Machine Identities and the AI Adoption Challenge in Identity Security
The landscape of identity security is undergoing significant changes due to the rising number of non-human identities (NHIs), accelerated adoption of AI, and increasing vendor fragmentation. As we advance into 2026, organizations must adapt their approaches to identity and access management (IAM).
Current State of Identity Management
According to a recent report by ManageEngine, organizations are now managing 100 times more machine identities than human identities. Despite the rapid adoption of AI, there exists a stark divide between corporate leaders and operational teams regarding expectations from AI versus its actual capabilities.
As companies consolidate platforms to streamline their security operations, there is a growing need to manage these non-human identities effectively. The report highlights that most of the 515 senior identity and security professionals surveyed plan to either maintain or increase their identity security budgets this year.
Architectural Simplicity vs. Risk Management
Ramanathan Kannabiran, director of product management at ManageEngine, emphasizes that the pressing question has shifted from whether organizations are compliant to whether their identity architecture can support growth without amplifying risks or operational burdens. Organizations that invest in architectural simplicity and scalable governance models for non-human identities are better positioned to adapt to emerging threats.
Challenges of Non-Human Identity Expansion
Organizations are facing ratios of machine identities to human users as high as 500:1. Alarmingly, only 12% of organizations have automated lifecycle management for these machine identities, leading many to rely on manual processes that are not scalable.
The surge in NHIs is driven by automation, cloud adoption, DevOps practices, and AI-driven orchestrations, resulting in an overwhelming number of API keys, service accounts, OAuth tokens, TLS certificates, and other credentials used across various applications and systems.
The AI Paradox
Interestingly, while AI is creating more identities that require governance, organizations are also leveraging AI to manage this complexity. However, effective AI implementation requires mature data foundations and unified visibility, which are challenging to achieve with fragmented identity stacks.
Despite 66% of organizations expressing confidence in AI delivering value, only 44% are currently witnessing positive outcomes. This gap highlights a disconnect between executive expectations and operational realities.
The Need for Consolidation
Consolidating security platforms is crucial for organizations, as about a third spend more time managing IAM vendors than privileged users. Almost 75% of U.S. organizations have a fragmented IAM stack, prompting 36% to consolidate platforms and 46% to evaluate consolidation plans.
Ramakrishnan notes that most organizations recognize the identity complexity has surpassed their current management capabilities, making execution of consolidation critical.
Shifting Roles of MSSPs and MSPs
The roles of Managed Security Service Providers (MSSPs) and Managed Service Providers (MSPs) in identity security are evolving. They must assist organizations in simplifying their identity architectures while being transparent about the risks posed by fragmented stacks.
MSSPs should lead in governing machine identities, addressing the capability gap that most in-house teams cannot fill. They must build expertise in machine identity discovery, automated lifecycle controls, and continuous monitoring.
Force Multipliers in Identity Management
MSSPs can deliver the cross-functional expertise that organizations struggle to maintain internally. They can also provide the necessary AI implementation expertise and establish frameworks for AI-based decision-making. By helping clients consolidate tool sprawl and automate routine processes, they can enhance institutional knowledge rather than create dependency.
In June 2025, ManageEngine launched MSP Central, a unified platform designed to streamline functions such as service delivery, device management, threat protection, and infrastructure monitoring, further emphasizing the importance of cohesive identity management.
