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I wasn't inspired to do a predictions list until I read Eric Nolan's excellent identity predictions for 2006. First, I'll comment on some of his predictions, then later I'll post mine.

Some of Eric's predictions:
1. The Acquisition Cycle Continues.
Yes, we know that 2005 felt like a big acquisition year for identity -- but, trust us, we're just getting started. 2006 will see acquisitions continue.

2. The Funding Continues as well.
VC funding in this sector won't stop. In fact, we believe that VCs will get more and more aggressive, as startups will increasingly "pitch" themselves as identity companies and new products will increasingly be seen as identity products.
But not in Atlanta - you heard it here first ;).

3. The Identity Universe will be seen to be expanding.
As we've been highlighting on the blog, companies are now beginning to change their positioning so that they're "identity companies" -- and really they are. In fact, the identity universe is (in spite of all of the acquisitions) expanding. In 2006, companies will start rushing to associate themselves with identity.
Or even before '06, by aggressively quoting Eric Nolan's blog.

7. Strong Auth is the story of the year.
The effects of the FFIEC guidelines haven't even begun to be felt -- 2006 will be the year of strong auth. We won't encounter the problems (yet), just the success. Be prepared to cut through the hype, and watch as the terms "layered authentication" become standard place among industry insiders.
Couldn't agree more. More on "layered authentication" later and why you should think carefully about vendors that use the term.

8. "Risk Management" becomes the identity driver.
In conjunction with strong auth, we'll all come to see that "risk management" is the larger business driver behind the identity deployments in 2006. Watch the analysts as they bear this out - "risk management, risk management, risk management" -- it just sounds daunting ;-).
The big battle in strong auth will fraud detection/machine auth/non-crypto systems vs cryptographic-based systems. Can you manage risk effectively with without the user being involved? What is the cost of that versus risk management with true two-factor authentication.

If you look at ALL of the above, you'll begin to understand why our theme for the 2006 show is "Managing the decentralization of identity" -- identity is everywhere and its not getting centralized; managing that state of distribution is the key.
Should be a very exciting year!

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