Single Sign-On and the Identity Economy

Ever since the first prehistoric human beings emerged from their caves and began ordering goods and services on the internet, humankind has longed to cut down on the number of passwords we have to keep track of.

For many years this urge was left unfulfilled. The number of websites we used on an everyday basis continued to multiply, as did the penalties of getting your password hacked. At one point, it was totally reasonable for a single person to have separate identities for their accounts with Gmail, Bank of America, Geico, Facebook, Twitter, Netflix, Amazon, Paypal, and so on and so forth, each with a different username and password.

Those were dark times indeed.

The Long March Towards Single Sign-on

Somewhere along the way, however, somebody dared to question this sadistic system. Why, they asked, can’t all of these services know me by the same name? And with that, the long march towards unified identity began. At first, it was just a handful of single-login providers who took up the call. But slowly, over time, these niche products were joined by a host of other vendors with varying objectives but a common end goal of single sign-on identity.

The unified identity movement is still young. and up to this point has been driven primarily by the user experience benefits. We all hate remembering dozens of user names and passwords and plugging them in every time we want to access an account. I don’t know about you, but a product that can skip this step and use an existing identity that I already use is much more likely to win my business.

The full benefits of single sign-on for businesses are only just beginning to be realized, however. Just a few examples:

1) Increased Conversion

If you can make signing up for your product more painless, more people will do it. One-click access using Facebook or Twitter streamlines the signup process and should (at least logically) increase conversion rates.

2) Droves of Customer Data

Another benefit of single sign-on is that it keeps track of meaningful relationships between user activities that would be virtually impossible to discover otherwise. Knowing what other websites a Twitter user is logging into could be tremendously valuable information, either for Twitter’s marketing department or if sold to a third party.

3) Security

I’ve been conditioned to plug in some combination of my typical usernames and passwords indiscriminately every time I’m asked, which is a terrible habit and will likely end with my identity being stolen. Single login helps mitigate this risk by keeping the knowledge of my identity limited to one authority (i.e. Twitter) and accessed via their API, instead of being strewn across questionably secure sources all over the internet.

While the process is still in its infancy, the combination of better usability and business benefits makes it a sure bet that your identity will continue to consolidate. The only question remaining is which company will reap the benefits. Early frontrunners were pure-play single login companies. In recent years, they’ve been replaced by ubiquitous personal accounts like Gmail, Twitter, and Facebook. However, judging by the number of login credentials the average person still has to manage, the winner may just be a company you’ve never heard of.

Take Zoove, a company whose primary product is **Me, a ‘vanity’ phone number with a length of your choosing. If Zoove catches on, it isn’t unthinkable that your phone number could be your single personal identity. Given the consumer demand, the winner-takes-all dynamic, and the amount of marketing and investment dollars likely to pour into the industry (some of them ours — see our recent investment Unbound ID), who will ultimately come out on top is anything but a sure bet. That said, there are two certainties in the identity economy:

The future will look different from the past,
and billions will be made making it that way.