IAM (identity and access management) controls who every user is and what they can reach. PAM (privileged access management) is the narrower discipline inside it that protects the few accounts able to change systems.
IAM comes first, because PAM has nothing to stand on without a single directory, MFA and a clean joiner and leaver process. A 50 person company can then get most of PAM with separate admin accounts, MFA, just in time elevation and a password vault.
- IAM covers every identity. PAM covers the privileged accounts only
- PAM is a subset of IAM, not a rival product category
- Build IAM first: one directory, MFA everywhere, prompt deprovisioning
- Most of PAM for a small company is process, not a suite
- PIM is Microsoft's name for just in time admin roles in Entra ID
On this page
- What identity and access management covers
- What privileged access management is
- IAM vs PAM is scope, not a choice between products
- Which comes first for a 50 person company
- What PAM looks like without buying a PAM suite
- How IAM and PAM work together in one day
- PIM, IGA and the other acronyms
- Where people go wrong
- Comparison
- FAQ
IAMWhat identity and access management covers
Identity and access management is the security framework of processes and tools that answers two questions for every user and system in the organization: who is this, and what access are they allowed. It covers employees, contractors, shared mailboxes, devices and the applications that sign in to other applications.
In a small or midsize business, IAM usually lives in one place: a directory such as Microsoft Entra ID, Google Workspace or on premises Active Directory. Around that directory sit the controls that make it useful.
Authentication. Passwords plus multifactor authentication, so a stolen password alone does not open the account.
Single sign-on. Business applications trust the directory instead of keeping their own user lists, so one account and one disable action cover everything.
Provisioning and deprovisioning. A new hire gets the right groups on day one, and a leaver loses every access on the last day, not three months later.
Authorization. Access to systems and data is granted through roles and groups, following least privilege: users get what their job needs and nothing more. This is role based access control, and it is what an IAM system spends most of its time doing.
Access reviews. Someone checks, a few times a year, that group membership and user access still match reality.
PAMWhat privileged access management is
What is PAM? Privileged access management is the part of IAM that deals with privileged accounts: the accounts that can change the systems everyone else depends on. A compromised user account exposes one mailbox. A compromised privileged account exposes the whole tenant, the domain, the backups and the firewall.
Privileged accounts in a typical small organization include:
- Domain admins and other Active Directory admin groups
- Global administrators and other admin roles in Microsoft 365 or Google Workspace
- Local administrator accounts on every PC and server
- Root and sudo access on Linux hosts, hypervisors and appliances
- Admin logins for the firewall, switches, backup system and RMM
- Service accounts that run applications, and the API keys and secrets they hold
- Break glass accounts kept for emergencies
PAM adds access controls that would be too heavy for ordinary users. Credentials live in a vault and are checked out instead of remembered. Privileged access is granted for a task and then removed, which is called just in time access. Admin sessions can be recorded, and shared passwords are rotated automatically.
The aim of PAM security is to reduce standing privilege, which is admin access that exists all the time whether or not anyone is using it. Fewer standing rights means fewer paths from one stolen password to the systems and sensitive data the organization cannot afford to lose.
ScopeIAM vs PAM is scope, not a choice between products
The IAM vs PAM question is often framed as a buying decision between two categories of security solutions. It is really a question of scope. IAM manages all users and their everyday access to applications and data. PAM applies stronger access control to the small set of identities whose misuse would do the most damage.
That is why vendors describe them as complementary. PAM systems read users and groups from the directory, rely on its MFA and assume that leavers are already disabled there. A vault that hands a domain admin password to an account that should have been removed two months ago has protected nothing.
The practical differences sit in who is covered and how tightly. IAM solutions aim for convenient user access at scale: single sign-on, self service password resets, automatic provisioning. PAM solutions deliberately add friction for a few privileged users: approval, a time limit, a recorded session.
Both serve the same zero trust idea that no user is trusted just because they signed in once. IAM and PAM together give the organization one access management strategy with two levels of control.
What firstWhich comes first for a 50 person company
IAM comes first, and for a 50 person organization that is not close. PAM on top of a messy directory protects the admin accounts while the actual attack path runs through a former employee's forgotten account or a user without MFA. Identity security starts with the everyday accounts.
A reasonable order:
1. One directory as the source of truth. Every account for every business application traces back to it. 2. MFA on every account, starting with admins and email. Phishing resistant methods for admins where the platform supports them. 3.
A joiner, mover and leaver process that someone actually follows, with HR notifying IT on the day. 4. Single sign-on for the applications that support it, so a disable takes effect everywhere. 5. Then the privileged layer, described in the next section.
Rules that block sign-ins from unmanaged devices or unusual locations, such as conditional access in Entra ID, belong between steps 2 and 5 and apply to admins first.
PAM on a budgetWhat PAM looks like without buying a PAM suite
A dedicated PAM solution makes sense for large organizations and regulated industries that hold sensitive data at scale. A company of 20 to 100 users can cover most of the security risk with IAM tools it already owns and a few habits.
Separate admin accounts. Each administrator has a normal account for email and browsing and a second account used only for admin work. The admin account has no mailbox and is never used to read mail or browse, which removes the most common way admin credentials get phished.
MFA on every admin account, without exceptions. Including the MSP's accounts and the break glass account, which gets a hardware key stored somewhere safe.
Just in time elevation. In Microsoft Entra ID this is Privileged Identity Management. Microsoft's documentation describes it as providing time based and approval based role activation, with just in time privileged access to Entra ID and Azure resources.
Microsoft's licensing page says PIM needs Entra ID P2 or Entra ID Governance licenses. Microsoft 365 Business Premium includes P1, not P2, so check before planning around it.
A password vault for shared credentials. Firewall, switch, printer and appliance logins go into a business password manager with per person access and an audit log, not a spreadsheet.
Unique local admin passwords. Microsoft's Windows LAPS documentation describes it as a built in Windows feature that rotates and backs up the local administrator password on each device, at no cost on supported platforms.
Fewer admins. Count the global and domain admins. For a company of this size, two to four is usually enough. Every extra one is extra exposure.
Service accounts with an owner. Each one is documented, has the least privilege that works and a secret stored in a vault. The page on CyberArk vs HashiCorp Vault covers the two ends of the secrets and privileged credential market.
In practiceHow IAM and PAM work together in one day
The two systems are easiest to tell apart by following one person through a working day.
Signing in is IAM. A user opens a laptop, authenticates against the directory with a password and a second factor, and single sign-on carries that authentication into email, the file store and every business application. IAM decided which applications appear and which data the user's groups allow.
Doing admin work is PAM. The same person, this time an administrator, needs to change a firewall rule. Instead of signing in with standing privileged access, they request elevation for two hours, or check the credential out of a vault. The privileged session is recorded in a log that names who took the access and when.
Leaving is IAM again, and PAM depends on it. The account is disabled in the directory on the last day, which closes every application behind single sign-on. If that user held privileged access, the vault entries and admin group memberships have to go too, and shared credentials they knew need rotating.
That is the working relationship. IAM authenticates users and grants everyday access across the organization. PAM governs the small number of accounts that can change the systems themselves, and it trusts IAM to say who those people are.
VocabularyPIM, IGA and the other acronyms
Three more terms turn up in the same conversation, and two of them are close relatives.
PIM. Privileged identity management. In the PIM vs PAM comparison the two overlap almost completely, and Microsoft uses PIM as the name of the Entra feature that activates privileged roles for a limited time. Treat PIM as the identity side of PAM rather than a separate discipline.
IGA. Identity governance and administration: the reviewing and reporting layer of IAM, covering access requests, approvals, certification campaigns and the evidence auditors ask for.
Zero trust. Not a product but a principle, that no user or device is trusted by location. It is why access control decisions are made per request, with the identity and the device state as the deciding signals.
PitfallsWhere people go wrong
Buying PAM solutions before fixing IAM. Stale accounts, shared credentials and users without MFA remain the easier way in, and the PAM tool does not see them.
Daily work on an admin account. A global admin who reads email in the same account turns every phishing message into a tenant level incident.
Treating the MSP's access as outside scope. Provider accounts are privileged accounts. They need MFA, named individual logins and a record of what they did.
Forgetting service accounts. They rarely have MFA, their passwords never change and nobody remembers what depends on them. List them, give each an owner and restrict where they can sign in.
One shared local admin password. When every PC has the same one, one compromised laptop reaches all of them.
Permanent admin roles in Entra ID. Where PIM is licensed, eligible assignments with activation are the point. Leaving everyone permanently active pays for the feature and skips its benefit.
ComparisonIAM and PAM compared, and which one to build first
| Criterion | IAM | PAM |
|---|---|---|
| Who it covers | Every user, device and application | Privileged accounts only |
| Main goal | Right access for everyone, conveniently | Tight control of the most dangerous access |
| Typical controls | Directory, SSO, MFA, provisioning | Vault, just in time elevation, session recording |
| Access model | Standing access based on role | Temporary access for a task |
| Friction for users | Low by design | Deliberately higher |
| What it protects | Everyday access to applications and data | Systems, security settings and sensitive data |
| Failure it prevents | Leavers and overshared access | Takeover of the whole environment |
| Order of adoption | First | On top of IAM |
Two rows matter most: what each protects and the failure it prevents. A missing IAM control usually exposes one account or one application. A missing PAM control exposes everything, which is why the privileged layer gets the heaviest controls. The order row explains why you still build IAM first: PAM depends on it.
FAQFrequently asked questions
What is the difference between IAM and PAM?
IAM manages every identity in the organization and what each can access. PAM is a specialized part of IAM that adds stronger controls, such as vaulting, just in time access and session recording, to the privileged accounts that can change systems.
PAM vs IAM: which should a small business do first?
IAM. A single directory, MFA on every account and a reliable leaver process remove the most common ways in. PAM controls then protect the admin accounts, and they depend on the directory being clean and current.
What is PAM in cybersecurity?
Privileged access management is the practice of securing, controlling and monitoring accounts with elevated rights, such as domain admins, global admins, root and service accounts. It limits how long privilege lasts and records how it is used.
What is identity and access management?
Identity and access management is the set of processes and tools that establish who each user or system is and what it may access. It includes a directory, authentication with MFA, single sign-on, provisioning, deprovisioning and periodic access reviews.
Is PAM part of IAM?
Yes. PAM is usually described as a subset of IAM that focuses on privileged identities. It relies on the IAM directory for users, groups and authentication, then adds tighter controls for the accounts that can do the most damage.
What is the difference between PIM and PAM?
PAM is the broad discipline of controlling privileged access. PIM, privileged identity management, focuses on managing privileged identities and role assignments, and is also the name of Microsoft Entra's feature for time bound, approval based activation of admin roles.
What counts as a privileged account?
Any account that can change configuration, security settings or other users' access. Domain and global admins, local administrators, root, network device admins, backup and RMM admins, service accounts and break glass accounts all qualify.
Do I need a PAM tool if I have MFA?
MFA is the most important single control, but it does not limit standing privilege, rotate shared passwords or record admin sessions. A small company can cover much of that with separate admin accounts, a vault and just in time roles.
What is just in time access?
Just in time access grants privileged rights only when someone needs them for a task, usually for a set number of hours and sometimes after approval. When the time runs out the rights are removed, so no one holds admin access permanently.
Does Microsoft 365 Business Premium include PIM?
No. Business Premium includes Microsoft Entra ID P1. Microsoft's licensing documentation says Privileged Identity Management needs Entra ID P2 or Entra ID Governance licenses for the users who get eligible or time bound role assignments.
How many admin accounts should a small company have?
As few as the work allows. Two to four people with global or domain privileged access is usually enough for an organization of 50, each with a separate admin account, plus one or two break glass accounts kept for emergencies.
What is least privilege?
Least privilege means giving each user, admin and service only the access its job requires and nothing more. It applies to IAM through roles and groups, and to PAM through removing standing admin rights and granting them temporarily.
Keep readingRelated concepts
Read next · Identity and access What Is MFA? How multifactor authentication works, and which methods resist phishing well enough for admin accounts. Open this next16 min- Identity and access · 8 min Conditional Access, and the Policy That Locks Out the Person Who Wrote It The Entra ID policies that decide when a sign-in is allowed, and how to scope them to admins first.
- Identity and access · 12 min CyberArk vs HashiCorp Vault Two very different tools for vaulting privileged credentials and application secrets, compared.