Multi-factor Authentication Market by Component, Deployment and Geography - Forecast and Analysis 2023-2027

The multi-factor authentication market is estimated to grow at a CAGR of 21.41% between 2022 and 2027. The size of the market is forecast to increase by USD 20,806.45 million. The growth of the market depends on several factors, including the increase in the volume of online transactions, the high-level security provided by hardware OTP tokens, and the adherence to compliance mandates. 

This report extensively covers market segmentation by component (services and products), deployment (on-premises and cloud), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021. 

What will the Size of the Multi-factor Authentication Market be During the Forecast Period?

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Parent Market Analysis 

Technavio categorizes the global multi-factor authentication market as a part of the global IT consulting and other services market within the global IT services market. The super parent global IT services market cover companies offering IT consulting and system integration services, application services, electronic data processing services, business process outsourcing services, infrastructure services, and Internet services.  Our research report has extensively covered external factors influencing the parent market growth during the forecast period. 

Multi-factor Authentication Market: Key Drivers, Trends, Challenges, and Customer Landscape

The innovative features and user interfaces are notably driving the multi-factor authentication market growth, although factors such as the increase in the cost of OTP tokens may impede the market growth. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a decrease in demand for the market during the COVID-19 pandemic, a holistic analysis of drivers will help companies refine marketing strategies to gain a competitive advantage.   

Key Multi-factor Authentication Market Driver

The innovative features and user interfaces are notably driving the multi-factor authentication market growth. Consumers depend on the Internet to perform transactions. Online transactions are instant and easy. However, financial transactions are vulnerable to cyberattacks. The frequency of cyberattacks is increasing on websites where a large number of online transactions take place. Hackers aim at sectors having a huge online customer base. Many organizations have started employing authentication methods, such as phone-based authentication, software OTP tokens, hardware OTP tokens, and e-mail, to make online transactions more secure.

There has been a significant increase in the number of online services provided by companies, leading to a surge in online transactions. E-commerce sales in the US grew by 32.4% in 2020 in comparison to 2019. E-commerce still represents a small portion of retail purchases in the US. Therefore, ample opportunities exist in the US e-commerce market. Mobile operators are providing high-speed mobile broadband services that have enabled users to use bandwidth-intensive business applications. High-speed Internet services are necessary to avail of cloud-computing services, which are in high demand among enterprises. The availability of 3G and 4G networks will further boost online transactions, leading to the increased adoption of multi-factor authentication solutions and services during the forecast period.

Key Multi-factor Authentication Market Trend

The emergence of cloud-based multi-factor authentication is the primary trend driving the multi-factor authentication market growth. The rise in maintenance costs for hardware and software-based two-factor and three-factor authentication models has attracted the interest of many companies in adopting cloud-based multi-factor authentication solutions and services.  The adoption of the cloud is rapidly increasing among industries, giving rise to many security challenges for cloud service providers and other ecosystem vendors, especially in dealing with complex regulations for privacy and data protection.

To guarantee the security and safety of data on the cloud, cloud service providers are adopting technologies such as tokenization, biometric authentication, and others by implementing various models of multi-factor authentication, which can provide authentication for the safety of data stored on the cloud. The demand for multi-factor authentication for securing the data and information in the cloud environment is likely to provide huge opportunities to multi-factor authentication solution providers and cloud service providers, which will drive the growth of the global multi-factor authentication market during the forecast period.

Key Multi-factor Authentication Market Challenge

The increase in the cost of OTP tokens may impede the multi-factor authentication market growth. High initial deployment and replacement costs have increased the total cost of OTP tokens. The total cost of OTP tokens includes the initial pricing and licensing fees, infrastructure and hardware requirements, token warranty, and efforts and resources required for deploying and managing the solution. This is because regions such as South America and Eastern Europe have limited vendor penetration.

Vendors that operate in these regions are players based in US and Europe, such as Entrust, RSA Security, and VASCO. A small number of vendors controls the market, and the lack of stiff competition is resulting in high initial deployment and replacement costs. Thus, the increasing cost of  OTP tokens will hamper the growth of the market in focus during the forecast period.

Key Multi-factor Authentication Market Customer Landscape

Our analysis of the Life Cycle of the Global multi-factor authentication market from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the global multi-factor authentication market, focusing on the adoption rates of the major regions such as the US, China, Japan, Germany, and the UK. Our researchers have included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies for 2022-2027.

Global Multi-factor Authentication Market Customer Landscape

Who are the Major Multi-factor Authentication Market Vendors?                                    

Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market 

Thales Group - The company has multiple business units under its Aerospace segment. The segment combines the Avionics and Space global business units of the company. The key offerings of the company include multi-factor authentication, namely SafeNet Trusted Access. 

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, such as

• Beyond Identity Inc.
• Broadcom Inc.
• Duo Security Inc.
• Entrust Corp.
• FEITIAN Technologies Co. Ltd.
• ForgeRock Inc.
• Frontegg
• Fujitsu Ltd.
• FusionAuth
• HID Global Corp.
• Microsoft Corp.
• NEC Corp.
• Okta Inc.
• OneSpan Inc.
• Quest Software Inc.
• RSA Security LLC
• SecureAuth Corp.
• TransUnion
• Yubico AB

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak. 

What is the Fastest-Growing Segment in the Multi-factor Authentication Market?

The market share growth by the services segment will be significant during the forecast period. Multi-factor authentication solutions and services are gaining prominence in organizations to prevent people from gaining unauthorized access to critical data and tampering with critical information. People are granted access after their identity is confirmed with the information stored in the database. The major factors expected to drive the multi-factor authentication market are the increased number of data breaches and cyber-attacks and the growing adoption of BYOD among enterprises. 

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The services segment showed a gradual increase in market share, from USD 3425.03 million in 2017, and continued to grow by 2021. Increasing online transactions and e-commerce and the digitalization of financial and welfare services are the key drivers for the high adoption rate of multi-factor authentication solutions and services during the forecast period. Our report provides a brief analysis of historical and forecast market share and their segment along with their reasons for growth from 2017 to 2027.

The growth of this segment is primarily attributed to the increasing adoption of the multi-factor authentication market by residential consumers, which is driven by changing lifestyles and a growing preference for comfort.

Which are the Key Regions for Multi-factor Authentication Market?

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North America is projected to contribute 35% by 2027. Our analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

North America is more technologically developed than other regions, and therefore, the adoption of multi-factor authentication is high in the region. The increase in regulatory requirements for large banks and Payment Card Industry (PCI) companies is the major factor driving the adoption of multi-factor authentication in the region. In addition, advances in authentication solutions, such as phone-based authentication and SMS tokens and OPT tokens integrated with biometric authentication, have boosted the multi-factor authentication market growth in the US. There are also stringent government regulations in the region that compel enterprises to incorporate multi-factor authentication into their credential authentication paradigm. Government spending on multi-factor authentication is on the rise, driven by the need to safeguard confidential data from external threats. The US government is one of the key adopters of advanced authentication solutions. Such factors drive the regional multi-factor authentication market expansion during the forecast period.

This report forecasts the contribution of all the segments to the growth of the market. In 2020, the COVID-19 pandemic positively impacted the growth of the multi-factor authentication market in North America. As a result of the pandemic, several governments, including the US, Canada, and Mexico, imposed lockdowns in 2020, forcing people to stay at home to contain the spread of the disease. Therefore, the pandemic increased the demand for the digitalization of processes and created new opportunities for cloud services in end-user industries, such as banking, financial services and insurance (BFSI), healthcare, and retail. The pandemic enhanced the adoption of remote workflow processes in North American countries, which further led to ample opportunities for the growth of the multi-factor authentication market in North America in 2020. Such factors are expected to lead to the growth of the multi-factor authentication market in North America during the forecast period.

Segment Overview

Our report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2028. We have segmented the market based on deployment, component, and region.

• Deployment Outlook (USD Million, 2017 - 2027)
  • On-premises
  • Cloud

• Component Outlook (USD Million, 2017 - 2027)
  • Services 
  • Product

• Region Outlook (USD Million, 2017 - 2027)
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Argentina
    • Brazil
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Brazil
    • Colombia
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

  Multi-factor Authentication Market Scope
  Report Coverage	Details
  Page number	159
  Base year	2022
  Historical year	2017-2021
  Forecast period	2023-2027
  Growth momentum & CAGR	Accelerate at a CAGR of 21.41%
  Market growth 2023-2027	USD 20,806.45 million
  Market structure	Fragmented
  YoY growth (%)	20.37
  Regional analysis	North America, Europe, APAC, South America, and the Middle East and Africa
  Performing market contribution	North America at 35%
  Key consumer countries	US, China, Japan, Germany, and UK
  Competitive landscape	Leading companies, Competitive Strategies, Consumer engagement scope
  Key companies profiled	Beyond Identity Inc., Broadcom Inc., Duo Security Inc., Entrust Corp., FEITIAN Technologies Co. Ltd., ForgeRock Inc., Frontegg, Fujitsu Ltd., FusionAuth, HID Global Corp., Microsoft Corp., NEC Corp., Okta Inc., OneSpan Inc., Quest Software Inc., RSA Security LLC, SecureAuth Corp., Thales, TransUnion, and Yubico AB
  Market Dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.
  Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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  What are the Key Data Covered in this Multi-factor Authentication Market Report?

  • CAGR of the market during the forecast period 2023-2027
  • Detailed information on factors that will drive multi-factor authentication market growth during the next five years
  • Precise estimation of the multi-factor authentication market size and its contribution to the parent market
  • Accurate predictions on upcoming trends and changes in consumer behavior
  • The growth of the multi-factor authentication industry across North America, Europe, APAC, South America, and the Middle East and Africa
  • A thorough analysis of the market’s competitive landscape and detailed information on vendors
  • Comprehensive details of factors that will challenge the growth of multi-factor authentication market vendors

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