Okta Charges Up Channel Program Around Cloud-Based Identity Management

Businesses migrating to Office 365, Microsoft's cloud-based productivity suite, are adopting stronger authentication and privilege management measures, according to security vendor Okta, which is adding support and incentives to its channel program to attract systems integrators and other cloud migration specialists.

San Francisco-based Okta said it is reaching out to Microsoft national system integrator partners to get its cloud-based identity management platform in front of businesses migrating systems to the cloud. The use of other subscription-based services, such as Salesforce.com for CRM, Workday for financial and HR requirements, and Jive for communication and collaboration tools, have prompted a look at single sign-on, said Bill Fitzgerald, vice president of channel sales at Okta.

"Regional partners are critical in helping clients adopt cloud-based apps and getting them quickly activated and creating a seamless experience for provisioning and single sign-on for on-premise and cloud apps," Fitzgerald said. "We're building a strong distributed partner ecosystem to take advantage of the interest in our fast-growing segment of the security market."

[Related: Channel Sees Identity Management Market In Flux]

Solution providers are also seeing growth in tying SaaS-based identity and access management platforms to solve client concerns over cloud migration projects. SaaS-based identity management vendors are continually adding functions to their platforms, said Tyson Kopczynski, a security solution principal at Slalom Consulting in San Francisco. The company's security practice is growing significantly with Okta, often getting coupled with other security products during the Office 365 or SharePoint migration process. Businesses are reducing the footprint of legacy, on-premise identity and access management platforms, Kopczynski said.

"It's definitely a good time to be in the space right now with all the major consulting firms investing heavily in it, because it's definitely something organizations are clamoring to solve," Kopczynsi said.

Okta is taking a hybrid sales approach with about 25 percent of deals going through channel partners globally, Fitzgerald said. It has 120 global partners and is adding regional channel managers as it grows out its ecosystem. The company recently unveiled a four-tier channel program that gives up to 30 percent net margins on sales and 10 percent on referral margins. Platinum, Gold and Silver partners gain access to MDF and phone and email access to technical support, Fitzgerald said.

Okta also is hiring a Microsoft channel sales lead to spearhead deals with Microsoft regional and national systems integrator partners, Fitzgerald said.

NEXT: SMB Adoption Driving Identity Management Market Growth, Says IDC

Research firm IDC projected that the identity and access management market would reach $4.8 billion in 2013 and predicts continued market growth, reaching $6.9 billion in 2017. Cloud and SaaS adoption over traditional IT software and services, primarily by small and midsize businesses, is driving much of the growth, said Pete Lindstrom, a research director for IDC's security products program. SMBs are a "sweet spot" for Okta and competitors Centrify, Covisint, Ping Identity, Symplified, and OneLogin, he said.

"For most folks, any reluctance to adopting cloud apps and services in the past because of security reasons is gone," Lindstrom said. "Some SMBs are outsourcing entire data centers into the cloud, but the bigger you get and more regulated you are, the less likely you are to invest in solely in cloud infrastructure."

Cloud outages are the most visible problem and a constant concern cited by business executives and IT teams when it comes to adoption, according to Lindstrom. Microsoft said its Office 365 service is the fastest-growing product in its history, selling at a $2.5 billion annual rate. But despite a track record of uptime the company experienced an outage to its Lync and Exchange services for a combined 13 hours over a two-day period at the end of June.

No organization can completely ignore migrating data to cloud providers, but customer contractual limitations and regulatory restrictions motivate some clients to keep core IT systems on-premise, said Slalom Consulting's Kopczynski, who predicts cloud-based identity platforms to grow more robust over time. Kopczynski said he has seen at least one case where persistent bandwidth issues and rising costs forced an organization to withdraw from a cloud service.

"The cloud doesn't have to be scary, but there are valid concerns that clients have to consider," Kopczynski said. "It's up to each individual client's risk tolerance and overall business strategy in determining what makes sense."

PUBLISHED JULY 7, 2014