Okta Leads in IDaaS

A report by Gartner published in 2010 estimated the global identity and access management market to grow from $9.2 billion in 2009 to $11.9 billion by the end of the current year. Growth will be driven by the emergence of cloud-based identity management being offered as a service, or IDaaS. IDaaS is a growing need for both midsize and large enterprises, which must manage access to applications both in the cloud and on their on-premises legacy networks.

Okta’s Financials
San Francisco–based Okta is one player that is making it big in the identity and access management segment. Okta was founded by Salesforce.com veteran Todd McKinnon and Frederic Kerrest in 2008. Since then Okta has focused on developing access management solutions for the cloud. They provide enterprise-grade identity management service that help organizations address the needs of access management over the cloud and over the on-premise applications. Their tools integrate existing directories and identity systems available on-premises, on the cloud and as mobile applications to enable IT teams to securely manage access anywhere, anytime and from any device. Through their tools, organizations benefit from a single sign-on, secure authentication, provisioning, workflow, and built-in reporting.

Okta does not disclose their financials, but it is known that they have seen strong growth in the recent past. They charge a subscription fee per user based on the level of services selected by the enterprise. Their customer list includes more than 200 organizations, with more than 500,000 users. Last year alone, they added more than 140 customers and 300,000 end users.  Autotrader.com, Workday, Allergan, BMC Software, Groupon, Informatica, LinkedIn, Purolator, and SAP are just a few of their customers.

Okta has been venture funded and to date has received $52.3 million from investors that include Andreessen Horowitz, FLOODGATE, SV Angel, Maynard Webb, Dharmesh Shah, Stephen Marcus, Avid Larizadeh, Greylock Partners, Khosla Ventures, Ed Roberts, Tom Berson, Jacques and Sandra Kerrest and Sequoia Capital. Their latest round of funding helped them acquire $25 million from existing investors and also added Sequoia Capital to their investor list. Okta plans to use these funds for product expansion.

Salesforce.com Enters Okta’s market
Okta’s products are giving stiff competition to big players. Recently, Salesforce.com announced their plans to launch an identity management app to compete with Okta. Known as Salesforce Identity, the tool allows for a single sign-on log in for both cloud and mobile apps and also includes Salesforce’s social features such as integration with Chatter. Okta is not unduly worried about Salesforce’s entry into the domain as they believe that not only does their entry validate Okta’s business proposition, but it will also help improve their overall valuation. In addition, Okta is convinced that  identity management is just another product for Salesforce and not their core area of focus. As a result, Salesforce may not be able to make the kind of investments needed for successful competition. Okta must be proud of what they have achieved given that when they were in their initial stages, Salesforce’s Marc Benioff declined to be an angel investor in the organization.