- What does it feel like when all four of the largest cloud providers decide they want to compete with you?
- Okta Todd McKinnon says when you are tiny, they ignore you.
- When you are bigger, you get a courtesy call first.
In some ways, the tech industry is like a small town, where everyone who’s anyone knows each other and, sometimes, schemes behind each others’ backs.
Todd McKinnon, CEO of Okta and former head of engineering for Salesforce working directly for Salesforce CEO Marc Benioff, is one of the people in that “in” crowd. And, as the years have gone by, he’s been on the receiving end of much scheming.
The company that he cofounded, Okta, offers a cloud service that manages passwords and logins to other cloud services for corporate employees (known as “single sign on”).
Okta had a successful IPO earlier this year and knocked it out of the park with its first quarterly earnings. Okta’s Q1 revenue of $53 million was up 67% year-over-year, and above the $48 million expected by analysts. Okta now has nearly 4,000 customers and is winning big accounts, like Nordstrom’s and its 60,000 employees.
It turns out that kind of success has become irresistible for the big cloud companies. Years ago, when Okta was still small, Salesforce launched its own competitive service. Then Microsoft launched a competitor, and even went so far as to temporarily boot Okta from one of its big tech conferences. More recently, Google launched one, via an acquisition of a startup called Bitium in September.
And last week. Amazon finally launched one as well.
McKinnon has a humorous attitude toward all of this competition, he told Business Insider. First of all, he knows he’s come up in the world by the way his new competitors are treating him.
“You never like big guys coming into your market, but I feel like I’m making progress,” he said. “If you go back to 2012, Salesforce enters the single sign-on market, no one calls me. Marc [Benioff] didn’t call me, didn’t give me heads up. He announced the product on stage.”
- REUTERS/Baz Ratner
Flash forward another couple of years when Microsoft launched a competitor. McKinnon had known Microsoft CEO Satya Nadella for years, way before Nadella became CEO. Okta had turned heads when it was tiny because it was Andreeseen Horowitz’s first cloud company investment, picked by the VC’s namesake founder Ben Horowitz
“Satya had been to our office when we were 12 people. A year after that they entered the market and he doesn’t call me,” McKinnon said. “So I am proud because when Google bought Bitium recently, Diane Greene called me at least,” he said. Greene is the head of Google’s Cloud business.
“And with Amazon, it wasn’t Jeff [Bezos] and it wasn’t Andy Jassy, but at least the Amazon partnership guys at Amazon called me and gave me a heads up before they announced the product,” he chuckled.
But the news of Amazon entering the market was particularly scary because Okta’s investors have for years asked him what’s to stop Amazon from crushing Okta like a bug.
He explained to them that cloud “identity management,” which helps employees login from one cloud to the next, works well when it’s an independent service and not part of one of the big guys’ clouds.
And that means, in addition to competing with the big dogs, Okta also partners with them. His customers still use Okta to sign on to Salesforce and Microsoft Office more than any other apps. They also use it to sign onto Google Apps and Amazon Web Services.
“Every investor assumes they [Amazon] are going to be in every market and they are going to be successful in every market, which is not true,” he said.
For those that don’t believe him, he has two words “Fire phone,” aka Amazon’s failed smartphone product.