IAM Overhaul Needed for AI-Driven, AI Security Push

Traditional Identity and Access Management (IAM) systems are ill-equipped to handle today’s dynamic digital ecosystems, where identities span across users, machines, APIs, and services.

Legacy IAM frameworks, built for static environments, struggle with the scale and agility required for cloud-native and hybrid infrastructures. The rise of non-human identities—such as bots, IoT devices, and microservices—has introduced new vulnerabilities, with machine identities now linked to 60% of breaches.

Fragmented IAM tools lead to inconsistent policy enforcement, increasing exposure to evolving threats like credential abuse and API exploitation. A report highlights a 300% surge in API-related security incidents over two years.

Compounding the issue, regulations such as GDPR and CCPA require precise control over data access—something outdated systems cannot deliver effectively. To close these gaps, organizations are shifting toward zero-trust models, identity orchestration platforms, and AI-driven anomaly detection to ensure scalable, secure, and compliant identity management.

Despite having tools like privileged access management and identity governance, enterprises often lack the resources to use them effectively—creating a critical gap in identity and access management (IAM). The concern is on increasing adoption of agentic AI approach.

The recent announcement, of Palo Alto Networks plans to acquire CyberArk for $25 billion, signaling a major push into the identity security space as agentic AI and credential-based ransomware threats rise.

CEO Nikesh Arora emphasized that the fragmented IAM market is ripe for platform consolidation, especially with AI agents demanding real-time governance and broader privileged access. “CyberArk is the largest and only pure-play identity security company,” Arora told investors, noting the move would add a net-new platform to Palo Alto’s portfolio and strengthen its leadership in securing both human and machine identities.

The deal, expected to close by mid-2026, will boost revenue and gross margins, according to CFO Dipak Golechha, and is projected to enhance free cash flow per share by August 2027—even before factoring in synergy gains. The acquisition marks a strategic shift to deliver unified identity security at scale, in a threat landscape dominated by AI and non-human entities.