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Okta Idea Proposal (OKTA)

Okta Idea Proposal (OKTA)

Will Okta’s customer identity management business be as big as its core workforce product?

Report Available: February 4, 2021


Blueshift’s initial research found growing demand for OKTA’s identity management technology as digital interactions increase and enterprises moves operations to the cloud. Its main business centers on managing security for employee access to work environments, but there is a lot of excitement around OKTA using similar technology for customer identity management. OKTA is considered a leader in ID management but the competitive dynamics on the customer side may be different than in the workforce market.



  1. Shares of OKTA, a developer of cloud-based identity management software, have doubled this year, briefly hitting record highs following the company’s Q3 earnings report on Dec 3. OKTA topped Wall Street estimates on both the top and bottom lines, with revenue growing 42% year-over-year to $217.4 million. OKTA is benefiting from multiple trends around the adoption of cloud computing, enterprise digital transformations, and a push toward “zero trust” IT security. The company added 450 customers in Q3 to push past 9,400 total, and now boasts more than 300 customers generating at least $500,000 in annual revenue. For the current fiscal year ending Jan. 31, the company is forecasting revenue growth of 40%, and executives predicted they will pass the $1 billion annual revenue milestone next year.
  2. OKTA has forged its reputation as a way for enterprise IT departments to seamlessly and securely manage employee access to company apps and databases. Its Workforce Identity software offers single sign-on and multi-factor authentication capabilities. Blueshift Research’s Tech Trends has been positive on OKTA, with top IT security sources reporting for almost two years that the company’s ID work access management is the best of breed for a remote work and cloud access world. Sources have cited a combination of CRWD with ID management software from OKTA as a nearly perfect way to work remotely with the cloud without the need to log into internal networks – obviating the need for multi-function firewalls in many cases.
  3. Investors are also intrigued by OKTA’s more nascent Customer Identity and Access Management (CIAM) technology. CIAM uses similar concepts as OKTA’s workforce product to manage customer logins across websites and apps with the aim of providing secure and frictionless access for consumers. Executives revealed in August that the company’s CIAM business had grown 72% year-over-year to reach a $200 million annual run rate and comprise 24% of OKTA’s overall business. The company’s CEO said this month that expanding the CIAM segment is a key part of its strategy: “Our future is about this dominant, first-class cloud all-around identity. And for us to do that successfully, customer identity is a big part of that. … We’re investing a ton in that opportunity.” Some of the major customers using OKTA’s CIAM solution include Major League Baseball, grocery retailer ACI, and MGM.
  4. Gartner listed OKTA as among the leaders in its most recent Magic Quadrant for Access Management, along with MSFT, PING, OneLogin, and ForgeRock. Analysts gave OKTA good scores for its product capabilities, expanded user and entity behavior analytics, and its ability to enable customers to orchestrate complex authentication and authorizations with a no-code approach. However, Gartner called OKTA’s CIAM scenarios “more simplistic than the competition,” noting that consent and preference management continues to be “very basic.” MSFT’s solutions in CIAM were also called “lacking,” while Auth0 was highlighted for its strong focus and specialization in CIAM, including support for AAPL’s new Sign-in With Apple (SiWA) authenticator. OKTA considers its neutrality to be a key selling point for enterprises whose employees need to access applications across various cloud environments like MSFT, GOOG/GOOGL, AMZN, and CRM. But it’s possible that the dynamics will be different on the customer identity side, where a company’s consumer-facing app or website is hosted in a single place, perhaps making the native tools from the big cloud providers more appealing.
  5. OKTA has rolled out a series of partnerships this year that it hopes will help build a flywheel effect. Its most recent is a deal with AMZN’s Amazon Web Services to make its products available on the AWS Marketplace, allowing OKTA to draw from a pool of over 300,000 developers and buyers around the world that use AWS. OKTA executives said they are the only identity management vendor that is part of AMZN’s efforts to improve its AWS Control Tower for customers with complicated cloud environments. Earlier this year, OKTA unveiled a partnership with CRWD, PFPT, and Netskope aimed at helping to secure remote work environments.


How big can OKTA’s CIAM segment get? How does pricing for CIAM compare to workforce ID management? How are IT security professionals thinking about budgets for customer identity tools? Does it make sense for enterprises to build customer identity management tools in-house? Will the big three cloud providers be a bigger obstacle for OKTA on the CIAM side than on the workforce segment? Will OKTA’s availability on AWS marketplaces have a big impact on sales? Are there upsell opportunities for OKTA once its CIAM product is deployed? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Enterprise CIOs and CISOs, OKTA channel partners, Competitor channel partners, and Industry specialists. 


Companies: Okta Inc. (OKTA), Inc. (AMZN), CrowdStrike Holdings Inc. (CRWD), Microsoft Corp. (MSFT), Ping Identity Holding Corp. (PING), Proofpoint Inc. (PFPT)


Research Begins: December 21, 2020


To see other ideas Blueshift Research is currently working on, please click here.


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