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
When you are bigger, you get a courtesy call
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
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.”
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
“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
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’
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
“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.