IAM vs. PAM: 4 key differences and how to choose

When it comes to protecting your company's sensitive data and critical systems, access management is a top priority. It's the process of ensuring that the right people have access to the right resources at the right time. Two key components of access management are identity and access management (IAM) and privileged access management (PAM).

At first glance, IAM and PAM might seem like two sides of the same coin. They both deal with access control, right? Absolutely, but they each tackle it in very different ways. While they do share some similarities, IAM and PAM serve different purposes and address distinct security needs within your organization.

What is IAM?

Let's start with IAM. IAM, an acronym for identity and access management, is a framework designed to manage and control user access across your organization. It's all about making sure that employees have access to the tools and resources they need to do their jobs, while keeping unauthorized users out.

IAM systems use a variety of methods (which we’ll see shortly) to verify user identities and grant access through mechanisms like role-based access control (RBAC) and attribute-based access control (ABAC), along with based on predefined policies. For example, when you log into your work email or access a company application, IAM is working behind the scenes to confirm that you are who you say you are and that you have the necessary permissions to access those resources.

What is PAM?

Next up is PAM. PAM focuses specifically on securing and monitoring privileged accounts, operating on the principle of least privilege to ensure users only have access to what they need for their roles.

Privileged accounts are those with elevated permissions and access to critical systems and sensitive data. We're talking about administrator accounts, executive-level access, and other high-level user accounts that have the power to make significant changes to your systems and access your company's most valuable information.

PAM solutions provide an additional layer of security for these high-risk accounts. They keep a close eye on privileged account activity, monitoring for any suspicious behavior or potential cybersecurity breaches. Some privileged access management tools include session recording capabilities that track and log all actions taken during privileged sessions, enabling detailed forensic analysis, compliance reporting, and incident response.

IAM vs. PAM: Key differences

So, what sets IAM and PAM apart? Let's break it down:

1. Scope of access

IAM has a broad scope, managing access for all users across various applications and systems. Its primary focus is ensuring that employees have access to the tools and resources they need,  such as email, business applications, and standard workplace tools, to perform their job duties. 

On the other hand, PAM has a more targeted scope, specifically focusing on privileged accounts with elevated access to critical and sensitive data, such as system administrators who manage servers, databases, and security configurations. These are the accounts that require extra attention and protection due to the potential damage they could cause if compromised. 

2. Level of control

IAM solutions provides a foundational level of access control by verifying user digital identities and granting access based on predefined policies. They also manage the automated provisioning and de-provisioning of user access, along with regular access reviews to maintain security over time. It's like the first line of defense, making sure that only authenticated users can enter your systems. 

PAM takes access control a step further by offering more granular control and visibility over privileged accounts. It monitors and logs privileged account activity, providing detailed audit trails and real-time alerts for any suspicious behavior. This is essential for detecting and responding to potential cybersecurity incidents quickly, before they can cause significant damage.

3. Risk mitigation

Both IAM and PAM contribute to risk mitigation, but they address different types of threats. IAM helps prevent unauthorized access by ensuring that only verified users can access your systems and applications, reducing the risk of external threats.

PAM, on the other hand, focuses on mitigating risks associated with insider threats and privileged account abuse. It monitors for abnormal behavior patterns that might indicate a privileged user is misusing their access. Even if an attacker manages to gain access to your systems, PAM solutions make it much harder for them to move laterally and escalate their privileges. 

4. Compliance

Many industries have specific compliance regulations that organizations must adhere to, especially when it comes to handling sensitive data. Both IAM and PAM play crucial roles in meeting compliance requirements—IAM by controlling access to personal data and financial records as required by regulations like GDPR and SOX, and PAM by managing privileged access to critical systems.

Since privileged accounts have access to sensitive information and critical infrastructure, PAM solutions are essential for demonstrating compliance with various regulations. Whether it's HIPAA for healthcare organizations, PCI DSS for companies handling credit card data, or GDPR for businesses operating in the European Union, PAM solutions provide the detailed audit trails and access controls necessary to meet these stringent requirements and avoid costly penalties.

Here's a table summarizing the key differences between IAM and PAM:

IAM vs. PAM: Use cases

Now that we've covered the key differences between IAM and PAM, let's explore some real-world use cases to help you determine which solution is right for your organization.

IAM use cases

IAM is a good fit for businesses that need to manage and control user access across a wide range of applications and systems. Some common use cases for IAM include:

1. Employee onboarding and offboarding: IAM streamlines the process of granting and revoking access to company resources as employees join, move within, or leave the organization. With IAM, you can automate the provisioning and deprovisioning of user accounts, ensuring that new hires have access to the tools they need from day one, employees transitioning between roles or departments maintain appropriate access levels, and that former employees are promptly removed from your systems.
2. Single sign-on (SSO): IAM enables users to access multiple applications with a single set of credentials, simplifying the login process and reducing password fatigue. This not only makes life easier for your employees but also reduces the risk of password-related security incidents, such as weak or reused passwords.
3. Multi-factor authentication (MFA): IAM adds an extra layer of security by requiring users to provide additional verification, such as a code sent to their phone, before granting access. MFA helps protect against account takeover attempts and ensures that even if an attacker manages to guess or steal a user's password, they won't be able to access your systems without the additional verification factor.
4. Role-based access control (RBAC): IAM solutions enable organizations to define and manage user roles and permissions based on job functions. This makes it easier to maintain consistent access policies across the organization, reducing the risk of excessive permissions and simplifying access management as employees change roles or departments.
5. Identity governance and compliance: IAM solutions help organizations maintain compliance by providing comprehensive identity governance capabilities. This includes regular access reviews, automated policy enforcement, and detailed reporting on user access patterns. These features help ensure that access rights align with business needs and compliance requirements, while making it easier to identify and remediate potential security risks.

PAM use cases

PAM is ideal for organizations that need to secure and monitor high-risk, privileged accounts. Some common use cases for PAM include:

1. Securing administrative accounts: PAM ensures that only authorized users can access administrative accounts and that their activities are closely monitored and controlled. This is critical for preventing insider threats and limiting the damage that a compromised admin account can cause.
2. Compliance with industry regulations: PAM helps organizations meet compliance requirements by providing detailed audit trails and session recording capabilities for privileged account activity. This level of visibility is essential for demonstrating compliance with regulations like HIPAA, PCI DSS, and SOX.
3. Preventing privilege escalation attacks: PAM solutions help prevent attackers from gaining elevated privileges and moving laterally through your systems. By monitoring and controlling privileged account activity, PAM makes it much harder for attackers to escalate their access and compromise additional systems.
4. Managing third-party access: Many organizations need to grant privileged access to third-party vendors and contractors. PAM solutions provide a secure way to manage and monitor this access, tracking all activities of remote vendors to prevent misuse of elevated privileges and ensuring that external users only have the permissions they need and that their activities are closely tracked.
5. Secure remote access: With remote work becoming the standard, securing privileged access for remote users has become a top priority. PAM solutions offer secure remote access capabilities, such as just-in-time privileged access, geo-fencing controls, and adaptive authentication policies. While IAM handles the initial authentication through MFA, PAM ensures that remote privileged users are accessing your systems safely and securely.

PAM vs. IAM: Pros and cons

Both IAM and PAM have their strengths and weaknesses. Let's take a closer look at the pros and cons of each solution:

IAM pros

• Streamlines user access: IAM simplifies the process of granting and revoking access to company resources, reducing administrative overhead.
• Improves user experience: With single sign-on and centralized identity management, IAM makes it easier for users to access the resources they need to do their jobs.
• Enhances security: IAM helps prevent unauthorized access by ensuring that only authenticated users can enter your systems.

IAM cons

• Limited visibility: IAM may not provide the same level of visibility and control over privileged accounts as PAM.
• Complexity: Implementing IAM across multiple systems and applications can be complex and time-consuming.
• Ongoing maintenance: IAM requires regular updates and maintenance to ensure that access policies remain current and effective.

PAM pros

• Granular control: PAM offers more granular control over privileged accounts, allowing organizations to set specific access policies and monitor activity closely.
• Enhanced security: PAM provides an additional layer of security for high-risk accounts, reducing the risk of insider threats and data breaches.
• Compliance: PAM solutions often include features that help organizations meet compliance requirements, such as detailed audit trails and session recording.

PAM cons

• Higher cost: PAM solutions can be more expensive than IAM, especially for smaller organizations.
• Complexity: Implementing and managing PAM can be complex, requiring specialized knowledge and resources.
• User resistance: Some users may resist the additional security measures and monitoring that come with PAM, seeing it as an inconvenience or a lack of trust. This can however be addressed through proper user training.

Rippling: Enhanced access management for your business

You've seen how IAM and PAM each play their part in keeping your organization secure. Whether you're just starting to build your cybersecurity foundation or looking to strengthen your existing setup, implementing the right IAM solution is a crucial first step. That’s where Rippling comes in.

Rippling is an all-in-one platform that combines HR, IT, and identity management, making it easier to handle employee data and access management in one place. Unlike traditional IAM solutions that operate in isolation, Rippling's integrated approach means changes in HR automatically sync with your access management system.

Rippling's IAM features enable you to:

• Automate user provisioning and deprovisioning across all your apps and devices.
• Implement SSO and MFA to simplify the login process and enhance security.
• Easily manage access policies and permissions across your entire organization.
• Leverage hundreds of user attributes to create custom zero-trust protocols and ensure that nothing slips through the cracks.
• Set dynamic access rules to automatically ensure that the right people get the right level of access, even as their roles change.
• Link identity across systems, handling any protocol with ease—from LDAP, Active Directory (AD), OIDC, and RADIUS, to custom SCIM and SAML apps.

In addition to IAM, Rippling also offers a comprehensive suite of IT management tools, including device management and inventory management. With Rippling, you can manage your entire IT infrastructure from a single platform, streamlining your processes and reducing the risk of security gaps.

FAQs on IAM vs. PAM

What is the difference between IAM, PAM, and DAM?

IAM (identity access management) focuses on managing digital identities and access across an organization. PAM (privileged access management) specifically secures and monitors privileged accounts with elevated permissions. DAM (database activity monitoring) provides real-time monitoring and auditing of database activity, detecting unauthorized access to sensitive data and ensuring compliance with security policies and regulations. 

Do organizations need both IAM and PAM?

While IAM and PAM serve different purposes, many organizations can benefit from implementing both solutions. IAM provides a foundation for managing user access, while PAM adds an extra layer of security for high-risk, privileged accounts. The specific needs of your organization will depend on factors such as your industry, compliance requirements, and the sensitivity of your data. In general, the more sensitive your data and the more complex your IT environment, the more likely it is that you'll need both IAM and PAM.

What types of businesses benefit most from PAM solutions?

Organizations that deal with highly sensitive data, such as financial institutions, healthcare providers, and government agencies, can benefit greatly from PAM solutions. Additionally, businesses that must comply with strict industry regulations, such as PCI DSS, HIPAA, or SOX, may find PAM essential for meeting compliance requirements. However, any organization with privileged accounts that have access to critical systems and sensitive data can benefit from the added security and control provided by PAM.

What are some examples of IAM and PAM tools?

Rippling is an example of an IAM solution that offers a comprehensive set of features, including single sign-on, multi-factor authentication, and user provisioning. Other popular PAM and identity management tools include Okta, Azure Active Directory, and OneLogin. These solutions offer similar features to Rippling but may have different strengths and weaknesses depending on your organization's specific needs.

This blog is based on information available to Rippling as of February 24, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.