Okta, Inc. (OKTA) Earnings Call Transcript & Summary

Good morning, everyone. My name is Joel Fishbein from Truist Securities. I want to welcome you to the Truist Tech Conference 2021. Before we begin, I need to read the following disclaimer. This call is arranged by Truist Securities Research for -- used by institutional investors and issuer clients as defined by FINRA. If you are not an institutional investor or an issuer, please disconnect at this time. For required disclosures, please see our website at truistsecurities.com or our equity research library. On today's call, we have Freddy Kerrest, Executive Vice Chairman, COO and Co-Founder of Okta; and Dave Gennarelli, who runs Investor Relations there. Many of you are familiar with both. Kerrest, the Executive Vice Chairman, and obviously, a Co-founder. He's responsible day-to-day operations. He's got a long history of being in the tech world. He started one of the main places that he's worked with Salesforce.com, helping grow that business pretty significantly. He serves as a mentor at the MIT Trust Center for Entrepreneurship and the Stanford StartX accelerator program. And Freddy, thanks for joining us, and we're honored to have you here today and talk about Okta.

Oh, I'm thrilled to be here. Thank you very much. I really appreciate it.

You're coming off a great quarter, just to highlight a couple of the fourth quarter financials. Total RPO, it grew 49%. Revenue was up 40%. Subscription revenue grew 42%. You generated $32 million in free cash flow. So you're not just -- now you're putting the pennies to the bottom line. You added 170 customers with an ACV of greater than $100,000. And nearly half of these additions were new customers. So you guys, I think, are firing on all cylinders, not to say you also did that very interesting acquisition, which we'll get to in a little bit. But talk about the market dynamic, what's going on? Obviously, people know digital transformation is a back driver. COVID's been potentially an accelerator on the business. What's really going on? And I'm really interested, Freddy from the legacy perspective. There's a lot of legacy providers out there that are -- and a lot of companies that have invested a lot in identity. For example, the company that currently work with probably has 20 different identity vendors. Each application has their own identity solution. So talk to me about the backdrop or talk to us about the backdrop and what's going on.

Yes. Wow, that's a lot of questions all in one. I'll see what I can do. Thanks a lot for having me, Joel. I'm really excited to be here. It's a pleasure. Look, as you said, coming off Q4, very strong financial results, we're very happy about that. For FY '21, the year that we just ended with revenue, $835 million, grew 43% year-over-year. Subscription revenue grew 44% year-over-year. We now have RPO that grew 49% year-over-year to $1.8 billion. So certainly, the business, like you said, is firing on all cylinders. For those who are not intimately familiar with our business, we've been doing this for 12 years. From time to time, I need to remember that not everyone spends every waking second of their live focused on Okta like I do. So our business is focused, like you said, on enterprise identity management, there's 2 core components to the business. The first one is workforce identity access management. So that's traditional enterprise identity management, helping employees better manage for their or companies better manage identity access for their employees, their contractors, their consultants. It's a big business. When we went public 4 years ago, it was about an $18 billion TAM. I think it's about $30 billion now. That's about 75% of our revenue. So it's a really nice business, growing 40% plus year-over-year. And the dynamics in that business are everyone just moving to more hybrid cloud. Everyone's trying to adopt all these modern technology solutions and obviously, large organizations like Truist, have a lot of legacy on premise infrastructure. You've been around for a few years, you have some IBMs, some CA some Oracle, some RSA. And as we know what enterprise IT likes to do is buy new things and gloom on the front. So we just think about how we can better enable organizations of all shapes and sizes to adopt these modern cloud and hybrid IT solutions and integrate them into what they're doing. The second part of the business customer identity and access management. And that's -- it's gone from 0, we estimated -- we didn't really have a TAM size of it when we went public 4 years ago today, we think it's about $25 billion of TAM. That's about 25% of our business organically today, growing 50%, 60%, 70% year-over-year, depending on the quarter and depending on the size of customers coming in. So again, a really nice business where we're just really getting started. Digital transformation, most of our used term in the world, but what it really means is just everyone's got to find a better way to interact with their customers, partners, vendors, suppliers. Certainly, we saw the acceleration in e-commerce. Commerce is a percentage of -- e-commerce as a percentage of commerce in North America, I think from 2010 to January 2020, went from like 6% to 16%. And then it went from 16% to 27% in the first 9 months of last year alone, obviously, in the pandemic. So people are really focused on how they're going to provide a much better online purchasing and customer experience and then how they're going to integrate that into multichannel, so that when you come into the store, you have that exact same experience as you did online. And that's a huge accelerant to the business. The challenge is, obviously, that everyone's got a shortage of developers. No one has all the developers they need. And we're trying to make it easier and easier for people to just take identity off-the-shelf and put it inside their applications. Look, when we started the business 12 years ago, if you told me that today, Todd and I would still be running it with 3,000 employees, 10,000 customers and $1 billion revenue run rate business, growing 40%, I would have taken it in a heartbeat certainly in the last 3, 4 years as a public company, have been very exciting. But when I kind of look at where I am today and what's going to happen in the next 3, 5, 10 years, I think it's going to be way more interesting. And I kind of feel like it's a quite small business now compared to what it's going to be, which is kind of funny. Finally, you mentioned Auth0. We're very excited about that. Obviously, we announced a definitive agreement to acquire them at earnings last week. That's just going to be a great addition. Auth0 is a fantastic company, also focused on customer identity access management like us. But we have a very tops-down approach to how we go into the market. Our stack and infrastructure is really focused on heavy-duty compliance, things like FedRAMP moderate today going to IL-4 and FedRAMP high so that we can really address a lot of the DoD and the government opportunities. It's HIPAA compliant so that everyone in health care and dealing with patient information is very comfortable putting their information in our [ servers ]. Whereas if you look at Auth0, an awesome platform they've built, the 2 founders, Eugenio and Matias are phenomenal people. We've known them for a long time. I was looking back at my records. People were like, oh, you just did this deal over the weekend. The first picture I have at Eugenio and Todd having dinner was in 2015. So we've been working on this for literally 6 years. It's a great organization. They've done a great job of being really a developer's up motion. The same way people talk about Twilio is easy for developers with messaging and Stripe is easy for developers with payments. I think Auth0 is #1 when it comes to developers for identity, and that's going to be a huge opportunity in the future. So yes, we're very excited about. Just about double the size of that business for us. They're growth accretive, growing faster than we are. So yes, it's going to be a lot of fun. Obviously, we've got to get through the DOJ and all the rest of it to close the deal successfully in Q2. But very optimistic about that. And I think it's going to be a huge boon for customers. It's just going to accelerate what we can really help all these organizations do as they're trying to modernize all their infrastructure so.

Okay. Well, I got lots of follow-ups. So the first thing is, one of the, I think, biggest misconceptions about Okta is that you're only doing cloud applications, right? There's all these legacy applications or whatever. Can you talk about -- and the second question is sort of tying it up. And let's talk about that first, right? So there's all these legacy applications in the -- no, Okta is the authentication identity play for cloud applications. Tell us why that's not really the case. And maybe you can give us a couple of use cases that really explains that.

No, that is the case, actually, Joel. We just do the cloud. I'm kidding, okay. So look, I think that what people -- yes, absolutely happy to talk about that. Obviously, that is a misconception. I need to do a better job of explaining to the world. So when people think about enterprise software today, there are so many headlines about cloud-based, cloud that, cloud, cloud, cloud. Everyone thinks it's like, okay, we're all done. The cloud is here, here we go. Just look at the data on what's happened between in the last decade. Enterprise IT has gone from about $3.2 billion to about almost $4 trillion of annual spend. Enterprise software has gone from $220 million to about $500 billion of spend. So that's 2x over that time, which is pretty good. Enterprise cloud has gone from like $7 billion to about $120 billion. So that's like 12x. That's phenomenal growth. But then just look at the ratios, right? Enterprise cloud is still only 20%, 25% of all enterprise IT spend today, first of all, and it's 3% of all enterprise -- or sorry, it's all it's about 20% of all enterprise software spend today. It's about 3% of enterprise IT spend. So that means that $0.80 of every dollar that enterprises are going to spend this year on software, is it all going to be spent on-premise software. Downloading, managing, maintaining, upgrading, installing legacy software. So people like, oh, how is it possible? The clouds at maturity, here we go. It's like, no, we're in that -- I mean, I don't even like baseball. I think it's a boring, but I think we're in like the first or second inning of a baseball game when it comes to cloud transformation. Now I don't think that everyone is going to put everything in the public cloud. Look, Truist is never going to put their proprietary trading system in the public cloud. But because it's core to your business, but all the context stuff, all the stuff around collaboration and e-mail and financials and HR, things that are not sustainable competitive differentiators on how well you run your business, they should not be run by Truist. They should run -- be run by organizations that do this at scale. And so when you roll the clock forward, a few years from now, there's going to be half a dozen enterprise clouds. There's going to be one around collaboration for email. There's getting one around CRM, our friends at Salesforce. It's going to be one around HR and financials that work today, there's going to be one for IT assembly service now. And there's going to be one that's around identity. And we're on our way to building that. But like you said, just look at the data, if we don't focus and enable our large enterprise organizations, use all their on-prem infrastructure, like we're only able to address 20% of the problem. And as you said, you have so many on-prem identity management systems today, that wouldn't be helpful. So yes, like you said, 3, 4 years ago, I would go talk to my favorite customers, and they would say, Frederic, I love you, but the impression is it's just for cloud. And when I turn around to my organization, they'll be like yes, the Okta thing will we find for the cloud, but it's not going to help on-prem. So a few years ago, we built a product that has done very well, it's called Okta Access Gateway and we GA-ed, I think, 2 years ago. And now all of our large enterprise customers are using it. You go down the list, American Express and FedEx and Nike and John Deere and Phillips66 and whoever else you want. And what it is, it's a very simple appliance that people can put into their infrastructure. It's a great modern version of getting rid of all that CA SiteMinder and Ping Identity legacy infrastructure that people have. And it allows you to do -- I'll get a little techy on you, I know you're a techy at heart. It allows you to do web authentication, web access management and header-based authentication. So you'll hear about WAM. It's a WAM replacement. And it allows you to basically connect all of your on-prem infrastructure, like you said, to all the cloud stuff so that you can take advantage of all the on-prem infrastructure investments you made, the custom code that you developed and still use the brains of the Okta service that are sitting in the public cloud. That product has gone very well, it's easy to deploy. It's easy to get up and running. There's hundreds of installments now in the largest organizations in the world. So it's really kind of started to take away that perception. But like you said, we have more work to do. But look, over time, naturally, these things are just going to migrate more and more to the cloud. And as people put more things in the cloud, they get more comfortable, putting identity in the cloud. By the way, every time we have one of these unfortunate periodic security events. Well, first of all, the global pandemic certainly accelerated that. People realized they can't get into their data centers, they can't physically go see the software, number one; number two, like their VPNs were falling to their needs because they were set up to do 10% or 20% of their workforce. And instantly they sent 80% of their workforce home in a lot of situations. So that's number one. And then number two, unfortunately, you have a lot of these sad periodic security events. We had SolarWinds happen in November, December. Just last week, basically, everyone was an on-prem exchange to everyone who is left with an on-prem exchange server has now decided they need to figure out how to go to Office 365 as quickly as possible. And if you've got all your e-mail, calendaring and core collaboration information in the cloud, you know it's time to put all of your core identity there. So that's naturally going to go. But look, we're very pragmatic. It's workforce identity management is a $30 billion a year spend, and our business is not even $1 billion yet. So we can sit here and wave the success flag all day long. We're 2.5% penetrated. Maybe I should jack all of our reps quotas again, just want to get off these calls, making me feel that way. So -- but what I do is, look, we don't go in there with some approach. I talked yesterday morning for the first time to the CIO of a Fortune 30 customer of ours, we had traditionally worked with the Chief Security Officer, the Chief Technology Officer and his organization, and they're starting to spend enough money that he said, "You know what? I want to get on the phone and talk to Frederic." So I talked to him yesterday for like 30 minutes. And I said -- I said, "Look, my business is not about showing up here and telling you that it's going to be some rip and replaced forklift upgrade program on Oracle and IBM. You're going to pay maybe $25 million. I'm going to show you no value for 2 years. That's not the plan." The plan is, the reason we're having this conversation is because over the last couple of years, I started helping your different groups with like some core strategic initiatives they have. Sometimes it's around workforce, so enterprise IT, sometimes it's about modernizing your digital experience for your customers, which is revenue, right? It's customer-facing, revenue facing top line focus so you got to get it out the door quickly. Otherwise, your competitors are going to do it. And when you've done enough of these projects with your team and everyone is so excited about it, but now you want to talk to me, and that's how we go about our business. Now I've earned the right with this particular CIO to say, okay, let's talk about what the plan is over the next 24 or 36 months to turn the lights off on all your on-prem infrastructure for Oracle, for IBM for CA slowly, but surely, we're going to get through that. And at the end of the day, you guys are going to be paying us $5 million $10 million a year. As they probably should be paying now, so I should -- again, probably put a new rep on it. But the point is, there's just a lot of these opportunities and it's going to be slow and steady. It's get -- sorry, slow and steady growing 43% year-over-year in a pandemic. That's what I mean by slow and steady. Over the next decade, and it's going to be a great opportunity. So yes, we're very excited about it. We're very pragmatic people. We don't have this approach where it's like cloud, cloud, cloud. If you go tell some Fortune 200 CIO that the world's all cloud, they'll laugh at you. I mean they'll throw you out the doors. You have to be able to manage in these hybrid infrastructure environments. And I think we're starting to do that better and better. But based on your question, I still got a lot of work to do to convince people it's a reality, so.

Well, you answered about 10 of my questions going forward anyway.

I try and do that. We want to cut these interviews short, right, Joel, [ there's nothing wrong with it. ]

The most interesting thing is, it's funny that you refer to yourself as Frederic. I guess you used when you're talking for Fortune 500 customers and everybody...

Freddy to my friends Joel. They're not all my friends like you, man, they've got to earn that right.

This is Frederic coming to the meeting today. Anyway, no, so you hit on the other topic that I think that and I think you've brushed it alongside, but I want to dig a little bit deeper on this. Let's just say you guys are put out publicly. The market is $55 billion, I tend to agree with you. If you add up the CAs, the IBMs and all these solutions out there or whatever, but let's just even cut that in half just for the sake of argument.

Sure.

Right. You're still 4% penetrated. And I think that one of the things that I get back is, oh, well, they've already had their run. They've already had that they're -- they've already it's all the goods been had. And you've already talked -- so you talked a little bit about some of these things. Give us a couple of use cases, you don't have to name the customer where people have gone all in on Okta and then what that's done from a revenue perspective in terms of ex dollars for 1 solution and then an all-in solution in terms of how big that opportunity is.

Yes, sure. Absolutely. Happy to do that. Well, I mean, the first thing is, like I said, if you give me the stats of where the company is today, I would have taken them in a heartbeat. Look, the 3 -- we have 10,000 customers, which is awesome. It's 3x the base at IPO. we had -- we just -- last quarter, added a record 170 customers paying us over $100,000 a year ACV, nearly half of those were new customers. Now we've got almost 2,000 customers that are paying us $100,000 a more a year. That's about 80% of total ACV. So we're starting to get there. For last year, we added 2,000 customers. But it's still just 10,000 customers. This opportunity is an opportunity that addresses every organization of any size, public or private, government or private industry everywhere in the world. I mean that is hundreds and thousands of accounts. I'm almost embarrassed to say we only have 10,000 customers now, first of all. So every company should have an opportunity to take advantage of modern technology and move their business forward using Okta. I don't know how many accounts is that? 500,000, 1 million. So when I talk -- when we talk about account penetration and where we're going, it's like there is so much opportunity. The business is only -- it's still only 16% outside North America. As a half French guy, I'm embarrassed by that. Glad that the French team did well last year, I really would have had problems. But like talk about Auth0 again, they're 40% international. That alone allows us to like kind of keep pushing that envelope. We haven't talked about our new leadership, which I'm sure you have questions about. Susan St. Ledger, our new President of go-to-market, she just started last month. I've known Susan forever, she's awesome. I've been trying to recruit her for 5 years. One of the things she's amazing -- she's amazing in many things. One of the things is she has international purview. She understands what large account penetration looks like. She's going to transform our named and global accounts programs. She's going to make sure that we're actually doing great business throughout Asia, including Japan, throughout Europe, including Southern Europe, just so many other opportunities that we haven't even started to take advantage of when it comes to logos and new accounts like, first of all, so that's the first thing. Second thing is, if I even look at -- everyone's always like, well, aren't you fully penetrated on your accounts? Can't you sell them anything? Is there anything else you can sell? Yes, there's a ton where we can sell them. I wish we were fully penetrated the business would be like 5x the size. People are going to be like, oh, so they're 20% penetrated. I don't know what the exact number is. The point is we can multiply the business by some factor right now by having all of our existing customers use all of our products today. So there are so many expansion vectors when it comes to workforce that are upselling themselves to new versions of the product, right? We've got things like single sign-on that we've got an advanced version. Multifactor authentication, we have an advanced version. We've got these new products like Advanced Server Access, our new Workflows product, last year it was selling like hot cakes. I mean it beat all of our internal records. We talked about our Okta Access Gateway. Our Advanced Server Access product is starting to get us into the PAM market. So I mean these are just expansions within that workforce category. In SIEM, we are just getting started. We talked about the numbers, we're even less penetrated there, it's 1% or 2% or 3%. Fine, cut the TAM in 3%, We're still 7% penetrated. I mean, it doesn't matter. And these numbers are all growing 20% year-over-year. So we're talking about giant markets that are growing fast, where the competition is IBM, CA and Oracle, really. And on the SIEM side, it's build your own. So the better I can do by providing solutions "out of the box" that customers can use to implement inside their services, the better off we're all going to be, and that's what our job is. So yes, you want to talk about specific deployments, I mean, we can talk about some very successful customers that we've been fortunate to work with for years. I mean I think that one of the things I'm very proud of is that when we started doing our first public earnings, we always -- we started the first couple of times, and now we do it every time, putting out these press releases about customer go lives. It's not just about selling new software, it's about customers getting live and happy and successful with our solutions. A great example is last year, the May earnings call, right, right in the throes at the beginning of the pandemic. People don't know what's going on. We put out a go-live with FedEx. And Gene Sun the CISO there, who's a great guy. I talked to him in like February. And I said, "Hey, Gene, we start FedEx side as a customer, I think the summer before, right? So summer of '19. So I was the executive sponsor, so I went down to Memphis, Tennessee. I worked on the FedEx account a whole bunch, stayed very close to them. I called Gene in like late January, early February, I said, how is it going for our planned deployment in May or June. He said, it's going great, no problem. Everything is on track. Yes, sure enough. He called me in early March, he was like new plan. We need to go live with 85,000 employees on 250 apps in 3 weeks from now. And I was like -- or next week or 2 weeks now, yes, Gene. Okay, cool. Like Okta can do that is FedEx up for it. He's like, absolutely. That was great. So we did that. And then I called them back in -- I was in close touch with them throughout Mach and April, I said, okay, it looks like things are up and running, how is it going? He's like, that was amazing. So I said, look, can you do me a favor? Can we put out a press release in May at my earnings saying that you had to put 85,000 employees live on 250 apps, I had to do it like 2 weeks and it was a good experience. He's like, absolutely, because it's 1 thing for me to sit here and tell you how amazing we are. My wife is a doctor, she always tells me, look, it's 1 thing for her to tell patients how great she is. It's a lot better when the patient tells the other patient, what a great doctor she is. Customers hate it when I use that analogy. I'm like, you're not a patient take it easy, but you understand the point.

No, I have to -- I understand the point.

Hang on, hang on. I was going to give you an example.

But I just want to know, is FedEx all in on Okta.

They are -- right now, we are the enterprise identity standard for FedEx across their workforce. So they are going from 85,000. They've expanded out to a couple of hundred thousand. I think -- I was talking to Gene 2 weeks ago, if I get my numbers right, I think they have about 500,000 employees all in. So we're talking about the expansion across that. And we are just now opening the conversations with them around customer identity and access management because it's now time for Fedex.com refresh. I think the customer already pays us millions and millions of dollars a year. So there's a lot of opportunity inside these large organizations, I mean, that's -- I don't know what the percent penetrated is, but it's not big. Like there's so much more we can do with them. There's a ton of these good examples. Another good one is NTT Data, right? NTT Data is a huge customer of ours. They started with a bunch of different groups. NTT is a conglomeration of something like 200 different companies under one umbrella. So they've got all these different complicated identity and access management combinations where it's like sometimes, they'll be able to use a centralized version. Sometimes they won't -- they want to set up their own enterprise identity standard internally so that they can actually manage identities across the entire -- across the entire lifespan. So that's something we worked very closely with them. And so now what you see is NTT Data has now -- this is a trusted global innovator across the world, they started with us in 2018, deploying Okta's workforce identity products to provide access, I think it was like 130,000 employees. Then they said, okay, we need to create our own modern identity solution to unify all of our customers. They then deployed the Okta Identity Engine and our workflows product that I just talked about. So now they can automate processes for all the JML, joiner-mover-leavers. When employees join the company, they move and they leave to make sure that the right people access the right applications at the right time. And then as they change jobs, those applications change, reducing the time, reducing costs associated with all those manual processes, I mean, they have now standardized on it. You talked to Steve Williams, the Chief Security Officer of NTT Data. And I will tell you, he's like, look, this has become the enterprise-wide standard for us across all of our properties around the world, when they buy a new organization or they spin one-off, it's very easy to do that because they're using the flexible M&A framework we have built inside the applications. So you've got all sorts of use cases I could walk you through in terms of large organizations that are thinking about how they're going to do these standardizations. T-Mobile is another great one we can talk about Hitachi. So yes, I mean, there's a lot of really good examples of this.

All right. Well, thank you for that. So lots of -- you acquired probably 1 of the crown jewels in the identity space. There's a few others that are out there from a public perspective. You've garnered a lot of the market. I just want to touch on quickly. The barriers to entry and the competitive differentiator that makes -- is going to make this really hard. Obviously, if there's going to be other competitors in the space. But what's going to make this really hard for them to become anywhere close to the dominant position that you guys have already established in the space alongside of Microsoft, right?

So -- yes, sure. So I mean, there's a few buckets of competitors. The first 1 is -- well, let's talk about it. First of all, Microsoft, you brought them up. So Microsoft has this historical perspective where they should be the ones in charge because they created Active Directory, which was the legacy identity infrastructure when everyone had on-prem 4 walls of the firewall and VPN token to get into your building, number one. Number two, when Microsoft ran the operating systems on your laptops, and there was not this thing as a mobile phone, then everything was Microsoft made a lot of sense, and they also ran your exchange server. So it was -- and your printer servers and everything else. So that environment 20 years ago was absolutely there to win. What happened, obviously, is there's been a lot of change, right? No one is -- I talked to 0 CIOs these days. Who are in these homogeneous environments they were in 15 years ago, where they were an IBM shop or an Oracle shop or an SAP shop or a CA shop. That doesn't exist anymore. Everyone is looking for this best-of-breed infrastructure. They're looking to adopt the best cloud solutions for sales and collaboration and finance and HR and all these other things. So that's the first thing. So we do compete with Microsoft. Largely, we'd see them in the SMB. Sometimes they show up in the mid-market, but no one in large enterprise is going to standardize on E5 licenses. I mean what's Microsoft's horse to ride, their horse to ride is Office, right? They need to make sure that the Office solution works in the cloud. And it works well. I mean, I use it. But we are the #1 provider for Office 365 and as an identity provider, as rated by Microsoft Enterprise customers on the Microsoft websites. So even for their #1 e-mail collaboration suite, which they're pushing everyone to, we are the preferred identity vendor. And that's true across everything else. Of course, Microsoft is not going to spend any time connecting you to your AWS stuff and your Google stuff and your IBM stuff and your Salesforce stuff because that's who they compete with. So I think that the independence and neutrality plays out very well there, and it proves itself in the market. We've done very well. We continue very well. People told me since 2012 that Microsoft is going to beat us. So maybe this will be the year we'll see, but so far, so good. And we continue -- we're paranoid people. We pay very close attention, but we have 3,000 people and all we do is identity, and we're very focused on it. And this is going to be a 5,000, 10,000 person company. Not too long from now, and it's going to continue to rip, and there's a lot of opportunities for us to help, and we are only focused on identity. We have 7,000 pieces of technology that are pre-integrated into our infrastructure. And those are the kinds of solutions and partners that forward thinking IT leaders want for the future. So Microsoft is the company that we always think about. We always focus on. We've done very well. We continue to do very well. I think we're out innovating them. We're out executing them. But yes, we are very focused on them. And when I walk into accounts with reps, I said you're going to talk about Microsoft, they're like, oh, I'm not sure I'm worried about it. What are you worried about? Bring it up front and central, let's have the conversation. Let's talk to the executive about what their approach is. So that's gone very well. The other competitors are IBM, Oracle CA, RSA, but we're not competing against them in renewals, right? We are competing against their maintenance streams and slowly, but surely, we're going to eat that business over the next 5, 10 years. So it's going to go very well. So that's fine. And then when it comes to -- that's large -- these things are largely, by the way, on the workforce side. I should break out the business. There are some other point solutions there are other adjacencies next to identity that we will be getting into things like governance at IGA, governance to [ access station ] things like privileged access management, you're going to see us really start to make moves in there. Today, we have good partnerships with the legacy banners, SailPoint, is on-premises, CyberArk on-premises. They do fine in this legacy environment where people don't want to modernize and they don't want to move to the cloud and they want to stay inside their data centers. But I think that's becoming the strict minority at this point. So we have good partnerships with them where it makes sense. And Phillips66 still uses SailPoint, and we'll integrate to it. But for all the modern solutions, that goes very well. On the customer identity and access management side, the competitive dynamics are completely different. I mean, this hasn't been -- workforce has been budgeted line items for 30 years. I mean you could call any CIO and say, "Hey, how much are you spend on identity access management, they can go find a CA SiteMinder minor line item, say, is spending $2 million. I mean it was very clear. The challenge on the customer identity and access management side as Jeff Lawson said in his new book, Ask Your Developer, he says, it's not build versus buy, it's build versus die. And I mean, that's a little bit self-serving because obviously, he wants everyone to use the Twilio service, they wants everyone to really push their developers front and center. But developers are -- I mean, they have taken a primary seat when it comes to IT infrastructure today. And the same is true on the customer IT access management side. Our competition is basically people who've been building their own in the past. And so we just have to do a better job of explaining to them how they can very easily use the Okta service once we get the transaction across the line for Auth0, once they'll be able to use the Auth0 and Okta services combined to bring all these solutions to market. And remember, it's in a line of revenue, they've got to do it quickly, and they got to do it well. And it's got to be secured. No one wants to be on the front page of The Wall Street Journal for all the wrong reasons, right? So I think these are -- there are big opportunities. Look, when you have markets, there are tens of billions of dollars, other people are going to pay attention as the well they should. I think they're right. I think they're great markets. But we're going to continue to focus. We're going to continue to innovate. We're fortunate. We have this leadership position because of all the success we've had with our customers. But it's incumbent upon us to keep executing, keep focusing, keep innovating for them and working closely with them and make them successful. So that's great.

So there's 5 minutes. I have a bunch more questions. I'm going to try to get them quick.

Try and talk faster.

Okta Integration Network is 1 of the things that I think is a very big competitive differentiator for you guys. That's the way that I at least view it. Is that the right view and tell me why?

Yes, absolutely. So I mean, historically, right, in identity management, people have had to build all their own connectors and then manage and maintain them, upgrade them. The big difference in what we did. And when we started this business 10 years, ago, everyone said -- 12 years ago, everyone said don't do that, it's identity management. It's a bad industry, it's littered with failed deployments. And one of the big problems was the technology approach. Now we were able to do as a cloud service, which means we have the centralized catalog, as you mentioned, the Okta integration network, which connects today, 7,000 pieces of technology. So if you're a new customer, you don't have to build the integration to Palo Alto Networks, you don't have to build the integration to F5 or any of the 17 BPM providers, we haven't built in. We upgrade it, we manage it, we maintain it for you. And it's no code, drag and drop, push and pull, you see exactly how it works, whether the same is true with workflows now. Now, also you can start to do all these triggers and events, which allows really the IT infrastructure people in your company to take a step-up and provide much more business value-add to the business, not just keeping the lights blinking on a server. We do that for people now, and that is a huge advantage, as you said.

All right. So Auth0, we touched on it a little bit. They were rumored to be getting ready to go public. They obviously have done extremely well. I know the management team there well, and I think they're like you said, like very complementary or whatever and accelerate your entry or -- I'm sorry, your further expansion in the SIEM market. The question there is, obviously, you paid a good price for it, a healthy price for it. Do you have any overlap in terms of customers? And then the second thing was in terms of the price paid, were there any other competitive bidders in this space? I mean I know you guys went back and said you had a long history with them. I remember Todd bringing this up -- them up to me a while. So love to just...

Yes, I'll actually flip the question. So first on the price, I mean, we paid less than our forward multiple for a company that's growing faster than we are, is they're going to -- they're on track to do north of $200 million in ARR this year. And as you said, they're getting ready to go public. So it seems like a pretty good deal. They're growth accretive day 1 for less than our own forward multiple. And people have to realize, they're saying, well, you paid a lot. If this company gone public, everyone would be more than happy to value them. It's somewhere between us and whatever, snowflake or whatever the latest one is. So I think it's a fantastic opportunity for us in terms of like where we're going. It basically doubles the size of our SIEM business more or less overnight. So it's going to be really, really good for customers because now they're going to have all the added innovation. Look, one of the challenges -- and I know because they used to be a private company, is when you are a public company, large organizations are much more comfortable doing business with you. I want to argue that there's going to be a ton of opportunity where companies are going to say, great, now I can finally buy the Auth0 service, it's part of a public company with audited financials and all the rest of it. So I think that's going to be great. In terms of overlap, I mean they're -- obviously, they're -- and I should just highlight, this is the other leading cloud platform we bought. It's not like we bought a bunch of legacy on-premise infrastructure, it's not like we went out and bought ForgeRock, and I now have to manage legacy on-prem infrastructure in addition to the cloud service. We bought the other leading cloud service. So if you're a forward-thinking C leader out there, you're like, oh wow, I want to buy more solution, one of the leading clouds, great. Well, we've got them. So, like what flavor do you want? So you got to remember that, taking a step back, it's like it is a perfect symbiotic fit in terms of their delivery mechanism, their approach to the market. In terms of overlap, yes, I mean, at a high level, we're both in the SIEM market, but their service is very flexible, very open, very adaptable, loved by developers. If you want to componentize it, you want to put very large consumer-facing properties on it, very easy to get up and running. Ours is a little more designed to heavy industry regulation, security compliance; not that theirs is not, but it's just a little bit of a different philosophy going into it. So it's very complementary. Over time, we're going to integrate, so you can have the best of both platforms. We're going to heavily invest -- we're going to continue to heavily invest in both the product platforms, the companies. They're going to run as an independent unit inside Okta, Eugenio is going to report directly to Todd. It's going to be great. It's going to be a marriage made in heaven for customers, and yes, we're thrilled about it.

So we're bouncing up against our time, but I got asked this last question. Give me the benchmarks, the milestones, how we should think about Okta's business, '21 and beyond. What are the 3 things that we should look at? And don't -- I'm not looking for like revenue or any of that stuff, I mean, what are the benchmarks? What's the vision?

Well, the vision is how we're going to help organizations set the standard for identity on the Internet. I mean, that is a vision is going to take 3, 5, 10 years to even start going on. There's all of this workforce businesses, all this customer business, the consumer challenge is still too high, right? The problems that you and I have at home are still a nightmare. We got to figure out how to make that better. There's going to be a lot...

Leave my kids out of this.

What? no, no, I was talking about you.

No, I'm kidding, I'm kidding.

And that your kids are way more digitally advanced than I am, let me tell you. So it's really for the old people like me, we need to figure out a better solution. Look, there's a lot to do with the government. I mean, we need to be voting online. Why don't we have voting online. People are like, I'm afraid of voting online, it's going to be fraud. People are totally fine sending $10,000 with a couple of clicks of the button on their phone, but they're not comfortable voting online. Census 2020 that the government put online was phenomenal. I did -- I had the experience, took 5 minutes. We did a poll, Americans loved it. So the more things like that we can put online and digitize and simplify identity for everyone. It will work inside companies. It will work for consumers or work for customers. There's just a huge opportunity there. I mean, I don't know if the markets are $30 billion or $50 billion or $70 billion, it doesn't matter. There's a huge opportunity ahead. And we're very excited about what the future is going to bring.

All right. Thank you so much, Freddy, and I will let...

That's it? You're kicking me out?

I'm kicking you out. I've got Snowflake next, and not -- I'm going to tell him your comments so.

You can tell him, Frank is a friend of mine, tell him, I'm coming for him. It's great to see you. Thanks for having me. I really appreciate it.

Bye. Take care.

Thanks, take care. See you soon.