio employees into giving corporate logins — exposing data access to 125 of its 150K+ customers.
• Attackers hacked a Cisco employee’s personal Google account, giving access to Cisco’s VPN.

Okta (NASDAQ:OKTA) and Ping Identity (NYSE:PING) are two of the largest IAM players. Signing on to Slack? Okta manages Slack’s sign-in experience and security. But even large cybersecurity firms are vulnerable to hacks. Earlier this year, Okta reported a major hack affecting 366 customers (~2.5% of customers) — damaging Okta’s reputation.

Opening the doorway for one lesser-known competitor…

…ForgeRock (NYSE:FORG), which provides identity and access management solutions – is down 60% since it went public last September, compared to Okta who’s down 64% in the same time period. Unlike Okta, which serves a broad range of customers, ForgeRock focuses on large Fortune 100 customers.

With a market cap of $1.6B, ForgeRock is ~10x smaller than Okta but don’t discount its size. In an interview with The Technology Letter, CEO Fran Rosch – who joined in 2018 after spending decades at large cybersecurity firms — shared his big ambitions:

• “We believe that the digital identity market is massive, $50-$70B [dollars annually] over time.”
• “I see us in the next five years being the most important digital identity platform in the enterprise space.”

Investors: David (ForgeRock) vs. Goliath (Okta)

For ForgeRock, serving larger companies can make the sales process longer and more complex. Instead, Rosch is shifting the business model from a term license to cloud software as a service (SaaS) which does two things:

1. Increase the amount of revenue ForgeRock can charge.
2. Speed up the time it takes to onboard a customer.

Per Rosch, SaaS customers can generate 2-3x more annual recurring revenue than term license customers – also giving them a “couple of hundred million dollars up-sell opportunity.” By the end of this year, SaaS revenue is expected to grow from 15% to 22-27%. Okta’s recent struggle could bring more business for ForgeRock.