What is Privileged Access Management — and do you need it?

The problem: shared passwords and no paper trail

In most small and medium companies, administrators access servers using shared passwords stored in a spreadsheet, a password manager, or just passed around by chat.

This works — until it doesn't. When something goes wrong (a breach, a disgruntled ex-employee, an audit), you face the same questions:

• Who had access to which servers?
• When did they log in, and what did they do?
• Did the IT contractor you let go last month still have credentials?
• Can you prove to a regulator that only the right people accessed sensitive systems?

Without a PAM tool, the honest answer to all of these is "I don't know".

What PAM actually does

Privileged Access Management (PAM) is a security tool that sits between your team and your servers. Instead of logging in directly with a shared password, every privileged session goes through the PAM system.

The PAM system:

• Authenticates the user — confirms who they are, with MFA if required
• Checks their permissions — verifies they're allowed to access that specific server at that specific time
• Provides the credentials — connects them to the server without revealing the password
• Records everything — logs the session so you have a full audit trail

The result: you always know who accessed what, when, and what they did — and you can prove it.

A concrete example

Without PAM:

Your IT contractor finishes a project and you remove their user account. Three months later, your auditor asks: "Did this person have access to the production database server?" You check your notes. You think so, but you're not sure. You can't prove when access was granted or removed, and there's no record of what they did while they were in.

With PAM:

The contractor's access was granted through VaultPAM on day one. Every session was recorded. When access was revoked, the credential was rotated automatically. The auditor gets a one-click export: every login, every action, timestamps, duration. The answer takes 30 seconds.

Why EU companies are dealing with this now

The EU's NIS2 Directive (effective from October 2024, with enforcement deadlines in 2025–2027) requires organizations in critical and important sectors to implement access management controls for privileged accounts. Article 21 specifically mandates controls including MFA, access logging, and credential management.

This applies to a much wider range of companies than the original NIS Directive — including many mid-sized companies in manufacturing, IT services, healthcare, financial services, and public administration.

If you've received a compliance gap report, been asked about NIS2 by a customer, or are preparing for an ISO 27001 or SOC 2 audit, privileged access controls are likely on the list.

Do you actually need a PAM tool?

You probably do if any of these are true:

• Admins share passwords to servers or network equipment
• You have contractors or third parties who access your systems
• You've been asked to demonstrate privileged access controls by an auditor
• You have 10+ servers and no consistent record of who has access to what
• You're subject to NIS2, ISO 27001, SOC 2, or similar frameworks

You probably don't need a dedicated PAM tool yet if your entire infrastructure is two servers, every admin is a full-time employee, and you're not under any compliance obligation. In that case, a good password manager and a solid offboarding checklist may be enough.