Nico Popp at VeriSign has an excellent post titled "The Business of Identity". It might be the best public summary of possible business models that I have seen so far for internet identity, and for OpenID in particular.
He enumerates the following distinct models:
- The IDM Software Business Model: enterprise software
- The Service Aggregator Business Model: increased upsell and cross-sell to their subscribers by telcos, cablecos etc.
- The Security Business Model: the long tail for second-factor vendors etc.
- The Insurance Policy Model: taking liability for the correctness of assertions, in exchange for a fee
- The Lead Generation and Advertising Model: higher price-per click through better information about the consumer
This is just my simplified summary, he has a lot more detail. Note that he does not list "set up a free identity provider and wait for a cash flow miracle" ;-).
For those of us who are trying to pay the bills, we could do worse than pondering this list. I can think of a few other models — and in fact pursuing one of them — but this is an excellent start. I’m also sure this list will grow as OpenID moves from the technology enthusiasts into the world of business.