Why Digital Identity Is Becoming Critical Infrastructure

Digital identity was once largely associated with usernames, passwords and authentication. Today, it determines far more than whether someone can log in.

Nowadays identity determines which systems a person, application or machine can access, what actions they are allowed to perform, which data they can see and whether services can continue operating at all.

As organisations move towards cloud-native and increasingly automated environments, identity is becoming the invisible layer binding infrastructure together. With this comes a new question about resilience, “What happens when the system responsible for deciding who and what can access everything else becomes unavailable?”

For organisations that depend on centralised identity providers, single sign-on, privileged access management, machine identities and automated access policies, an identity failure can quickly become an infrastructure problem.

Identity has evolved from being a purely security-related function into being critical infrastructure the enterprise needs to operate.

What is Digital Identity Infrastructure?

Digital identity infrastructure encompasses the systems and processes used to establish, verify and manage identities across an enterprise. These can include identity providers, single sign-on, MFA, IAM, privileged access management, machine identities, access policies and digital credentials.

These systems now increasingly sit between users and the services they need to use to perform their jobs. An employee may authenticate once through an identity provider before accessing email, collaboration tools, cloud platforms, financial systems and internal applications.

An application may use an identity to access a database. A workload may need credentials to communicate with another workload. An automated agent may require permission to perform an action on behalf of a user or organisation. In each of these cases, identity acts as a sort of checkpoint between one capability and another.

It sits within the overlap between people, applications, data, devices and infrastructure. It acts less like a standalone system and more like the centre of a Venn diagram connecting everything around it. This makes it increasingly difficult to separate identity infrastructure from the infrastructure it enables.

Identity: The Connective Tissue of an Enterprise

Identity operates across the public and private clouds, SaaS applications, APIs, endpoints and distributed workloads that make up modern enterprise environments. Across these environments, identity helps establish the relationships between systems and determine whether those relationships should result in access.

It answers questions such as:

• Who is requesting access?
• What is this application?
• Which device is making the request?
• What is this workload allowed to do?
• Which data can it access?
• Which actions require additional verification?
• When should access be revoked?

This is one reason identity has become central to zero-trust architectures, where access decisions are based on identity and context rather than assumed trust.

The Problem of Dependency

The more services that depend on identity, the greater the potential impact when those very identity services become unavailable. Consider a hypothetical organisation where employees use a central identity provider to access most of their critical applications.

If the identity service becomes unavailable, a domino effect is set into motion. The applications may remain operational, the cloud infrastructure may still be running and databases may still contain data. Yet employees could be unable to access the systems they need.

This illustrates an important distinction between system availability and business availability: service can technically remain online and functional but those who need it aren’t able to use it how they need to.

The same problem can occur with automated systems. If machine identities, service accounts or authentication mechanisms fail, applications may be unable to communicate with one another. Automated processes can stop. APIs may reject legitimate requests. Background jobs can fail.

The infrastructure has not necessarily "gone down". Instead, the trust relationships that allow it to function at 100 per cent have broken down. The goal is not to eliminate dependencies as that would be unrealistic. It’s to understand where they exist and whether the organisation can continue operating when one of them becomes unavailable.

Identity Failures Can Become Resilience Failures

Traditional resilience planning often asks what happens if a server, application, data centre or cloud region becomes unavailable. The introduction of identity has surfaced another dependency to consider. What happens if the organisation cannot establish who is allowed to access which systems? This is particularly relevant during a security incident.

Suppose a major service outage requires administrators to urgently access infrastructure. If the identity provider is unavailable, the organisation may have a problem accessing the very systems they require to recover from the incident.

This can create a dependency loop. Identity enables access, access enables recovery, and recovery therefore depends on identity. The same problem can arise when organisations need to respond to compromised credentials, disable accounts or change access permissions during a security incident.

Identity is therefore both a control mechanism and an operational dependency. Availability is also a resilience concern, not a purely security one.

The Invisible Concentration Risk

Cloud adoption has made concentration risk a familiar resilience concern. Identity can create a similar risk that is harder to see because the same identity service can sit across many different applications and platforms.

An organisation may have dozens or hundreds of applications distributed across multiple providers while relying on a small number of identity systems to control the access to them. The infrastructure may be distributed, but the dependency is concentrated.

In other words, an organisation can appear highly distributed while retaining a centralised dependency. That’s particularly relevant as enterprises build increasingly interconnected environments.

Enterprises should no longer only focus on how many systems they have but how many of those systems depend on the same identity infrastructure.

Identity Is No Longer Just About People

Identity has traditionally focused on people, but the operational dependency now extends beyond human users. Applications, APIs, devices, cloud workloads, service accounts, bots and AI agents can also require identities or credentials to interact with enterprise systems.

This scale of this dependency can be significant. IBM estimates that organisations can have more than 40 non-human identities for every human identity, spanning APIs, workloads, devices, and automated services.

As automation grows, an identity outage can therefore affect more than employees trying to log in. Applications, APIs, workloads and automated processes may also be unable to authenticate or communicate with each other to complete an operation.

The practical question to consider is not simply who CAN access the business systems but which systems and processes depend on the identity layer to continue operating.

How Can an Enterprise Plan for Identity Failure?

Centralisation can provide consistent policies, stronger security controls and simpler administration. The resilience question is what happens when the identity service becomes unavailable.

Planning for identity failure starts with asking, “What happens if the primary identity service becomes unavailable?” Practical measures include:

• Establishing appropriate emergency access mechanisms for critical systems.
• Protecting privileged and break-glass accounts so they remain available during an identity outage.
• Testing recovery procedures without normal identity services to identify gaps before an incident occurs.
• Reviewing dependencies on individual identity providers and assessing the consequences of an extended outage.
• Understanding how machine identities are managed and what happens to automated processes if authentication fails.
• Regularly reviewing permissions and access relationships to prevent unnecessary or outdated dependencies.
• Including identity failures in business continuity exercises alongside other infrastructure and service disruptions.
• Defining clear ownership for identity resilience, so responsibility doesn’t sit solely with the security or IAM team.

The goal is not to eliminate every identity dependency, but to know which ones are critical, understand their potential impact and have a tested way to keep the business operating when they fail. An identity outage should not become an unrecognised single point of failure across the organisation.

EM360Tech continually explores these emerging challenges, helping technology leaders make sense of the dependencies, risks and governance questions shaping the modern enterprise.