Posted on Thursday, Oct 4th 2018
According to a Tech Navio report published earlier this year, the global identity and access management (IAM) market is estimated to grow 13% annually over the next four years. The growth will be driven by the continuing adoption of Bring Your Own Devices (BYOD) in the workplace. The Americas were the biggest market for the industry and accounted for 41% of the share. However, as growth picks up in EMEA and the rest of the world, America’s market share is estimated to reduce 4% during the forecast period. Here is an interesting infographic from the report.
Billion Dollar Unicorn Okta, recently reported its second quarter results that surpassed market expectations. Revenues for the quarter increased 57% to $94.6 million, ahead of the market’s forecast of $84.7 million. It ended the quarter with a non GAAP net loss of $0.15 per share, compared with the Street’s forecast of a loss of $0.20 per share.
By segment, revenues from Subscription Services increased 59% over the year to $87.9 million and Professional Services grew 36% to $6.7 million.
For the current quarter, Okta forecast revenues of $96-$97 million with a net loss of $0.12-$0.11 per share. It expects to end the year with $372-$375 million in revenues and non-GAAP net loss per share of $0.48-$0.46. The Street was looking for revenues of $356.5 million and a net loss of $0.56 per share for the year.
Identity & Access Management Acquisitions
Earlier last quarter, Okta announced the acquisition of zero trust security firm ScaleFT for an undisclosed sum. ScaleFT was founded in 2015 by Jason Luce and Paul Querna. It provides an access management platform that enables secure remote access without a VPN. Its product was inspired by Google’s security system BeyondCorp. While traditional security products focus on protecting the network, ScaleFT’s product focuses on protecting devices and context. It essentially doesn’t trust anyone – not even those within the firewall.
Okta plans to integrate ScaleFT’s platform with its Identity Cloud to improve its contextual access management offering. Okta’s Identity Cloud already allows organizations to authenticate users without relying on passwords. ScaleFT’s addition will help strengthen that feature. ScaleFT has been privately held and its financials are not known. According to Crunchbase, the company had raised $2.8 million in seed round funding prior to the acquisition.
Besides acquisitions, Okta is also expanding through strategic tie-ups. This summer, it entered into an agreement with VMware. Through the tie-up, VMware Workspace ONE and Okta Identity Cloud solutions will be integrated to deliver secure enterprise cloud migration solutions and streamline IT management. Together, the two will enable validation of users, devices, applications, and network behaviors to drive secure cloud environments.
Interest in Okta has soared in the recent months given the acquisitions in the industry. Last quarter, Cisco announced the acquisition of privately held Duo Security for $2.35 billion. Cisco has really stirred the pot in the industry. Over the past few years, it has been slowly adding to its security portfolio. It bought intrusion detection tech firm Sourcefire in 2013, malware analyzing firm Threatgrid in 2014, domain name service provider OpenDNS and network monitor Lancope in 2015. Its latest buy, Ann Arbor, Michigan-based Duo Security was known for its unified access security and authentication products that were delivered to its customers over the cloud. Its products verify the identity of computer network users and check devices for malware before granting them access to applications. Prior to the acquisition, Duo Security had raised $121.5 million in funding and was valued at $1.8 billion. The acquisition will help Cisco deliver a more secure service and drive competition with Okta.
Do you think that Okta will manage to stand its own ground despite Cisco’s rising importance in the sector, or do you think Okta will be on a shopping list itself?
Its stock is currently trading at $68.10 with a market capitalization of $7.4 billion. It had touched a 52-week high of $75.49 earlier last month. It has been climbing from the 52-week low of $24.71 that it was trading at in December last year. Okta went public last year at a valuation of $1.54 billion. Prior to the listing, it had raised $228 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. Prior to the listing, the company was valued at $1.2 billion.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
This segment is a part in the series : Billion Dollar Unicorns
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