Identity Federation

Phil Windley posts some notes based upon his participation in a recent Ping Identity Advisory Board Meeting. He makes a great point about the implications that the use of external systems such as might have on HR practices within the enterprise.

Later, he says:

Networks eventually eat hub-and-spoke systems because of cost. This is what played out in the financial services market decades ago. Large regional banks were essentially hubs in a regional hub-and-spoke financial system. When large financial networks (‘ala Visa and Mastercard) came into being, they quickly put regional financial systems out of business based on cost. There was no reason to have the regional systems in-between the merchant and the network. All it did was add cost, without adding value. So too identity federation?

Not sure he’s got this right. Successful networks are hub and spoke systems that leverage the power and reach of all of the participants in the network to gain advantage.

Visa and MasterCard didn’t put regional financial systems out of business — rather they evolved to be the networks that allowed thousands of financial institutions, both large and small, to participate on shared platforms delivering consistent services to the institutions’ customers, both merchants and consumers.

Fundamental to their success was common agreement on what the basic product was — while also enabling proprietary innovation on top of that basic product to flourish.

Perhaps most importantly, there’s a shared governance model to the financial networks that underpins their basic structure, value, and reason for being — something I just don’t see happening among the identity wannabes and their targets.