The growing adoption of the cloud by organizations is leading to the evolution of Identity Access Management-as-a-Service aka IDaaS. Gartner estimates the IDaaS market to account for nearly 25% of the overall Identity Access Management market, compared with a modest 4% share back in 2011. Gartner’s multiple reports peg the IDaaS market to be worth nearly $500 million in 2013 and expect it to grow to $1.24 billion by the year 2017. San Francisco-based Okta is a leading provider of IDaaS services and also the “sole leader in the IDaaS Magic Quadrant” as per Gartner.
Okta was founded in 2008 by Salesforce.com veterans Todd McKinnon and Frederic Kerrest. Ever since Todd started working, he realized that he wanted to have his own company. While working at Salesforce.com, Todd met several CIOs and realized that they were facing a pressing problem with the increasing cloud adoption. At most organizations, several of the on-premise solutions were moving to the cloud, but the CIOs were worried that none of the vendors were offering a solution to help the IT team securely manage all these applications on the cloud.
Soon, Todd quit his job and began developing the product. Okta initially started with the intention of assisting companies with reliability of services and SLA compliance. But they were not fixed on that idea. After several rounds of feedback sessions held with his previous contacts and potential customers, Todd realized that the product that the market needed would have to be focused on identity management. Todd redesigned his offering and pivoted toward this market need. He continued to get market feedback to improve the product. While working on his product, Todd met up with Frederic, and the two connected to build Okta together.
Today, Okta is an integrated identity management and mobility management service that helps connect people with their applications through any device, from anywhere, securely, and easily. Their solution is delivered in the cloud but allows for identity access management for both in-premise and cloud applications. Their platform allows the IT teams to ensure security. Similarly, product development teams are able to deploy Okta to seamlessly authenticate, federate, manage, and secure users, thus leading to a faster time-to-market for apps and products.
Okta does not disclose its financials, but claims to have seen rapid growth. Revenues have grown 250% over the year in 2013 and were estimated to grow 200% in 2014. Back in 2013, the company was expecting to break even within two years. They have more than 2,000 customers, including Adobe, Chiquita, LinkedIn, MGM Resorts International, and Western Union.
They have been venture funded so far with $155 million from investors including Altimeter Capital, Janus Capital Group, Khosla Ventures, Greylock Partners, Andreessen Horowitz, Sequoia Capital, FLOODGATE, SV Angel, Maynard Webb, Dharmesh Shah, Stephen Marcus, Avid Larizadeh, Ed Roberts, Tom Berson, and Jacques & Sandra Kerrest. Their last round of funding was held in June 2014 when they raised $75 million. Analysts estimate that their valuation has increased from $250 million in an earlier round to $600 million in the latest round.
Okta realizes that the competition in the space is heating up with giants like Salesforce.com and Microsoft entering the market. They plan to address the competition by beefing up products and market presence. They are already investing heavily in market expansion in the Asia Pacific region. Additionally, they are planning to continue to update the number of applications that come pre-integrated with Okta. They plan to take the number of apps from 3,000 to 10,000.
This segment is a part in the series : Carnival in the Cloud