"Identity as a Service, or IDaaS is cloud-based authentication built and operated by a third-party provider. IDaaS companies supply cloud-based authentication or identity management to enterprises who subscribe.
The "as-a-service" model in information technology is easy to understand. It means some feature is being delivered or served to a company through a remote connection from a third-party provider, as opposed to a feature being managed on site and by in-house personnel alone. Think of local email, such as Microsoft Outlook or Thunderbird, operating primarily on one's own computer versus cloud email, such as Gmail, being provided to users as a service through web connections. Identity, security, and other features can similarly be provided as a service.
The goal of an Identity Service is to ensure users are who they claim to be, and to give them the right kinds of access to software applications, files, or other resources at the right times. If the infrastructure to make this happen is built on site, then the company has to figure out what to do every time a problem comes up. If Bring Your Own Device (BYOD) employees are changing to different types of phones, for example, the local identity provisioning has to adapt immediately. It is much simpler to implement a centralized cloud-based system created by identity experts who have already solved such problems for hundreds of organizations." Okta