Okta

What is Okta?

Founded in 2009, San Francisco-CA based Okta is a security company specializing in securing and consolidating the log-in process (aka SSO). Okta’s cloud-based software is designed to allow people to access applications on any device at any time, while still enforcing strong security protections. It integrates directly with an organization’s existing directories and identity systems, as well as 4,000+ applications.  Okta says that because it runs on an integrated platform, organizations can implement the service quickly at large scale and low total cost. The company has raised $230 million in venture funding from VCs such as Andreessen Horowitz, Greylock Partners, and Sequoia Capital.

How much are they worth and why?

$1.2 billion as of September, 2015.  Okta’s popularity has risen right alongside the growth of Cloud-based Services because of the service’s SSO capability across the most popular enterprise apps used by the Fortune 500.  Okta provides both the convenience and security of SSO with all the integration work done up front. The company claims to have thousands of customers, including Adobe, Allergan, Chiquita, LinkedIn, and Western Union. As of June, 2015 the company claims to have 3.4 million “identities” under management.  In a CIO article dated June of 2015, Okta said it was on track to make $100M in Revenue for 2015. The implied Sales multiple is approximately 12. As a benchmark, average revenue multiples in Internet for public companies is around 7.

Strengths

Integrations:  for most popular apps like Salesforce, Zendesk, ServiceNow, and Google Apps, they have worked the application API into their configuration to allow provisioning and de-provisioning directly to the application. New integrations are also extremely easy. For most configurations, it is as simple as selecting a configuration from their catalog, entering the SSO URLs and a couple configuration steps on the application side.

Team:  Okta was founded by Todd McKinnon, the former VP of Engineering of Salesforce. Investor Ben Horowitz (a former Cloud Services vendor himself) calls McKinnon “the ultimate domain expert on building cloud applications” and says that he “may also be the most astute engineering manager that [he’s] ever worked with.”

Weaknesses

Cloud Security Questions:  some say Cloud based services are more Secure while others maintain that the Cloud is inherently problematic. The debate between Cloud and on-premise software continues and Okta will always be reliant on how the discussion fares.

Opportunities

International Expansion:  Okta is domestically focused at the moment. By expanding into Europe and Asia the company could see Sales grow significantly.

Threats

Microsoft :  Okta has tried to counter the dominance of Microsoft by partnering with Microsoft’s most popular apps. Still many companies continue to rely on Microsoft for their Cloud User and Access Management.

Many other competitors:  Okta is a challenger along with many other startups including Centrify, Ping Indentity, OneLogin,  Symplified, iWelcome, SecureAuth and Telekom.

Note for our customers in Japan:  Okta has an office in Australia to service the APAC region but it doesn’t yet have an office in Japan.