Specialist
Former Senior Director at Okta Inc
Agenda
- Okta (NASDAQ: OKTA) and its IAM (identity and access management) security software solutions, highlighting segment positioning across workforce offerings, noting efforts in IGA (identity governance and administration and PAM (privileged access management), as well as CIAM (consumer identity and access management)
- Innovation and the potential impact of May 2021 Auth0 acquisition and decision regarding one or two platforms
- Competitive dynamics involving Microsoft (NASDAQ: MSFT) and smaller, emerging IAM industry participants, addressing passwordless offerings
- Varied risks, noting corporate governance, M&A activity and company culture
Questions
1.
Okta went public in April 2017 and has since become a USD 36bn market cap company. Could you describe Okta and how you think it has evolved? You said you were at the company pre-IPO, starting in 2014. How has it changed since then?
2.
How do you think Okta has been building out its offerings and capabilities in the enterprise segment, recently focusing on IGA [identity governance and administration] and PAM [privileged access management]? What are your thoughts on the Auth0 acquisition, which was intended to help build out the company’s CIAM [customer identity access management] initiative?
3.
You highlighted the distinctions between the enterprise and consumer offerings and potential confusion with Auth0 around the various platforms. How do you think Okta will proceed? It seems the more significant technology acquisitions of the last couple of years have been about acquiring a team and a technology and allowing it to remain independent. I don’t know if that’s necessarily aligned with the way that Okta thinks about the world and executes. How might that play out over the next 1-3 years?
4.
Do you think the considerations around the complexities of the Auth0 acquisition and how Okta approaches going with one or two platforms could lead to innovation challenges? Auth0 was a USD 6.5bn transaction that was an all-stock deal. It was a significant acquisition and could require a lot of management and employee attention and resources. It could cause some challenges. How do you think that deal impacts Okta’s ability to innovate? It seems it could be an impediment because managing the acquisition takes focus and resources away from innovation. It could also be said that Auth0 is itself an innovator and a developer oriented platform that could lead to more open-minded thinking.
5.
Many companies in and out of security, software and SaaS have talked about AI and machine learning for a number of years. Do you think that’s one way Okta can get around potential Auth0-related dual platform challenges? How else could the company employ AI and machine learning to provide better technology, a better user experience and a better solution set?
6.
I think people are surprised by how large the IAM segment is. Okta says in its 10k that its principal competitor is Microsoft. Many people might not be aware that Microsoft has Active Directory and a whole suite of IAM solutions. This aspect of Microsoft’s offering may be getting more attention due to comments around passwordless, where you mentioned it seems to want to take the lead. How do you think Microsoft and Okta and their respective solutions compare? Do you think Microsoft considers Okta’s Auth0 acquisition an opportunity? How might the two companies compete over the next 1-3 years?
7.
You mentioned on-prem, where Okta has not played historically as a cloud native, cloud-first security software company. There does seem to be an increasing focus on hybrid solutions, however. I just wonder if that’s a response to Microsoft and a way to expand Okta’s TAM. Why do you think Okta has been focusing on hybrid solutions and how likely is success there for the company? There is a lot of on-prem competition such as SailPoint, CyberArk, ForgeRock and Ping.
8.
What are your thoughts on passwordless and the competitive dynamics there? You mentioned a couple of start-ups – Stytch and Transmit Security – who are doing relatively well. Transmit Security raised a Series A in June 2021 and was valued at USD 2.2bn. Could those companies infringe upon what Okta is doing? Could Okta ever give up on passwordless and try to acquire one of these companies?
9.
You mentioned the changes in Okta’s culture over the four years between your first and second stints with the company. In 2021 it hired a new CTO, Chief Digital Officer, SVP of Worldwide Partners and Alliances, CMO and CRO. I assume some were driven by President of Worldwide Field Operations Susan St. Ledger, whose arrival from Splunk was announced in September 2020. What do all those additions mean? None of the people brought in were previously with Okta, so these are not promotions.
10.
How would you advise Okta CEO and Co-founder Todd McKinnon to improve the company’s culture and the overall morale of the employee base?
11.
What’s your 1-3-year outlook for Okta, including the company’s biggest risk?
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