Identity Services Missing the Mark with Consumers

A study by Gartner found a disconnect between the consumers who don’t want one identity service to track their passwords and the companies that market them as a hassle-free way to surf the Web.

Identity services are marketed to consumers 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 survey.

“The sober truth is that although consumers are bothered by multiple user IDs and passwords, most consumers don’t see much relative value in having one credential to navigate the Web,” said Avivah Litan, vice president and research director for Gartner. “Consumers don’t believe that the potential costs, such as sacrificing data privacy and encouraging online solicitations, are worth the benefits of saving time and gaining convenience.”

According to Gartner’s survey of 2,145 online U.S. adult consumers in August 2001, approximately 95 percent of the responding online consumers register with Web sites, and 54 percent of them say they register because it is a requirement of the site. Only 22 percent register to save time. Seventeen percent register for personalized services, such as book suggestions tailored to individual preferences.

But a lack of trust and a desire for privacy, or perhaps just a need to cut down on junk email, still exists among consumers. Among the 5 percent who never register, 43 percent of them say they avoid registering because they don’t want to be solicited, and 30 percent of them do not trust the sites with their financial data.

None of this consumer reluctance seems to be registering with companies marketing such services, and this is where the disconnect becomes apparent. According to Gartner, Microsoft’s Passport already has 25 million American users after Microsoft automatically enrolled all of its Internet service provider, Hotmail and MSN email users. However, when you ask consumers, 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 the Sun Microsystems-sponsored Liberty alliance, made up of 32 companies, and AOL Time Warner. Liberty Alliance specifications and software have not yet been established, but if they are successful in bringing their service to market, the 32 companies will together claim enormous market reach, according to Gartner. And then there’s AOL subscribers, who are among the most interested in using identity services; but AOL has not yet rolled out its secretive Magic Carpet service.

“Microsoft’s online service competitors must launch their identity services quickly to prevent Microsoft from becoming the default primary gatekeeper of consumer Web-based experiences,” Litan said.

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.