Andrew Jaquith, program manager with analyst firm Yankee Group, has published an insightful report on OpenID and the enterprise, called OpenID Makes Blogging Easier, but Don't Bank on It Yet (Yankee Group subscription required).

And I'm not just saying that because he quotes me in it or because he allowed me to quote from it on this blog ;-).

Listen to this:

The bottom line: OpenID is a disuptive technology that allows web sites to share identity information and streamline authentication processes. Enterprises with a significant online presence can increase contact with their customers by adopting OpenID.

This is an excellent way of summarizing what this is all about, from the perspective of the enterprise. This is also the first analyst report I've seen that does not qualify OpenID and/or internet identity with some kind of conditional or hedge ... and the report was written before this weeks' endorsement of OpenID by IBM, Microsoft, VeriSign, Google and Yahoo! It's a sign just how far OpenID has come in the past 12 months.

Diving more intil the details, he writes:

In [a] ... survey ..., respondents indicated that they maintained an average of 60 online accounts, with several reporting more than 200.

...Yankee Group believes that OpenID has a potentially much wider effect than just the blogosphere. We expect it will be a central player in the Identity Big Bang that Yankee Group expects to emerge by 2012.

...OpenID has caught the imagination of the blogging world in a way that the Liberty Alliance, IBM's Higgins Project and Microsoft's CardSpace never have ...

He goes on to describe what he calls "still ... serious technical flaws", including:

• Susceptible to phishing attacks...
• Limited assurance of the end user's level of authentication...
• Identity provider can monitor the user's authentication habits...

but follows that up with some market scenarios how certain players in the market can address them, essentially as a value-added service on top of basic OpenID identity hosting. Going clearly beyond a run-off-the-mill report into insightful territory, he predicts that identity providers will split into two market categories, those that offer higher levels of assurance, and those that don't or won't or can't:

By 2010, Yankee Group expects that a differentiated, stratified ecosystem of OpenID-Plus identity providers will emerge to make OpenID useful enough for businesses to adopt en masse.

From the context, I interpret "en masse" to mean, for many/all types of business activities that he lists earlier, such as: outsourced HR and payroll management, retirement benefits, health care web sites that store patient/plan details, electronic banking websites, stock trading sites, e-commerce stores, auction sites, electronic payment services, supply chain hubs, and aerospace and defense collaboration portals. In other words, everything.

Coincidentally, when pressed, I tend to come up with a schedule not all that different from his. I qualify mine with "when I attempted to predict the next 12 months of OpenID at the beginning of 2007, I very clearly underestimated the traction that OpenID did get this most recent year." So if past (underestimated) performance of mine in predicting OpenID traction is a predictor of future prediction results, OpenID adoption for serious business might well happen faster than his or my time line.

Which is why I strongly believe this now: enterprises that believe to be the leaders, or want to be the leaders, in web-based customer interaction in their markets better start paying attention to how OpenID will impact them, starting now. Just one number to chew on:

Imagine that today, 10% of your website visitors can't log in and go to your competitor instead, but you also get 10% of your competitor's traffic, because they have the same problem.

Not only does your competitor out-compete you with their existing customers, but they keep taking 10% of your customers, every day, and you get nothing back. If this isn't a "leapfrogging" kind of scenario in terms of competitive dynamics, I don't know what is ...

But back to Anrew's report: I'm very much looking forward to reading more from him on OpenID and what that means for business.