Please welcome Okta Co-founder and CEO, Todd McKinnon.
Hi, everyone. It's great to see you. Many familiar faces, some new ones. Thank you for all your support over the years. This is the 10th Oktane. Little known fact, see that picture from 2013? It was in this room. I think we might have more people now. That's kinda cool. We're looking backwards, and we're proud of what we've accomplished, but the keynote and the session today is all about the next 10 Oktanes and what's our vision and strategy for how we take this big, bold view we have of the industry and of what we could potentially achieve and how do we get there. How do we start to really change the world? We are gonna be talking a lot about Auth0 and Okta, better together. It's a really important part of our strategy and our company.
We've made a lot of great progress on the tactical integration, some of the integration and execution challenges we talked to you about the last earnings call we had. We are in a quiet period right now, so we'll give you a little bit of a high-level update, but a lot of the details are gonna have to wait for our Q3 earnings, which are coming up on, you all know, November 30th. I think the takeaway for me here is that we are all gonna look back on this in five years and think this is the most strategic acquisition we've ever done, and it's really gonna impact how we go forward toward prosecuting our vision. Which is, as you all know, is to free everyone to safely use any technology. That's what we're focused on. We do this by building the primary cloud for identity.
What that term means to us is that identity becomes such a strategic enabler for all of our customers. It's gonna be one of the most important things they invest in, one of their centers of gravity, their rocks, their key technology vendors that they're gonna pour resources into, and more importantly, they're gonna get tremendous value from. This has never happened before. The history of identity, there's been identity features and functions, but there's never been a big, independent, important identity company. When we started Okta, we would go around and talk to investors at the time, and they would ask us why we're trying to build an identity company. They said, "The best you could ever hope for was to sell your company to CA." You can draw your own conclusions about how motivating or demotivating that was.
We looked at the world at the time, and we saw smaller identity players that were reliant on emerging protocols and really providing tactical tools to companies to help solve some of these identity challenges. The balance of identity was really about big monolithic platforms on-prem that had built identity into their stacks, whether the best example of this is the Windows stack with Exchange and Windows Server and Active Directory and Windows clients. That wasn't the only one. IBM had the same version of it. It was connected to IBM's platforms and services, and Oracle the same way. Our insight was that we wanted to build this company where it was pre-integrated, so you could choose cloud applications at the time because that was just at the beginning of this big cloud migration.
You could connect those cloud applications to your environment and really free choice and free flexibility for everything you wanted to do. We've made a lot of progress, but the industry, it's still very fragmented and siloed. You all look at the industry as much as we do from a macro perspective, which is it's still very fragmented and siloed. If you look at the market share report, we are by far the biggest independent and neutral player, and there's a lot of money spent with a lot of smaller vendors down the stack there. We think over time, first of all, identity is a big and important category, and the winner in this category is gonna be independent and neutral, and I'll talk a little bit about why I think that. Those are two key takeaways.
Identity is a big, important category, and the winner is gonna be independent, neutral. Some of that success is gonna come from growing new parts of the market. For example, the customer identity market, it's more about people are doubling themselves, and there's tremendous opportunities we can unlock there. Workforce identity is a little different. There's this very fragmented array of vendors that we can help centralize and get more strategic values for customers by standardizing on the leading independent and neutral platform. The secular trends that have powered our success over the past 10 years are consistent and enduring. It's movement to the cloud. More apps that go to the cloud, more infrastructure go to the cloud, the more it heightens these identity challenges of knowing who people are, not bound to the network and how they can work from anywhere.
Accessing these cloud applications the customers don't know themselves. That's driven our success. It's the risks and the problems with security keep getting bigger and bigger, so people have to invest to make this new kind of architecture and this new kind of cloud-centric world work in a secure way. Everyone wants to do digital transformation, open up new markets, open up new opportunities. We are in a very, very different world, we are now than we were a year ago in terms of the macroeconomic environment, and that is a lot. That's causing changes in companies, and Okta is no exception.
We are, like everyone else, we're being very diligent in scrutinizing our investments to make sure that they have the ROI that they need to have the math to jump over the bar of our productivity we need from our investments. That's an important part of the changes we're making, and every customer is doing the same thing. Their money was free. I mean, a year ago, it's like, "Yeah, sure. Let's invest." What's the alternative? Zero interest rates? Customers are all going through this change as well. They're doubling down on the things that are gonna differentiate them, their core competencies. Okta is doing the same thing. The good news is that these trends are as applicable now as in any economic time. What does a cloud allow you to do? It allows you to do more with less.
It allows you to trade off capital expenses for operational expenses, flex your demand based on what's actually happening in your business. Security is an evergreen requirement. The risks of a regulatory oversight from a breach or reputational risks are consistent no matter what the macro outlook is. Digital transformation, talk about an opportunity. If you make the right focused investments to move forward past your competitors, it's a great opportunity for those that are doing right, doing it right. Central to our strategy is because of all these trends, there's this opportunity for identity to solve many more problems toward a much greater value than ever before possible. If we're gonna build this primary cloud for identity, we have to cover the identity use cases that are required for every area within a company.
Traditionally, identity was purchased by the CIO to, as you could imagine, to grease the skids of a rollout from a model with a tech stack. Now it really applies to everyone in our organization, from the board, the CEO, CIO, of course, adopting new technology, wanting to build a high-performing IT team, but it's also to the product development teams and the chief technical officer that are trying to innovate and not trying to waste time on undifferentiated development and focus that on what's gonna really differentiate their product in the market. Security, one of the biggest differences over the last 10 years is that when we first started selling Okta, we tried to avoid the security people because they were more on-prem centric. They didn't wanna move anything to the cloud.
We went to IT and then unlocked innovation and unlocked the choice of the cloud. That's very different now. Almost every one of our deals involves strong advocacy from the Chief Security Officer. The Chief Financial Officer wants to do more with less. Chief Marketing Officer wants to derive usage and conversion on websites and leads. That's why over 16,000 organizations have turned to Okta as the independent and neutral leader in this space. They can get all this business value out of identity now, and more and more and more are starting to realize this, whether it's supercharging the capabilities of their IT team or building a security model that's identity-powered and has identity at the center, whether it's optimizing the digital experiences they're presenting on their apps or websites.
It's really innovation without compromise as they take advantage of all the potential of technology. We've made a ton of progress, but we're not like resting our laurels or looking back and congratulating ourselves for how wonderful we are. It's all about the future. When we look at our opportunity, what could accelerate us and what could make us go faster? This is how we think about that. We have a massive addressable market, $80 billion. We've talked about that a lot. We're just getting started. You know, this year, we're gonna be about $1.8 billion into that. What are the opportunities? How can we accelerate things, go faster? What is happening around us that can unlock this massive opportunity even further?
Well, one important distinction is that I talk a lot about how the evolution of the cloud has helped us be more successful because when more apps are in the cloud, it heightens the security requirements. People can use the cloud to transform digitally. There's also, when you look at Okta, the fact that it is a cloud service itself. That is very differentiating for us. It's also an architectural advantage because simply, we can maintain and manage the integrations to over 7,000 services centrally, which wasn't possible on-premise. The fact that Okta is a cloud service itself is very important.
The fact of the matter is that for many organizations in the world, especially large organizations, it's still a new thing to look at a service that's gonna do identity and security and have that be done as a cloud service itself. That is an opportunity, but something very interesting happened last year. For the first time ever, the amount of spend on identity and access management outpaced in terms of cloud service, the deployments in the cloud, outpaced the deployments on-prem. This is according to IDC. It's an interesting inflection point in terms of the mindset. Because this is gonna change. In 10 years from now, the amount of cloud identity is gonna be the vast majority. That is, every other industry has gone through this. That's the technology trend. That is gonna happen.
If you look at other organizations like Salesforce, this inflection point happened in 2015. That was the first year where the amount of money spent on cloud-based CRM surpassed on-prem CRM. You can see what happened with Salesforce over the seven years after that. They went from $5 billion- $26 billion in revenue. The dynamics aren't exactly the same. It's a different market, different set of requirements. You could argue that in a using a security tool and an identity tool, the move and the tip to the cloud for that installation might be even more of an accelerant because it's such an impactful thing that once people make the flip and start seeing the value of it could accelerate things even faster.
This is exciting for the workforce side, but on the customer identity side, it's a little bit of a different story. If you look at the market share reports for customer identity, it's really a misrepresentation of what's going on because people that are spending money on customer identity, they're really not doing customer identity in the way we think about it. They're doing it in a way that is taking workforce access management and for projects that are controlled or managed by the CISO or the chief information officer, they're repurposing that for customer-facing initiatives. That's the revenue that the market share reports calculate. Our basic strategic investment is that there's a much bigger opportunity out there, which is people that are building it themselves.
People that are engineering folks and product folks and technical folks that aren't gonna take what IT is offering and use it. They wanna build it themselves. Our strategy around customer identity and our Customer Identity Cloud is to build the product that engineers and product people and developers love, thus unlocking this massive, I think, underappreciated TAM that is the opportunity cost of what all those people are giving up by building it themselves. We're attacking these trends very deliberately. The strategy is to be the best independent and neutral provider of identity overall, but doing that by addressing all the specific use cases with these two purpose-built clouds, Customer Identity Cloud and Workforce Identity Cloud. Now why does this have to come from one company?
I've just made the argument that there's distinction in terms of the requirements and the market dynamics, but why do they have to come from one company? Because it's still identity and customers in this complex environment of this technology and the business implications, they need one place to come to for a roadmap, for a vision, one set of experts to help them navigate this, one sales team, one subset of support offerings across all use cases. This is all very valuable and at a table stakes layer, but they also need a foundation of security and reliability. They have to make sure it's gonna work. They have to trust the provider.
Which is why we've spent $700 million of R&D since we acquired Auth0 last year to make sure this is true now and forever. There is integration. The first priority is not to merge these clouds together. The first priority is to build the best capabilities for these use cases and then where it makes sense to have this Okta integration platform layer that merges them together where it makes sense. Some examples that many of us have talked about before are workflows platform service that has equal applicability to both clouds and integrating that seamlessly. Or there's this exciting opportunity around data network effects where risk signals and threat information from one cloud can be used to protect the other cloud and vice versa.
I've talked about why identity is a big problem and some of the structural dynamics of the industry, but why is it important and why do we think the winner will be independent and neutral? It's for a very simple reason. The attraction and this was true back in the on-premise days, and now it's starting to happen, most particularly with Microsoft. Every other big platform company is going to try to own identity over time, whether it's the big infrastructure providers or it's the big other big collaboration companies. It's kind of this different worldview between monolithic platforms thinking that they're gonna control identity and lock you into their, frankly, mediocre platform applications and services in some cases. Sometimes they're great, but on average, they're not the best in the industry.
That's the way to get your integration and security. Our view of this open ecosystem that believes that we can provide both. We can provide the management and security and the enterprise readiness, but also give you choice for all this innovation. We believe in innovation. We believe that the big breakthrough that's gonna make every customer ten times more productive from a business process perspective or ten times more secure, we don't know what that is now. We've seen it in the history of technology. Innovators wanna innovate, and they'll keep making progress. That's why this fight for this open ecosystem is so important to us. It's only a vendor that is independent and neutral is gonna focus on this and make this a priority. I
In my career, I worked at Salesforce before I started Okta, and I had the opportunity to start Okta inside of Salesforce. I saw firsthand how that or any company that has an amazing set of applications is gonna be beholden to that set of applications. You're not gonna be able to build a completely integrated service that would take the customer outside of that set of applications. That's really important. On the foundational technology to do this, that's our Okta Integration Network. It was an innovation when we did it 13 years ago. It's still the broadest and deepest. It really is the technical layer that enables this choice.
If you think about all the exciting stuff we talked about at the keynote, it's our opportunity to take this to the next level that's the most exciting to us and to me personally. Our vision here of the Okta Integration Network is, if simply stated, it's that if applications in the Okta Integration Network use the Customer Identity Cloud, that will plug them into this new set of standards and the new set of capabilities that make workforce customers able to use those standards and use that set of capabilities in a way that's not possible today. By having both clouds together, we enable this open ecosystem of choice. This, the concrete benefits for both sides in this matter a lot. For workforce customers, they get the things they're craving, which is seamless Zero Trust security, continuous authentication, fine grain authorization.
It all works just out of the box. For the SaaS builders, the innovators in the world, they know what enterprise readiness looks like 'cause we define it in the APIs and the capabilities of the Customer Identity Cloud. Once they use that, they plug into the set of capabilities and get plugged into all the workforce customers around the world. This only works if both sides see the value. I've recorded this conversation with the co-CEO of Atlassian, Mike Cannon-Brookes, and I thought it would be helpful to hear his perspective on this. Mike, glad you could join us.
Thanks for having me, Heyman.
This view you've expressed about the Cambrian explosion of SaaS and the choice and the ability to have the right tool for the right job, it's pretty different than other big platforms if you think of the Microsofts or the other big suite companies. Why is it that you see the world so differently?
We have a fundamental ethos and extensibility of our tools, so deeply extensible, integratable. We want our customers and teams to work well together with whatever tools they need to use, and we want our products to win in the marketplace on their strengths for your team and the job they're trying to get done, not because of some sort of vendor lock-in.
What is your perspective on what value Okta can bring to this?
When you think about Cambrian SaaS, the explosion of applications, your own surveys, I should remember the name. I think it's like the average user uses 90 apps in a week or a month or, you know, it's some in tens of apps.
Growing, yeah.
Yeah, growing. That requires challenges that you in Okta, you know, deeply understand and are trying to solve. We see it every day, right? In terms of identity, is this the same person across two applications, right? How does data from Confluence get connected to data from Slack or from somewhere else? Yes, we can do point to point, but what is in my Okta database is fundamentally a list of all my applications and who has access to which, and all of my users, staff, employees, contractors, customers, whatever I put into my identity databases, bringing those together and servicing the Cambrian SaaS explosion with that data to enable better connections for customers is a really powerful and fantastic position, I think.
I couldn't agree more. I think that by working together, the ecosystem can be ten times bigger, and we can bring this to fruition, this Cambrian explosion that benefits everyone and makes the pie bigger for everyone. I look forward to doing a ton more with you and the whole Atlassian team in the future. It's cool to see Mike's buy-in there, but it's not just Mike. They are a customer of the Customer Identity Cloud today. It's also hundreds more applications in the Okta Integration Network that are currently built on the Customer Identity Cloud, and our vision is to increase this number greatly. Every application in the Okta Integration Network is actually built on the Customer Identity Cloud, and this is gonna unlock this open ecosystem of choice.
In summary, identity is an important category, and the winner will be independent and neutral because of this dynamic of this open ecosystem of choice. We're working hard to extend our lead in this important market. In the following sessions, you'll hear a bunch more details about the nuts and bolts of this and why we're all so pumped up about this opportunity and working hard to take advantage of it. You're gonna hear from Eugenio, who runs the Customer Identity Cloud. You're gonna hear from Sagnik, who runs the Workforce Identity Cloud. Of course, Susan St. Ledger runs field operations for Okta, and our amazing CFO is Brett Tighe.
They're gonna take you through their presentations, but you'll also get to hear a perspective of a key Customer Identity Cloud customer at Fifth Third Bank, John Podboy, who we're excited to have here. Kim Huffman from TripActions is gonna talk about the importance of identity there. Finally, Chris Cruz from AWS is gonna give his perspective on the ecosystem. Thanks a lot for your support, and we appreciate your attendance and your time. Now, please welcome Mr. Eugenio Pace.
Sir.
Hello, everyone. Good afternoon. Now, officially, it's afternoon. It's great to be here with all of you, some familiar faces as well. I am Eugenio Pace. In a previous life, I was a founder and the CEO of Auth0. Today, I run the Customer Identity product unit here at Okta. Today, I wanna cover three things. One is our overall strategy and market opportunity. Second, some exciting product announcements. Last but not least, our future opportunities and possibilities. On the last earnings call, you heard when you saw a preview of what our product strategy looks like, and it's really around these two specialized clouds, the Customer Identity Cloud and the Workforce Identity Cloud. Each one focused on different audiences and different buyers, different use cases and different requirements.
Customer Identity Cloud is focused on two specific use cases. The first one is consumer applications, what we call consumer apps and digital experiences, which we are all very familiar with because we are all consumers of something. Think about, you know, you take a train, an airplane, you make payments, all of that, all the things you do as individuals. The second use case is SaaS applications. If you're developers, if you're a developer building an app, you know, think the Workdays, the Salesforces, the Atlassians, the Slacks of the world. That's the second use case. How big is this opportunity? Well, according to our own research, it's pretty big. It's about $30 billion dollar market for us.
It might seem like a big number, that's a pretty big number, but if you think about it, think about all the, you know, who needs us. Everybody needs us. There's no company in the world that can live without identity. It's think about all the applications that surround us or the technology that surrounds us. All of that needs to know who the real users are. In the customer identity world, that is primarily a build yourself. Developers have solved this on their own, becoming part-time security experts, which is not really great. It shows because this has led to solutions that don't scale. They're not as secure as they should be. They cannot keep up with innovation, with new things that come up in the market, all of that, it's a problem.
The other component of our big opportunity at Okta is this bottoms-up product-led growth engine that we have, which allows us to start with, you know, very early on with smaller organizations, startups, you know, and then grow from there from trial to self-service all the way to enterprise deals. We have 48,000 active free subscriptions on our platform today, and 17,000 paying self-service customers. These are developers essentially putting the credit card every month. Why is that important? Well, it turns out that 45% of all the enterprise deals that we have closed in the first half of this fiscal year come from that segment. They come from somebody paying with a credit card. It's an incredibly important motion. This is just a small example of all companies that started that way.
They started with a little tiny thing, and they grew over time. Look at the diversity in industries and geographies. It's another testament of how universal this is. Now there's no doubt there's a big opportunity for us out there. Let's start with the first case, again, consumer apps. You know, we all know what great looks like, and we all know what not great looks like. We all have personal experiences about that. It's no surprise because identity is the first door into any application that we use, you know, as a sign up, as a login. It matters because digital experiences account for 10% of the U.S. GDP according to the Bureau of Economic Analysis. That's no joke number. It's a big, big number. Let's take a look at a typical journey of a company building a consumer-facing digital experience.
Welcome to Streamward, a global streaming platform. Home to shows like Night Shadow, Baking without Borders, and Puppy Island. For a while, Streamward was the darling of the industry, but lately, membership growth has flopped. People are frustrated with a poor experience, especially at registration and sign-on. They're flocking to Streamward's competitors. With millions of users, fluctuating demand, and all sorts of devices, Streamward's DIY identity solution just isn't cutting it. It's up to their new chief digital officer, Kate, to save the day. Fade in on the Okta Customer Identity Cloud, one of the world's most powerful, customizable identity solutions. Suddenly, Streamward is out of the identity business and back in the customer experience business. Okta simplifies and streamlines customer identity at scale, so teams have time to focus on innovating Streamward's platform and adapting quickly as needs change and audiences grow.
With thousands of pre-built integrations, SDKs, and APIs, Okta makes application development way more efficient, helping Streamward deliver blockbuster products to market faster. Customers get the kinds of seamless, personalized experiences that keep them coming back. Because Okta operates behind the scenes, Streamward's brand is the star of the show, and Kate wins best CDO. With Okta, you don't have to choose between a stellar experience and stronger security. Okta intelligently works to get users fast, secure access to the content they want, when they want it, improving your security posture, preventing attacks, and protecting revenue. When it comes to identity solutions, don't buy a B-list stand-in or worry about building something yourself. Trust the simple, adaptable, reliable Customer Identity Cloud without all the drama. Okta Customer Identity Cloud.
Now, of course, this is a fictitious story, but it's a story that we hear again and again with every customer that I get to talk to. It repeats again and again. Returning users, engaged users, loyalty, it's earned through this amazing digital experience. A digital experience that is not horrible. Every digital marketer in the world has been chasing this forever, and they have traditionally been forced to make trade-offs. Trade-offs between security and digital experience. We are led to believe that, you know, you can make an application super secure and then be a pain to use or super easy to use, but not very secure. The trick is that you have to maximize all these variables at the same time.
It's not an easy trick to pull off, but that's what we're here for. The Okta Customer Identity Cloud is designed from the grounds up to enable this, you know, to happen. This week, we are introducing four key enhancements that allow you to do this. The first one is features to increase retention and conversion of consumers and giving them the option to log in in any way they want. You can use a username, an email, their face, a finger, anything, their phone number, giving them choice. We also announced support for passwordless authentication via passkeys, which unlocks biometrics, advanced biometrics for everyone. We announced strong authentication capabilities for regulated industries like banks, healthcare companies and utility companies. These are all things that require deep expertise and bring a lot of complexity. We remove all of that as well.
Last but not least, we introduced Security Center, which gives our customers the ability to monitor, detect and respond to security events in real time. The sessions, the specializations that we have in our conference, they go deep into the roadmap and into timelines and what's in each of these buckets. Now, let's jump into the second use case, SaaS applications. Also under customer identity. They're very unique in the state. The SaaS market is exploding and, you know, companies rely more and more on more applications to do their job and do their business. You know, great example of that, it's the interview that we just saw between Todd and Atlassian's CEO. In simple terms, with the Okta Customer Identity Cloud, we help SaaS application builders ship enterprise-ready apps in no time.
We take care of all the complex enterprise-level requirements like federation, among other things. We also announced around this use case turnkey integration between the two clouds. Now it's possible to authenticate users that are protected, that are trying to go into one website protected with a Customer Identity Cloud with accounts that reside in the Workforce Identity Cloud. We do that with a new capability we just announced. We also made a fresh view into fine-grained authorization, another massively complex space that requires a lot of investment and time and to master. Last but not least, something that Todd mentioned in his vision presentation, which is this ability to have like a one-click publication of any size app on our marketplace, on the Okta Integration Network.
Developers are a very important component of what we do in this market, and it's a very, very important piece of our growth. With the Customer Identity Cloud, we make it easy for every developer in the world to be a master in all these things and to secure their applications in any way they want and do it quickly without having to become a part-time expert, which is never a good idea in the security world. Developers love choice too. They don't want to be forced into doing things in one and only way. We want to give them flexibility, and we want to give them what's important for them. Customer Identity Cloud can be called out from any application, in any programming language, in any stack.
Doesn't matter which is your stack of choice, .NET or Java or JavaScript, whatever. We support them all. You can also choose the cloud environment you want. We run on Microsoft Azure. We run on Amazon Web Services. You can provision Customer Identity Cloud from Heroku as well. This week we're announcing three new formal partnerships in other platforms developers love. DigitalOcean, Netlify and Vercel. We're bringing Customer Identity Cloud where developers are.
In a nutshell, we are making truly a no-brainer for any developer out there to use the Customer Identity Cloud for everything related to authentication and authorization instead of building these themselves, which is what's been happening and which is detracting from doing what is truly important for them, which is their own applications and their own customers, the customers that those applications serve. To make it even more accessible, to be pervasive across the world, we are also announcing a couple of other things. One, it's the ability to use the Okta Enterprise Connection for federation between the two clouds available for free for all our customers. We're also investing in content and in a framework like the Enterprise Identity Benchmark that gives developers guidance in how to go around doing this.
Last but not least, we're expanding the already very successful startup plan to lower the bar of entry and make it available for all startups with less than $5 million in funding, access to Customer Identity Cloud for free. Last but not least in here, I hope you see the strategically important connection between that the Okta Integration Network provides, because it connects the demand side of applications, which is workforce side, and the supply side of technology, which is SaaS builders. We are the connective tissue between those two. We're the only company that can do that.
To wrap it up, three takeaways. We are leaders in a market that is still early, maturing, underpenetrated, underserved. We're expanding capabilities to all developers in the world. With both the Workforce Identity Cloud and the Customer Identity, we are reaching all the key buyers in all organizations. With that, I'm thrilled to welcome one of our greatest customers, John Podboy from Fifth Third Bank, and our very own Eric Kelleher, our Chief Customer Officer. Thank you very much.
Thanks, everybody, for joining us here today. Eugenio, thanks for taking us through the Customer Identity Cloud and where we're going with that. It's my privilege, as Okta's chief customer officer, to welcome John Podboy to the stage. John, you have been a customer of Okta's for some time and a customer of the Customer Identity Cloud as well. We're going to spend a little bit of time talking about that. To start us off, let us know a little bit about you and your role and why you're here today.
Yeah, absolutely. Maybe I'll kind of kick off talking about my bank, Fifth Third Bank based in Cincinnati, Ohio. You know, top 15 bank in the United States. You know, really focused on digital transformation. In the last year, we really kicked off a massive platform modernization, really looking at how do we accelerate our speed to market and go about transforming a bank of our size. This is really kind of centered in how we focus on moving our core banking platform to a cloud-based system. Another way to put that is moving the bank to a cloud environment and looking at the dependencies there. Really this for us is an opportunity to continue our vision for a 160-year-old bank to focus on trust and relationships.
Trust and relationships when you really start thinking about in the digital perspective is identity. For us, our broader security org is really focused on driving transformation in the digital world and leveraging identity as a key pillar of bank transformation. My role is leading the identity pillar within information security and taking a very broad approach across organizational silos to think about how do we reimagine our security posture.
Yep.
also how do we deliver trust in the digital world?
That's great. It's a great context for how you're thinking about identity. As I mentioned, you've been a customer of the Customer Identity Cloud now for about a year. I'd be curious to know what were some of the initial challenges that you were looking to solve, back when you were making that assessment?
Yeah, it's a great question. I mean, I've had the privilege of being in and around Okta Auth0 at various organizations over the last 10 years. Large-scale companies from General Electric to Thomson Reuters, now the bank. Identity is always critical in transformation, and many organizations in the past have underestimated its criticality. We were very fortunate to be able to have that understanding when we were doing our assessment. It's not just a world-class partner technology, but it's also how does this connect to everyone and everything from users, devices, applications. When you think about transformation, that's the body of the work, is moving that to a modern stack. For us, first and foremost, it was about that unified platform approach to leverage that interoperability across the customer experience use cases and the enterprise.
Yeah. Were those the key criteria? Were there other key criteria that you were looking at as you were shopping for solutions?
Oh, absolutely. You know, obviously being a financial institution, we have to meet a variety of regulatory requirements. Many of those things come with a lot of dedicated focus. The very largest financial institutions have huge identity teams. We think about solving that problem. That's maybe a great approach for the past, but for us, is we want to take a modern approach. That scalability for us of the platform, using the right technology to automate functions instead of throwing people at a problem, really actually fixing these things and digitizing them. The wealth of the integration network, the pre-built APIs, the customization in the customer identity space is really critical.
That's great. Well, in your industry as well, I mean, banks are constantly under cyberattack. What role did technology and identity play for you, in banking transformation with that increased threat environment?
You know, that's a great question. You know, I think about more broadly, many organizations, not just banks or our institution, have really taken a on-prem focus, a device focus to security. Not that that's necessarily going away.
Yeah.
You talk about the Cambrian moment earlier of SaaS.
Yeah.
All these applications have pre-built identity if you don't have a centralized tool. You're talking about hundreds, thousands of systems you have to connect. You can't afford to take that same approach as we did in the past. For us, identity is probably one of the biggest strategic pillars of what we're doing in transformation. Not so much just identity for itself, whether it's authentication, authorization, but what it can drive, right? If you drive standards, you can say applications have to meet this new threshold. That is very empowering to drive embedded security to meet regulatory requirements.
More importantly then, it's thinking differently about the user experience and thinking about security from the user onward. You know, to maybe use a buzzword now, right? We're really thinking about how do we shift left with identity, right? To be at the forefront of security, not just as the front door, but continuing that journey, from that security posture.
That's great. It sounds like identity has evolved, its role has evolved with you as you've thought through navigating that landscape.
Absolutely. I mean, you know, I think we've gotten great support in building out. You know, people may have initially asked us, like, "Well, why is identity forefront of our transformation effort?" Right? It's just how you log in. It's like, whoa, wait a minute.
Yeah.
This is critical not only for security, but privacy, for marketing. It's really taking the approach to that broader view of what we're connected to.
Mm-hmm.
When you think about that spider web of connections, if you approach it the right way, you can drive a much broader transformation effort, and that's been very critical for us.
That's great. Thanks for sharing that. As I mentioned at the open, your Fifth Third Bank is also a customer of Okta's Workforce Identity Cloud. How do you view the role or the value in having one identity company that you're partnering with on this journey as a bank?
You know, that's a great question. You know, for me, I think, you know, there's obviously great capability out there, but that interoperability, that freedom to solve identity challenges independent of large ecosystems, was very, very important. Not that the capability may be different. It's the dependencies that come along with it, and Okta really allowed us to free that up. You know, I think, Todd may have mentioned it earlier, but, you know, you're seeing convergence across customer use cases, fraud use cases, AML, KYC, that are bleeding into the workforce side. Things you are required by law to do for your customers are now becoming requirements for your employees, and that's radically different, right? Where we may have to get to a world where, you know, just because you authenticate doesn't mean we trust you.
We have to provide verification or ongoing checks. You know, the platform, the capability that's already been built out in the customer side is starting to get merged into those enterprise use cases really to embed security with identity.
Okay. Some great examples and use cases there. Thanks for sharing that. What's next for you? What lies ahead as you think through the future of your digital transformation as you think about identity?
Yeah, I mean, I think we're on a many-year journey. You know, we've been very clear with our investors and what we're doing. Really it's about like many banks transforming us for the future of financial services. You know, Fifth Third was well known to have been an early player in inventing the ATM network in the 1970s with our Jeanie product. But many, like most of the organizations in financial services running on core mainframe systems, they were built to last decades.
As we think about our platform modernization play, identity, to me personally, is kind of one of those distinguishing things we gotta get right. You know, identity belongs to people, not necessarily just enterprises. How do we start enabling our customers to bring things with identity? There's a lot of speculation, you know, what is the future of financial services with customization? We could talk about digital wallets.
Yeah.
You could talk about blockchain, you know. At the end of the day, it's all going back to the user, who they are, how you maintain that relationship and provide value, trust. Digital trust is obviously critical when you're handing somebody their money and, you know, allowing them to invest it and care for it. You know, for us, you know, making sure we deliver on our promise of trust and that digital experience as we move into the next several decades will be critical.
That's great. Well, you closed in the commentary at all, bringing it all back to the user, and I think for Okta, for us, we bring it all back to the customer. While it's great for us to share our vision for where our products are going, what's most powerful for people to really understand is how our customers are leveraging the investments they're making to go solve their business problems. Really appreciate you taking the time to share your story with us here today. Can we all thank John for joining us here today?
Thanks very much.
Thanks.
With that, we're gonna switch gears. We've just opened on the Customer Identity Cloud. Next up, we're going to spend some time talking about the Workforce Identity Cloud. I'm pleased to introduce to the stage our President of Workforce Identity, Sagnik Nandy.
Thank you, Eric and John, for that great conversation. It's always inspiring to hear from our customers how we play a strategic role in their overall goals. Also throughout this morning, through multiple conversations with customers and partners, it's become very evident how strategic identity is increasingly becoming for every organization and business. I'm Sagnik Nandy. Hi, everyone. I'm the President of Technology and CTO for Okta Workforce Identity Cloud, and I am here to share some really exciting developments and plans in that space. We have been a leader in this space since we started, and the innovation that we've done and continue to do in this segment has helped not only shape that segment, but also transform it.
We're excited to continue to push the boundaries of workforce identity as more and more customers rely on Okta to make themselves secure and make their user experience delightful. It's an exciting time to be an innovator in the workforce identity space. We live in a boundaryless world today. No boundaries on how we work, when we work, where we work from, what technologies we use, what devices we use, how we connect, who we connect with. So today, the definition of a workforce, as a result of all of this, has become a lot more fluid, and the boundaries are really blurring around who's an employee, contractor, a business partner. The expectation is for Okta to provide connections for all these workers. Take T-Mobile, for an example.
They have hundreds of thousands of workers spread across employees, contractors, business partners, who all want access to their systems and tools and rely on Okta to provide it securely and efficiently. Using Okta, T-Mobile managed to reduce the number of authentications for their workforce by as much as 90%. This allowed them, the folks in T-Mobile, to focus on serving their customers and not worry about technology or treat technology like an impediment. That's the business we are in. We hear from customers like T-Mobile all the time that for them to be secure and for their business operations to be efficient, we really have to address their entire workforce. That's a use case we are very focused on, this extended workforce definition, extended collaboration.
Our investments in the past in Okta SCIM, along with our workforce investment, really sets us up well to address this broader extended workforce use case. Our vision for the Workforce Identity Cloud is truly to connect everyone to everything. This is the North Star that drives our innovation in this space. We'll talk about lots of interesting product launches and deliverables. Before that, let's take a step back and examine the workforce identity market and what's driving the need for innovation and solution in this space. We are the leader in the cloud-native workforce identity market, but we've only literally just begun scratching the surface of opportunity in this space.
We operate in a $50 billion total addressable market that can be split up as $35 billion in the identity and access management space and an additional $15 billion coming from adjacencies like identity governance and privileged access management. More importantly, there are 3.3 billion workers around the world, around 1 billion of them being knowledge workers. Increasingly more of these workers are accessing digital tools and applications from different locations and a growing range of services using a wider range of devices. As businesses enable their workforce in this boundaryless world, maintaining security of the workforce is more important than ever. According to the Verizon Data Breach, 82% of cybersecurity threats, you can trace back their roots to some form of credential stealing or abuses like phishing.
We at Okta take it very seriously to provide protection against all these security threats. We truly want to make things like anti-phishing technology available to every user on every device on every major operating system. As businesses, technology, and security trends change, we have remained maniacally focused on driving innovation and shaping and transforming this space. Identity has evolved a lot since we offered single sign-on and multi-factor authentication support 13 years back. As the space has evolved, you can see we've grown and helped the space grow. Everything from on-premises resources with Okta Advanced Server Access and Okta Access Gateway. We have also led our customers to push the boundaries of identity, allowing them to customize our solutions for their exact identity needs by rolling out Okta Identity Engine, which is a complete rewrite of our platform.
I'm excited to share that over 4,000 customers are already leveraging Okta Identity Engine, and this really allows them to make identity their own, customize it exactly the way they need to and they want to. We have also made great strides in eliminating the password completely where possible, because the password at its heart is very vulnerable and brittle. In 2021, we launched Okta FastPass, our passwordless solution. Okta FastPass provides passwordless solution for your workforce to connect to everything, thereby making the trade-off of choosing between a delightful user experience and robust security a choice of the past. We've also brought in FastPass and combined it with Device Trust, which can check for your OS version, whether your disks are encrypted, whether passcodes are enabled, thereby allowing you to create a higher security bar for your unmanaged devices as well as your managed devices.
This really allows you to improve your security posture for third parties by extending some of Okta's goodness beyond the boundaries of your managed device perimeter. Okta FastPass is heavily used with companies like Takeda, Zoom, Hitachi, all relying on it to provide delightful sign-in experience and making those sign-in experiences more secure. Oh, worth calling out. FastPass now powers more than 4 million unique authentications every month, with these numbers steadily growing. In 2020, we introduced Okta Workflows. Today, over 2,000 customers are leveraging the power of Workflows to drive automation and orchestration in their companies. Take Netflix, for an example. Netflix uses Workflows to orchestrate lifecycle management across different business units. Prior to Okta, they were using multiple homegrown solutions and several third-party solutions, and now with Okta, they can consolidate all of that across multiple business units.
Finally, Okta Identity Governance and Okta Privileged Access, which I'll cover in a lot more detail in a bit. They complete our vision of this unified platform that provides identity access management, governance, and privileged access in one solution that your IT and security teams rely on and trust and love. I'm really excited about this innovation journey and really look forward where that graph goes over the next few years, and we are very, very committed to making it grow upwards and in an even steeper trajectory. With that, let's talk about some product announcements. In the last couple of years, we've seen a number of high-profile attacks that had their roots in stolen credentials. That's why I'm really excited to announce the first announcement from this morning. We've made Okta FastPass phishing-resistant.
This has been a major undertaking, and I'm really proud of the team turning around this project at such a short timeframe. Since FastPass works on any device, every major operating system, and across multiple user bases, this means we are taking the anti-phishing goodness and making it available across all these touchpoints. We are also enhancing our controls for other authentication factors like WebAuthn factors or new FIDO authentication, like passkeys. This allows every company, every IT team to decide which factor or factors works best for their use cases. This flexibility and neutrality, the ability to let you choose what technology works best for your organization, is something very unique to Okta, and as Todd was mentioning, is part of our core DNA in providing that neutral choice to every customer.
The next major item I want to talk about is the progress we've made in the Okta Identity Governance and Okta Privileged Access space. I'm very, very excited to share that Okta Identity Governance is now available to everyone in North America with 100-plus customers already using it since its launch in August. Today, we announce that we are making it globally available for everyone by the end of this year. Okta Identity Governance reimagines how governance should be done, pushing for simplicity and automation in the entire process of who gets access to what resources and when. It's a great way to keep IT teams productive without hampering the user experience. We are very, very excited about what we have in store for Okta Identity Governance going into next year.
I'm also very excited about Okta Privileged Access, which we've been working hard on, and will be available for early access in Q2 of next year, and will be generally available for everyone, everywhere by the end of next year. Okta Privileged Access extend that same delightful user experience that Okta provides for apps and extends it to critical infrastructure, creating a far more modernized security stance for your privileged resources. As part of the unified solution, customers will get critical capabilities like privileged governance, vaulting support, and compliance audits, which are critical for securing privileged access systems all within the same workforce identity solution that they already use with Okta. Just to put that in context, traditionally, companies have been using several bespoke solutions for identity access management, governance, and privileged access.
This is not only time-consuming, given the number of integrations you have to do and the number of deployments, it's also very expensive. With the Workforce Identity Cloud, the customer will be able to get all these functionalities in one cloud solution, along with all the other goodness that they've come to expect with Okta, like uptime of four nines, you know, federal ATO, all sorts of goodness in that one combined unified solution. Only a unified platform can manage your users' access across any kind of resource, be it their apps, SaaS applications, servers, Kubernetes, and many, many more. That's what we are aspiring to provide. Kyndryl is a great example of the power of this unified solution. Kyndryl is a multinational IT company with around 90,000 workforce, spread globally with a massive cloud deployment.
They are leveraging Okta to knock down old silos of identity and create a unified view and platform for identity across 1,700+ apps. They also leverage Okta Advanced Server Access to modernize least privileged access to critical infrastructure like Linux, Windows, and virtual servers. Just to put it in context, using Okta, they managed to stop using 22 separate solutions that they inherited from IBM when they spun out and focused on one unified identity solution. That's the kind of power that Okta Workforce Identity Cloud allows them. Kyndryl is so happy with this that they are also using the deployment of Okta as a model they look to replicate with managed service customers. I spoke earlier about Okta Workflows, a flexible and powerful identity automation and orchestration platform, and we have some great updates on that front too.
Every day, we hear about new ways in which organizations are leveraging Workflows. Sonos, for example, uses Workflows for securely provisioning privileged accounts. French Red Cross uses Workflows for more than 80,000 users in times of emergency to quickly spin up resources for them. In this boundary-less world, empowering customers to automatically get a lot more of this done is super critical, and that's what Workflows facilitates. Okta has over 2,000 Workflow customers and growing, with many of them deploying hundreds of flows to drive identity automation and orchestration. Today, we are very excited to give customers some additional connectors and templates.
Some of these involve new security connectors that they can initiate flows based on, as well as risk signal integration, so they can actually initiate automatic flows based on certain risk factors. What also makes workflows very powerful is the ability for customers to share templates of flows with each other, so you can create something awesome and have others both share and use that or build on top of that. To facilitate more of that, we're excited to share that we are making it even easier to publish connectors with our new connector builder. It's already in early access right now and will be made generally available in Q1 of next year. We are really hoping this will facilitate a lot more flows, a lot more automation across a lot more amazing, exciting use cases backed by Okta.
All of this innovation that I just spoke about and these launches are all on the Workforce Identity Cloud itself. When you put that together with our Customer Identity Cloud that Eugenio spoke about, Okta and Auth0 coming together, the possibilities are truly endless. You heard earlier today from Todd as well as Eugenio about the vision of OIN and how we are making it easier than ever for SaaS providers to build and innovate on enterprise-ready apps on top of CIC with the OIN as a natural bridge and glue for this ecosystem. With OIN, we are really facilitating a lot more use cases and discoverability for apps that are part of that network. As an example, take our Businesses at Work report, which we publish annually, which tells people which apps are growing, what kind of usage we see in the SaaS space.
It creates this very symbiotic synergy for the SaaS ecosystem by being part of OIN, and we are hoping to continue to push in that direction. OIN also very naturally facilitates a lot of really interesting use cases across customer identity solutions and the Workforce Identity Cloud. As an example, take risk signals. If an application has been built using our Customer Identity Cloud and they detect a denial-of-service attack, they can instantly, through the OIN integration, share that information across every other application in the OIN, and Okta can then come and take preventive measures, maybe using workflows and other things. You get this natural benefit of an app being built using the Customer Identity Cloud and manage to span out that benefit to the entire ecosystem through OIN.
That's just, again, one example of something really exciting that we can do across these two clouds. The OIN of tomorrow will accelerate the next generation of standards and make things such as Zero Trust access, security, automation, and governance work a lot better together. It'll be a lot more powerful for customers to implement and operate. Organizations at the end of the day want to use the best technology so that their workforce is as secure and effective as possible. App builders want to build on what's the next big idea and get it up and running as fast as possible.
With Workforce Identity Cloud and Customer Identity Cloud coming together and things like OIN being a bridge, Okta is uniquely positioned to make this a reality for all businesses and make identity a linchpin in the development and adoption of several new technologies for the years to come. As we close our time together, I want to leave you with three main takeaways for the Workforce Identity Cloud. One, there are no more boundaries in today's workforce. Successful companies must be able to make people productive at any time, any location, any device, any software. That is why our mission at Okta is to safely connect everyone to everything.
Two, as identity challenges become more complex, a unified platform across access, governance, and privileged resource management will really help companies streamline their IT operations by bringing it all together in one unified, consolidated platform that they already depend on and love. Three, in a digital-first world, the combined power of the Workforce Identity Cloud and Customer Identity Clouds will truly unlock powerful identity solutions for enterprises, partners, and customers, as well as really take the overall SaaS industry forward. This is why we are so excited about the next 10 years of innovation and opportunity that Okta has. Really, really excited, and thank you for your time today. Next, I'd love to welcome back Eric for a conversation with an Okta customer who leverages both the Workforce Identity Cloud and the Customer Identity Cloud, Kim Huffman from TripActions.
Thanks for joining us. It was great having you on the main stage this morning. We appreciate you joining us here today as well. You were great. I know the audience really enjoyed hearing your story in some detail. We wanted to share a little bit of that with this audience as well and give them some context for how you think about identity. One of the things that's really apparent from hearing you talk about TripActions is how fundamentally you think as an identity-first company. I'd love to hear a little bit about that philosophy and your role as Chief Information Officer.
Sure. Yeah, it's been an interesting journey. I joined TripActions about a year ago, right at the tail end of the pandemic, and really to come in and with the main purpose of focusing on building a technology foundation that obviously would be able to scale and grow as the company began to grow quite quickly when travel came back.
The underlying kind of strategy with that is really focusing on developing tools and buying solutions that allow us to scale and be agile to our business. In looking at our business, we are, as I said, a travel company focused on really rethinking the way that individuals take business travel end to end, not just booking a trip, but also the expense management associated with that. We view ourselves as a tech company, not a travel company. For us, innovation is very important and partnering with companies that are focused on innovation. When we looked at solutions that we had in our technology stack that were really going to allow us to grow and scale quickly, we looked at the Customer Identity Cloud.
We had an in-house IDP solution that we'd been using and, you know, looking at solutions that allow our developers and our engineers to really focus on what our core competencies are, which is developing the best travel and expense platform and not necessarily an identity solution, was really critical for us. It allowed us to have an immense speed to delivery, ease of use for our customers, and actually a partner that's focused on identity. Security is very important and trust is very important in our industry, and so we wanted a partner that was thinking about identity all the time and was going to continue to be building identity and innovating in the identity space. That's where some of the things that we looked at as it related to the innovation.
That's awesome. That's great. Thank you. You shared earlier this morning part of the timing of your joining, and you just mentioned at the end of the pandemic. Clearly, this was a challenging time for travel. There was no travel at the beginning of the pandemic. How have you, how has TripActions thought about technology's role in helping it navigate through those shifts in the industry?
Well, I think you know we have a fundamental sort of mission in that. We think that, you know, the industry that we're in, which is travel and expense, is sort of ripe for innovation, and there's a lot of opportunity to disrupt and continue to innovate and push delightful user experiences, which isn't usually synonymous with the travel industry. You know, we look at technology, and we look at, you know, tools and really trying to balance innovation and user experience and security. You know, when we started looking at, you know, we were a Workforce customer since I got there.
Yeah.
I've used Workforce for many years.
Been over three years.
I still get really excited when I see the roadmap that I saw today for Workforce, because there's a lot of great functionality there. It allowed us to look at, you know, continuing to innovate. What we're really focused on is this kind of speed of delivery, speed of adoption.
Yeah.
When we looked at the Customer Identity Cloud and specifically the Okta Integration Network.
Yeah.
Most of our customers are already on Okta, so they already understand the Okta ecosystem. Their users are already comfortable with Okta, and so it was a natural extension for us to use the Customer Identity Cloud and push, you know, onboarding and getting the users on our platform is one of the key success factors when we sell to a new customer. The fact that they can use any, you know, if Okta's the integration platform and their users are used to seeing it on their tile, it's just one less kind of friction point in that change management that we're trying to focus on with our customers.
You mentioned being on the Workforce Identity Cloud prior to your arrival, and it's been about three years in total since TripActions had that deployed. Obviously, that now that's part of your portfolio as well. How do you think about the benefits or what do you see as the benefits to having one identity provider for you as you look through these very different use cases for how your stack has evolved?
I think there's, you know, fundamentally for both clouds, there's common elements in that are foundational. There's also, you know, a scaling that we are able to take advantage of as far as economy of scale, where, you know, the people that are supporting our apps understand it. We're using the, you know, some of the same common foundations across both. I think, you know, as our customers are maybe even, you know, have questions on, "Hey, we have a question on the Workforce," we can help them, right? Because we've got people that are internally capable in both of the clouds. It's given us an opportunity to kind of focus on learning one technology, partnering with one partner that can offer us solutions on both sides.
You mentioned prior to this, the team was building in-house, right? How has that affected your ability to adjust your resourcing as you've partnered with Okta on this?
Yeah, I mean, I think, you know, we were, you know, obviously a smaller company, fast growth, and so I think they built it in-house, which makes sense in some cases. Obviously, now, if you're a start-up, it makes much more sense to go with the Customer Identity Cloud, but at the time, that didn't exist. I think it allowed our developers, again, to focus on the things that they wanted to focus on. Like I said this morning, in the keynote, you know, your developers and your engineers at Okta are thinking about identity 24/7.
Yep.
Ours are thinking about, you know, travel and expense features, and I actually would prefer that they don't think about identity 24/7. It's allowed us to move much faster. Actually, I think what it's done is, you know, there's a trade-off between sort of ease of use and security and privacy. I think we don't have to have that compromise anymore because I think there's enough innovation in the space where we're not forced to make those choices. We can have a solution that does both seamlessly for us.
That's great. Great to hear. What, so what do you see in the future? You mentioned some excitement over the roadmap specifically, but what do you see as evolving in the roadmap for identity overall at TripActions?
Well, I mean, I think, you know, personally for me, you know, as I was looking at the hearing in the keynote today and just hearing about Mac again, there's a lot of things that I think we've used point solutions for in the past.
Mm-hmm.
around our identity, around workforce management or even in the Customer Identity Cloud. I think as Okta is evolving feature sets, it's gonna allow for an opportunity for us to consolidate-
Yeah.
Some of our existing solutions move onto the platform, which, you know, we have a lot of applications, so anytime I have an opportunity to consolidate, it's great for me, so.
We hear that a lot as from that. Well, thank you for sharing your experience with us today. This is really helpful. Let me also thank you to Kim for joining us here today. Thanks very much.
Thank you, everybody. At this time, we'll take a brief 15-minute break. If we could have everyone back in the room in 15 minutes, please. Back by 1:35. Thank you. Please take your seats. Our program is about to begin. Please welcome Okta's President of Worldwide Field Operations, Susan St. Ledger.
Hello. Thank you for joining us. Today, I'm gonna talk you through a few things. Due to the high degree of interest from the last earnings call, I'm gonna walk you through our progress on the integration process. I wanna talk to you about how our two-product strategy and the market is evolving, about why the market is coming to us, and what are the drivers for our customers. Lastly, I'm gonna cover our go-to-market strategy. We'll start with the integration process. We implemented several things very recently in the effort to stabilize go-to-market, I should say, at the end of Q2. Unifying the CRM system was one, unifying product marketing teams was a second.
Doubling down on sales enablement was a huge one for us and putting more dollars into the commission pool for the second half of the year for our account executives. Lastly, we intentionally slowed hiring to make sure that we had absorption of all the new people. Of, as a result, there's been a significant decrease, or a significant improvement, I should say, in Q3 attrition. Of course, there's always more to do, but we are pleased with the progress so far. Let's talk about the market evolution. I know that all of you in this room are very well-versed on the TAM, but what I wanted to do is level set on the difference in the level of maturity between the Workforce Identity Cloud and the Customer Identity Cloud.
Customer identity is far less mature, and in my personal opinion, greatly understated. Whenever a market is in its early stages, it's usually underestimated from a TAM perspective. Just look at Workforce. Workforce in 2009 was stated to be a $4 billion TAM, and now in 2022, it's $50 billion. Customer identity is estimated to be a $30 billion TAM right now, but the reason I believe it's even bigger is a pretty simple proof point. How many identities do you have at work? You have one. I have one. I'm SSL at Okta. How many do you have in your personal life? I have dozens. Netflix and Peloton and my bank and my Tesla and whatever else. How many do you add every year? How many do your kids have? How many does your wife have?
All the people you know in your life, and how many do they add year over year? That is the customer identity opportunity. Whether it's customer identity or workforce identity, our fundamental belief is that everybody needs Okta. Whether you're a big company or a small company, whether you're an established company or a digital native company, across every industry. Again, it's a really simple principle. Every time you're trying to connect people and technology, you need identity. To better understand our belief, what I wanted to do was discuss the drivers for each of these markets so that we validate that these drivers, every single one of them, are continuing to grow and accelerate, and we're in the early innings. We'll start with workforce. The drivers for workforce are cloud modernization and migration, IT efficiency and security, and employee experience.
Let's look at them one at a time. Cloud migration and modernization, whether you're rolling out Salesforce or Workday, or whether you're building your own homegrown cloud-native apps, that's a key driver for Okta Workforce. Security is an obvious driver, but with the acceleration of remote work and the immense focus on Zero Trust, in conjunction with the recognition that people have become the new security perimeter, that's also accelerating. You know, there was a protocol statistic, and you saw some good statistics from Sagnik Nandy as well, but there's a protocol statistic that says 48% of all breaches in 2021 were due to credentials. That's the largest vehicle by far for any category of breach. IT efficiency. We all know that IT efficiency is a never-ending battle.
Whether it's M&A or just legacy siloed on-prem tech that created your siloed identity, it creates havoc for enterprises. Of course, IT is always looking for increases in efficiencies, and that's gonna continue, especially in this macroeconomic environment. You know, our core Workforce Identity Cloud inherently drives efficiencies, but by adding automation capabilities like Lifecycle Management and the Workflows that you heard from Sagnik Nandy, we're seeing our customers get tremendous improvement in automation and productivity. A great example of this is Zoom. Zoom is what we call a power Workflows user, and they use us for many, many use cases. The one they like to talk about a lot is they use us for license management. By looking at the number of authentications that happen across all of their licenses in their software environment.
In one particular case, they were able to save 72% on every underutilized license in their office productivity suite. Employee experience, we all know that is incredibly important. I love the fact that when I get up in the morning, all I have to do is put my fingerprint on my keyboard, and I have access to everything right at my fingertips. I think we can all agree that all of these drivers are accelerating, and the same can be said for the customer identity side. What are the drivers here? They're security, consumer applications and digital experiences, and SaaS applications. Security here, also obvious, but it's focused on fraud detection mostly. Whether it's bots or credential stuffing, our customers need to be protected. This is not true of just consumer companies, but public sector.
If we look at the number of digital experiences that are government to citizen now and the explosion that both federal and state and local markets have driven, it's unbelievable. They've become a large customer for this use case for us. Take, for instance, the Kansas Department of Labor. During the pandemic, their unemployment claims and their federal pandemic relief claims went through the roof. As they did, their fraudulent logins were off the charts. They came to Okta, and upon implementation, within just one week, we were able to stop over 1 million fraudulent logins. You heard about why SaaS is such a big market for us and why it's such a big driver with customer identity.
We now have over 2,000 SaaS applications or application providers already on our customer identity, and that now we're putting a big focus on it. That just happened inherently and naturally in the Auth0 environment. The SaaS market is estimated to go from $130 billion- $716 billion by 2028. The last driver for customer identity is probably the most important, and you heard Kim from TripActions talk about it, and that is about frictionless customer experience. From your websites to your apps to your Tesla console, digital experiences can make or break companies these days. It is the new competitive frontier. I don't care if you're a bank or hospitality or what your business is, it's the new competitive frontier. But customer experience has many different facets to it.
If you look at Warby Parker, they chose Okta to create an omnichannel experience so that their customers had a seamless experience, whether they were logging in to buy glasses or actually logging in for a virtual vision test, which they offer. Dignity Health created one, a centralized login experience so that their patients could log in one place, whether they wanted to look at their patient records or talk to healthcare providers. Decreasing friction to acquire and convert has become a science for marketers. With technology such as progressive profiling, gone are the days where people are willing to fill out big forms to try and do business with you. Those are over.
Lastly, another use case, conglomerates like Albertsons, who have so many brands, they have to unify loyalty benefits, and they do it with Okta, so that you're rewarded for shopping at any of their 19 brands. Every brand has at least one of these problems, but most brands have all of these problems. Of course, none of these customer identity drivers are new, but the landscape is changing and truly accelerating dramatically. The results are undeniable. There was a Watermark Consulting report recently that said customer experience leaders generate a total return of 3.4x that of customer experience laggards. The pace at which these experiences are being delivered on cloud-native platforms is another accelerant. Gartner reported that by 2025, cloud-native platforms will serve the foundation for 95% of new digital initiatives. That's up from 40% in 2021.
That's an incredible jump over a four-year period. Another contributor to the changing landscape is build versus buy. You heard a little bit about this from Todd, a little bit about this from Eugenio, but I wanna tell you what I hear from my customers. This definitely was a build it yourself environment. Customer identity was all about building it yourself. Developers are recognizing that the two hardest things to build are payment services and authentication services. The hardest thing to keep up with once you've built it is authentication because of the constantly changing threat landscape. Now add to that the volume of digital experiences that every every company has to put out there for their customers is exploding. Developers wanna focus on innovation. They wanna focus on their core business innovation that's gonna drive their top line, not on identity.
You heard a great example of that again from Kim. It was, we recognize we were spending too much time maintaining identity. She said any startup today would choose Customer Identity Cloud. Customers trust Okta. It's built by identity experts, and they know that they're not gonna have to worry about us. We are constantly going to deliver scale and innovation for them on the identity front. So how does all of this that I just talked about impact our go-to-market strategy? Of course, the most significant shift in our go-to-market strategy is driven by becoming a two-product company. We now have the ability to serve the entire enterprise identity needs for our customers. Early indications are that our customers are really excited about our two cloud strategy.
The common themes that we hear are that they are very excited about our converged identity vision and the ability to have a single provider for all of their identity needs. Of course, they trust Okta, and we've seen this over the years constantly, where people move from one company to another, and they take Okta with them. We have a great history with CISOs and CIOs, and while they are not the decision-makers for customer identity, they are extreme influencers. Lastly, Todd mentioned these clouds are purpose-built, and our customers love that. They believe our Customer Identity Cloud and our Workforce Identity Cloud are custom-built and best-of-breed technologies. Let's take a look at a customer who bought both Workforce Identity Cloud and Customer Identity Cloud from Okta and their continuous expansion.
In 2018, this technology customer chose Okta for its workforce needs as well as its extended workforce. The drivers for them at the time were improving security, user provisioning, and scale. They were a hot company, they were growing fast, and they knew they were gonna need to choose a solution that scaled. As you can see, over time, they continued to renew and expand, adding employees and a variety of profiles, knowledge workers, warehouse employees, delivery drivers, and content partners. In 2021, they unleashed the power of workflows. You're hearing a common theme here on workflows. They saw immediate results in the change to the onboarding program. They integrated 11 day-one applications and saved 90 minutes per user in the onboarding process. They were, at this time, onboarding hundreds of people per month. That's an incredible improvement in IT efficiency.
Later in 2021, that's when they decided, okay, now it was time for them to really change their digital customer experience, and they purchased Customer Identity Cloud. In January of this year, they renewed and expanded with a longer contract term and higher TCV. This is a great example of a company that chose Okta for their enterprise-wide identity needs. How has becoming a two-product company changed our go-to-market strategy? I know that's a big question that's on your mind, and there have been so many questions about the need for specialization. It's the right question. It is the right question. The question is not if it's needed, it's where it's needed. We've invested deeply in sales engineering specialization.
We made the decision to have one account executive across both clouds. The reason being this strategy to have one account executive aligns with this very important shift that you heard Todd talk about, which is identity is becoming a board-level discussion for many companies. More and more organizations are recognizing that identity is a ten-year strategic decision that enables business outcomes. We had our executive summit yesterday and into the evening last night, and it was unbelievable hearing the stories from an Air Force CIO, from MLB about how identity has become an enabler for their business. It was never seen that way in the past. We're getting into these executive-level conversations. We're enabling our account executives to have that level of conversation focused on business outcomes and identities enabling of those business outcomes.
Whether it's workforce identity or whether it's customer identity, it's still identity. Based upon the decision-makers, the influencers and the champions, we align our sales force, which is made up of both account executives and sales engineers to have the right level of discussions. We specialize our SEs on a range of skills based upon the customer needs. We have sales engineers that do hands-on keyboard, that do configurations, and that drive all of our proof of concepts. We have field technology officers, we call them field CTOs, that have enterprise architecture discussions and also help our customers figure out their enterprise-wide identity strategy. We have SEs that were previously developers, and we have SEs that have deep, deep, deep security backgrounds, far beyond just understanding identity.
Whether it's a frictionless employee experience for workforce or a frictionless consumer experience for a website, identity is the enabler. Whether it's cloud modernization so that you can adopt business applications for your employees faster or whether it's enabling faster time to market for new consumer experiences, identity is the enabler. This elevation of identity as a ten-year strategic decision and the fact that we can now serve end-to-end enterprise-wide identity needs has actually led our customers to expect more out of Okta. As such, we expect more out of our partners. The last part of the go-to-market strategy that I want to touch on today is to talk about how our partner ecosystem is evolving. As you all know, the early strategy as it is with any company, we were smaller, and it was all about reach.
The partner ecosystem was mostly focused on resellers, and they're still important where we need reach. Still very important where we need reach. With the market evolution and the expansion of our portfolio into customer identity, Okta has become much more interesting to new partner types. Let's start with SIs, systems integrators. Whether they're global or boutique, it doesn't matter. They recognize that identity is now central to cloud modernization, Zero Trust, and modernization of consumer experiences. We have two great proof points just this week. For the first time ever, we have a global SI in Deloitte, and we have a boutique SI in BeyondID that are both platinum sponsors of Oktane. That has never happened before. That is a great proof point that they now understand how much business they can build around the Okta ecosystem. Next, we'll talk about service providers.
Managed service providers are an important go-to-market motion in certain parts of the world. We've established two critical design partnerships this year with strategic providers, one in EMEA, one in Europe, and one in Asia-Pac. We'll be building out that motion over the coming year. Our technology partners, of course, remain at the center of our biggest competitive advantage, and you heard all about this from Todd. Neutrality. Neutrality and independence. Our OEM partnerships afford our customers deep, seamless integrations with over 7,000 technologies. Some of the most prolific are our security partners that help us bring Zero Trust to our customers, as well as our SaaS partners. The addition of customer identity to our portfolio accelerates the enterprise readiness for every SaaS partner who chooses to build on customer identity, on our Customer Identity Cloud.
At scale, that's gonna create an incredible network effect for all of our customers that are eager to adopt more and more SaaS applications. Last but not least, cloud service providers. It's become very clear to us that our customers are very excited about buying off the AWS Marketplace. Our year-over-year growth with AWS is 300% already against last year's full year. It's no surprise that AWS is Okta's technology partner of the year. We look forward to doing much more with AWS in FY 2024 and beyond. With that, I would love to invite Chris Gruz up to the stage to chat with me.
All right.
All right. Thank you so much.
Thank you for the partner award. You were wonderful.
Well, it's very well deserved. Huge congrats, and we should probably chat a little bit about you're the one responsible for partnerships. Maybe if you could take a few minutes and tell our audience specifically what your role entails.
Yeah. Sure. I run the alliance organization for AWS, and that is specifically for our ISV partners. I'm part of Amazon Partner Network. Any ISV that's a partner with AWS goes to my organization, and that also includes Marketplace. Earlier this year, Marketplace and the Amazon Partner org were actually separate teams, and we've merged those two teams together. I'm responsible for all the business development functions for Marketplace as well as our ISV teams worldwide that are building on top of AWS.
Excellent. Can you share maybe some of the trends that you're seeing, changes that you're seeing in the Marketplace?
Yeah. I mean, first of all, Marketplace, it's interesting. I've been with the team now for seven years, and when I first joined the team, there was a ton of evangelism that we were doing. We were just trying to get ISVs to try Marketplace out. We were trying to get customers to try it out. So there was a lot of kind of convincing that was going on. I think the tipping point was about two years ago at re:Invent, where suddenly the conversation has changed, where it was no longer, "Should I try it?" But it was more about, "How do I do better?" We saw ISV suddenly just defaulting to selling through Marketplaces. We also saw our buyer community doing the same thing, where we had buyers that had the same type of experience.
They maybe put their foot in the water and tried it, but suddenly they were now doing all of their subscriptions for their software on AWS through Marketplace. They went from doing one or two subscriptions to dozens of subscriptions. We've really seen Marketplaces take off in a very material way. Last year was the first year that we disclosed how much revenue was going through Marketplace. It's now in the $ billions. The size of the deals has gone up dramatically. When I first started, the transaction sizes were very small. It was $2,000. We're now seeing subscriptions that are seven figures, eight figures, and even starting to get up to nine figures in size. The deal size has grown dramatically.
The other piece is that it's really branched out from just infrastructure-related products. You know, so we used to sell security products and networking, and those were the top categories. Now we're starting to see line of business solutions sell through Marketplace. We're seeing products like Infor. People are buying ERP systems through Marketplace.
Wow.
They're buying help desk solutions. They're buying things like Genesys for their call center. We're seeing customers buy everything, not just infrastructure products, but all their software through Marketplace. That's a big trend. Then the buyers are changing, right? Again, it used to be that storage admin, a security admin that was buying through our Marketplace. Now it's become a line of business buyer. They're buying those types of solutions because those horizontal apps or these vertical apps, they're not bought by a CIO's office. They're bought by that line of business. We're now seeing all kinds of SaaS applications across the board come in, which candidly makes it much more critical for us to work with Okta as well, because that is now the way that these SaaS applications are coming into AWS.
That's great 'cause, well, first of all, congratulations 'cause it speaks to how seamless you've made the experience. It really is. It's pretty amazing. Maybe let's talk specifically about why identity has become such a critical element. What do you see from customers?
Yeah. It's interesting. One of the other service lines I ran business development for was it was a service called Control Tower, and it's an automation tool that basically automates the standing up of what we call a landing zone. This is how customers build their AWS environments. It's kind of like a stamping factory. They standardize their standard accounts, and then they use Control Tower to distribute those. What we started to see was that there was common themes on the type of software that they used the very first day they worked with AWS. You know, security is kind of a day zero type of solution, but then when you peel that back, there's a whole variety of different technologies that fit underneath security.
What we found was that there was ultimately three things that always got implemented. One was identity. As soon as you came in, that had to be established, so identity was a job zero function. The second piece was observability. We would see them add, like how they're gonna send their logs and where those were gonna go. Those types of solutions were also kind of a day one type of solution. The final point was really more that endpoint security product. People wouldn't, you know, secure their instances, and they'd have an endpoint security product. Identity was always one of these things that always popped up at the very first time that they started with AWS.
Makes sense. Yeah, it does make sense. Obviously, we value our relationship tremendously. It would be great if you talked a little bit about what Okta brings that's unique. You have a lot of ISVs, as you just said, and you know, I remember in the early days, there were a handful of ISVs. You know, what is it that makes Okta so unique and that drives our partnership?
Yeah. I mean, it's you know, if we take a look at Marketplace, we're a 10-year-old service. We have over 2,000 ISVs now. What's cool about Okta is it's first of all, it's so complementary to what we're trying to do, right? There's a lot of solutions that we have in Marketplace, but again, it is such a complementary solution. You know, our customers want identity. They wanna have this identity posture in place as they move to AWS. It is such a complementary relationship. I point to that. Number two, you've done the work to really integrate fully into AWS.
What I mean by that is there's now 21 plus integrations and counting, and they're across a variety of AWS services. You've integrated Okta into, like, our SaaS applications like Chime or AppStream. You've integrated some of our lower-level services like API Gateway. You know, having that identity storyline across multiple AWS services is key. I think out of your catalog, you've got 7,000 plugins in your catalog, and
Mm-hmm.
The last I heard is that your plugin for the AWS console is actually, I think, number two in your entire catalog.
Right.
You know, that's just great validation by our joint customers. We've got thousands of joint customers, and it's really cool to see that, you know, we're that high up on your catalog, and it just, again, it helps drive that migration to AWS, which is ultimately what we look at from an AWS perspective. You know, how do we make these migrations go faster? If we can have that identity story up front, ultimately it's driving those customers quicker to AWS, and it's also growing all the other SaaS applications that are built on top of AWS. 'Cause now they can use Okta, that's gonna grow their consumers as well. They're streamlining on that side as well. It's not just the migration for those back office systems. Okta helps enable and grow all the other SaaS applications that are growing on top of AWS.
That's a great call-out. I guess, you know, specifically the part of the reason why it works so well is because we have a deep technology partnership between our development teams and engineering teams, and then we have the go-to-market that marries with it. I think that's why we've seen the acceleration, for sure.
Yeah.
That's great. All right, so let's look into the near future. Marketplace just keeps getting more and more successful and then thereby making us more successful. What can we look forward to in the future that will help.
Yeah
you and the other ISVs?
A couple things. One, we're gonna continue to focus on how do we automate that SaaS experience with AWS. When we first launched Marketplace, it was really a machine image catalog. We had this nice integrated experience where the Amazon machine image was purchased, and it was easily deployed in one motion to an AWS customer. When we launched SaaS, we kinda jumped more to the contracting side. What we found is that people would buy a SaaS solution, but then they would have to spend, you know, hours or even days wiring that up to set that up effectively with AWS. There's a whole bunch of things that we have on our roadmap to streamline that. How do we deploy agents for Okta? How do we make it a much more integrated experience?
It starts to resemble more of a first-party look and feel when you're using it alongside AWS services. The automation is a big one. The second piece is we're gonna continue to invest in the channel. It's kind of interesting. When we launched Marketplace, our original model was gonna be more of an app store type of approach. You would have ISVs on one side, you have customers on the other. It was gonna be so simple, you wouldn't even need a channel partner. That was a big miss for us because what we found is that there's this huge transformation going on in the channel. Like, local VARs that were doing, you know, break, fix, rack and stack for small data centers, that work is going away.
What we've seen is that work is now being replaced by managed services, consultation, implementation. We've effectively retrofitted our marketplace that we can now bring in channel partners. When we launched Okta, this is one of the big things we talked about, was how do we bring born in the cloud channel partners to Okta?
Yeah.
We're really excited about that. Through our channel partner functionality, Okta can just authorize resellers to resell through Marketplace. We take care of all the billing. We do all the distribution of those funds, and so it becomes a nice channel enabler as well. That's another area that we've seen really good growth on that we're gonna continue to double down on. Then further, just working closer with top ISVs like Okta. You know, again, as I kinda rewind back when we started, it was kind of a trial and experience that people were kinda putting their foot in the water. What we're finding now is that Marketplace is becoming a material part of our ISV's businesses. What I mean by that is we look at materiality as if they're doing over 10% of their revenue through Marketplace.
We're seeing a lot of our ISVs actually surpass that clip. You know, that means better co-selling in the field, better field alignment, better executive alignment, alongside all the automation that we bring to the table from a Marketplace perspective. Those are a couple big ones. We're also doing a lot on the international side. I think that was the final piece that we really looked at for Okta, is how do we help bring Okta out to the international markets? Marketplace, because we're a day-one service within AWS, anytime we launch a new region, Marketplace is there. We're starting to see a lot of ISVs look at Marketplace as now the go-to-market motion for their international expansion. It's cheaper just to use Marketplace than go putting people in different geos, hiring people, figuring out the labor laws.
Just use AWS, use the co-sell resources, use the integrations that we provide through Marketplace to, you know, really expand that international footprint.
Totally agree. First of all, your sales team has been unbelievable to partner with. It's just been had such a huge impact. The global reach is definitely starting to work, so we're excited about that. I think it's gonna continue to accelerate. Let's give Chris a round of applause. Thank you so much for joining.
Thank you.
All right. With that, I would like to introduce our CFO, Brett Tighe, to take us home.
Thank you, Susan. Thank you, Chris. That was a very insightful conversation. I know we're very excited about the partnership, so thank you for taking the time to chat with us, Chris. We appreciate it. Thank you everyone for joining us today. We know your time is valuable, so we really appreciate you all being here, and, you know, taking a little bit of your time to learn a little bit more about Okta. If there are really two takeaways I wanna get across over the next 15 minutes or so, these are the two. You can tune out after we get past this slide if you'd like, but these are the two things I wanna make sure that I really get across, right? Our company's only 13 years old.
It's only 13 years old, and we've developed a very strong foundation. The reason that foundation matters is something you've heard throughout this presentation, and, frankly, as you've heard over the last several quarters, around this massive market opportunity. We've earned the right now to go after that massive market opportunity because of that strong foundation we've built. I'll talk, we'll talk a little bit about that foundation over the next few slides. Then from a financial profile, we've got a very attractive financial profile. There's a lot of reasons to like it. You know, you can start with the fact that it's obviously we're a SaaS business, fully SaaS business, so you land and expand. We do a great job of that. You'll hear a little bit more about that later today. Our ability to balance growth and profitability.
You'll hear a little bit more about that throughout the presentation. Those are the two things, strong foundation and a very attractive long-term financial profile. I wanna make sure you guys get that. Let's look at that strong foundation. We could have dizzied you with a bunch of numbers, but we decided these six would probably cover it best. You know, you could talk about the great current RPO numbers, $1.5 billion. I think if you've heard me talk about current RPO, I'm gonna give you the obligatory, "I think this is the best forward-looking metric out there." You notice calculated billings is not on there for a reason. Current RPO continues to be that best forward-looking metric. You can look at the total RPO number, you could look at net retention, total customers, the gross margins, everything.
We've built a very strong foundation. Just like I said, it's all about that strong foundation, so what we can build from here, right? That $80 billion TAM. As you heard Todd talk about earlier today, our revenue guidance for FY 2023, a little bit north of $1.8 billion. That is a rounding error compared to the $80 billion opportunity. We believe our foundation is setting us up to be able to go after that opportunity. Let's dive in a little bit about one of those metrics, net retention. It's one of my favorite metrics. I think a lot of you like it as well. If you look at the last several quarters we've got here on this slide, we've been a little bit north of 120%.
I wanna be clear, that's above our stated guidance in the past. We think that it should travel in the 115-120, so we're really pleased with what we've been able to produce over the last several quarters. That's a testament to the land and expand that we'll talk about a little bit over the next few slides. I think it's more important if you look at the gross retention that you see on the slide. It's been consistently, over this timeframe, in the mid-90s. I fundamentally believe we do not have a great net retention number like this if we do not deliver a great gross retention. Because you earn the right to an upsell by being able to deliver on the promise to our customers, and that's part of who we are as a company.
One of the company values that we have here is love our customers. You can see it through delivering customer value, customer success, delivering on that initial promise. If you don't deliver on that initial promise, you don't get great gross retention numbers like this, and you don't get the opportunity to upsell those customers. It's crucial to how we operate. Love our customers is a key company value. Every day in, day out, we do this, and you see the results in these great gross retention and great net retention results. Let's twist the math a little bit and look at some of the cohorts, right? This is basically just another version of net retention, but it's a customer cohort. When you joined us, what were you spending in the beginning? What are you spending now?
Let's take an example of FY 2014. It's the very bottom, what is that, greenish color, on the chart. This is inclusive of Auth0. Let's pretend, like a very theoretical example, that all of the customers who signed up in FY 2014 were spending $1 with us. They're now spending $3.50 with us, a testament to that strong land and expand. This includes the attrition. This doesn't just include customers that are still customers today. As you saw on the prior slide, our gross retention is very high, which means we don't lose customers too often. If you started, you know, like I said, if the group started with $1 in FY 2014, now they're $3.50.
If you look at FY 2015, it's $1 turns into $3.07. The interesting thing about this is if you look at each of the CAGRs, I'm sure you guys are all pretty quick with math, the CAGRs of a lot of these cohorts, they all travel in a very similar path, whether it's over time or in certain time frames. I think that's a testament to what I just said. When you love your customers, you drive customer value, you drive customer success, you see numbers like this. Personally, I'm very proud of this chart 'cause you can see the consistency in our land and expand over time. It tends to repeat itself. Once we get a customer in, we drive that value, we tend to upsell, we tend to drive that customer success.
Let's look at another cohort that's very important to us. It's really the large customers. I think a lot of you have seen these stats. First two columns, just to be clear, exclude Auth0. The second two columns include Auth0. But the story remains the same. If you look at the growth rates on these numbers, doesn't matter which cohort you look at, 100K, 500K, $1 million, all of them outpace the total customer count growth of the company. Yes, we're proud of the 16,400+ customers we have, but we are also very proud of these numbers.
Because if you think about what we've talked about over the last few hours, and really, if you saw the keynote this morning, if we wanna fulfill this desire, this potential of being a primary cloud, we can't just service small customers, we can't just service medium-sized customers, we have to also do with large customers. It's important for us to focus on this. You can see the results. We've done quite a good job over the last several years here, and we continue to invest here and continue to focus on this 'cause this is part of fulfilling that potential that we have as a company. The other thing I might say about this group is, clearly, we don't all start with a customer that says, "Oh, they're greater than 100K," and then they just stay there.
I've talked about the land and expand. A lot of these customers start below 100K and then end up above 100K because of the land and expand. Start below 500K and be able to upsell beyond that. There's a lot of evidence in that, and we'll see a little bit more of that as we go through the presentation. Let's dive into a couple of other cohorts in terms of the large customers. We're proud to say today that we've got half of the Fortune 500. We've got about 70% or greater than 70% of the Fortune 100 that we can count as customers. For the Global 2000, we can count 33% of the Global 2000 as customers today.
I think there's a couple things I wanna make sure that you understand, though. You can see the title on the slide. Yes, we count these customers as customers today, but we're not saying that they're fully penetrated. In fact, the vast majority of these customers are just scratching the surface within the opportunity. Yes, the average size of these customers is significantly larger than the average customer across the total company, but the number of identity use cases that we can still address across this group is staggering. Yes, we're proud of these numbers, but there's a lot to work on. If you saw the slides prior, if you remember the slides prior about how we land and expand, we're gonna run the exact same play in this group.
We don't go into these big companies and say, "Hey, lift and replace everything." We go in with a small implementation. We drive success, we drive value, we get the opportunity at the next identity use case. That's what we're gonna do with this group as well. The other thing I wanna point out here is you'll notice that a US-based metric, Fortune 100 and Fortune 500, we have significantly more penetration in terms of number of customers relative to the Global 2000, which is a metric that has a majority of customers outside the United States. That's why you've heard us talk about in recent quarters about global acceleration. You can tell when we focus on a region, we do well.
We just need to do the same thing outside the United States, and that's why we're continuing to invest from a global perspective. Now, for those of you who've been following this story for a while, you'll recognize this slide. We've been using this one for a while. It is the top 25 customers that we can count as customers today. What you can see here on the first blue box is when they became a customer. The orange box is all the incremental ACV or upsells. There is a lot of orange on the page. You can see in our largest customers, we do a tremendous amount of upselling. The final part of the slide here, you'll see the green box is when they became a million-dollar customer. There's a couple things I wanna make sure that you see here.
One, in a lot of cases, our biggest customers started really small. The other thing is, we also are landing with bigger customers these days. You can see that the green box is earlier in the history of a lot of these customers now. The fact remains the same. They still upsell a tremendous amount after even landing with million-dollar ACV contracts. Then the second thing, take a look. I know the font's a little bit small, but take a look at the industry next to each one of these customers. It's pretty diverse. That's not the only place that's diverse. Let's look at the top 10 industries by ACV. This is in alphabetical order. If you see, these are our top 10 industries.
The important fact on the slide is that none of them are greater than 10% of the ACV in the entire book of business. There's a reason for that, and you've heard us talk about it for the last couple hours. Identity is a universal problem. It's not an industry problem. It's not a U.S. versus international problem. It's not a big versus small company problem. It is a universal problem, and you can see that squarely by looking at this slide. All right. We've talked a lot about top line cohorts, land and expand, a lot of success there. Let's talk about profitability. If you flash back to FY 2017, fiscal year 2017, the year two months before we went public, our free cash flow margin was negative 33%.
This year, if you paid attention to the commentary in the latest earnings call, I said low single digits% and positive free cash flow. If you take point A and point B and do some simple math, that's 600 basis points of average improvement in free cash flow margin over a six-year horizon. That's not where we're gonna finish. We're gonna continue to improve profitability. You can see on the bottom right-hand side of the slide, we're committing to you in FY 2024, we're gonna improve both free cash flow margin and non-GAAP operating margin. It's not just about FY 2024. We've been doing this with our free cash flow margin. We're gonna continue to do that past FY 2024. It's not just about FY 2024 improvements, about setting a glide path for FY 2025 and beyond.
Another topic I wanna talk with all of you about is around dilution and stock-based compensation. Before I get into dilution and stock-based compensation, I wanna remind everyone how we compensate our employees. We do it through a mix, like a lot of tech companies, of cash, so salary and bonus, and equity. The equity component hits dilution and stock-based compensation. Over the years, we've changed that mix. If you look back prior to being in a public company, clearly it was weighted on the side of equity and less so on the cash side, right? As we have matured as a company, you can see us balancing the two because that's what you do, and we're gonna continue to do that.
If you remember several years ago, we talked about we believe the right balance there would produce about 2%-3% net burn, and that's what we've produced over the last several years since we've been a public company. The important thing to factor in here is when we think about this balance between cash and equity, we're thinking about it in two lenses. One, attract the best and brightest to be able to go after this massive market opportunity, but also retain them. Then also do the fiscally responsible thing from a company perspective. You can see us delivering on our promise over the last several years around net burn in terms of dilution.
Now, given the stock price, you know, compression over the last 6-12 months, we do believe in the near term that dilution will rise by a few points. That doesn't mean we're not managing this. We've been managing this for years, as I just described. We're gonna continue to manage to do the right thing for the employee, but also the right thing fiscally responsible from a company perspective. As dilution goes, you can see, you guys can read the title, we're going to continue to work this down over time because that balance between cash and equity for our compensation programs will change, and we will improve on dilution. That will have a direct effect on your SBC expense as a percentage of revenue. You'll see that be driven down over time as well.
Now, the other thing on stock-based compensation expense I wanted to cover with all of you was the impact associated with Auth0. We have talked about it being material over the last few quarters. I wanted to put some exact numbers on there for each of you so you can actually see it. You can see it is very material as a percentage of the revenue number. We do expect this to be driven down over time as well. All right. One of the last topics here will be our a few things on capital allocation. Frankly, there's really not much to report here. Fairly similar to what we've said in the past, we're gonna maintain a strong balance sheet. We're gonna continue to invest in the business.
In terms of tuck-in M&A, if we find something that makes a lot of financial sense that can accelerate our product roadmap, we will obviously evaluate opportunities like that. Now, for our final topic, something that's near and dear to my heart, to the management team's heart, and frankly, the entire company is ESG. We have made a very big effort on this over the last couple years to be able to set this up, to be able to lay the foundation for a great program. You can see that in the work that we've done. You've seen the science-based targets. You've seen the human rights impact assessment that we released for the first time this year and keeping all of you up to date in terms of the ESG fact sheet. This is something we've, like I said, set the foundation.
We've done a lot of work here. There's still a lot of work to do, but I'm extremely proud of the team who's been working on this. They've been doing a great job, and we're gonna continue to make progress here. To really wrap it up here, I wanna make sure there's a couple things that all of you remember. We've talked about how identity is critically important. There's a massive opportunity out there. It's a universal opportunity. You just heard me talk about it. It doesn't matter if your segment, doesn't matter if you're U.S. versus international, doesn't matter how big or small you are.
The good news is, we've got the platform to cover the most identity use cases out there, whether it be on the workforce side, which you heard Sagnik talk about, or the customer identity side, which you heard Eugenio talk about. We've got a great product to be able to go after that massive market opportunity. For my presentation, remember two things, strong foundation and a very attractive long-term financial profile. With that, I'm gonna invite my fellow management team members up here, and we're gonna do some Q&A for you. Take questions in the room. Raise your hands. First question.
Thank you very much. Appreciate the details. Adam Tindle, Raymond James. Susan, I wanted to start with you. You alluded to some of this quickly in your presentation, but on the last earnings call, sales rep attrition was highlighted as one of the primary reasons for the lower billings outlook. Can you comment on the state of the sales force? Would be great if you could go into specifics on Okta versus Auth0, and then I have a follow-up, please.
Sure. As I mentioned, we've seen a massive improvement in the attrition in Q3. We believe that all of the things that I mentioned that we put in place have had an impact. We've also gotten that type of feedback from the reps themselves, from the account executives. As far as Auth0 versus Okta, I mean, it's a blended sales force now. I think that we definitely are tracking things like who has sold, you know, which products and making sure that they're cross-selling the product that they didn't know, and we're seeing early strong indications in that as well.
Okay. I guess.
If I could just add to that. Sorry. I didn't mean to interrupt you. I think that we're really proactive about making sure we're set up for long-term success. It's not like the attrition gets a little bit better, and we're taking victory laps. I think what's going on in the world in terms of the hiring market might be contributing to some of that. We're making sure we double down on the long-term things we know we need to do, whether it's building the best products, whether it's making sure everyone sees the vision clearly and on and on. It's good progress, but like I said, we're not high-fiving ourselves around the block.
Understood. Brett talked about moderating headcount growth. Susan, this one's still for you. Do you have enough productive sales capacity given the attrition that you're experiencing right now, the improvement in attrition to still achieve that prior 30%-35% revenue growth, or is that something you think will have to be built back?
We're in the quiet period.
Quiet period.
So-
Yeah, for sure.
Good try, Adam.
First of all, we take financial outlook and forward-looking comments very, very seriously, and we know they're valuable. We also wanted to have this conversation right when we had Oktane. We realize it's not ideal to do this in a quiet period, but if we could really stick to the high level strategy and don't put us in a compromising position, we'd really appreciate that.
Okay.
Hi, good afternoon. Brian Essex from JP Morgan.
Oh, yeah, Brian.
Oh, right here. Sorry.
Yes. Cool.
Yeah, let me know if I'm out of bounds with this, but just want to understand, you know, where you are with the latest version of your OIE operating system, how many of your customers, or if maybe you can get a sense of your install base that's migrated over.
Yeah, I'm happy to talk about that, and Sagnik is running the Workforce Identity Cloud. He's an expert on this as well.
Okta Identity Engine, I think, is one of the most important parts of the workforce identity story, and probably the most maybe we could be more clear about talking about what it enables. It's been a journey over the last few years, and that's because it's really an important driver. It's think about it as we, three and a half years ago, we rethought what a workforce identity cloud would look like if we started at the time. As Okta evolved, in the history of Okta, it was really very quick to set up, and it was very quick to get value from. The trade-off there was sometimes it was too rigid in terms of what it did.
Okta Identity Engine is rethinking from a componentization and flexibility perspective, what you would need from a Workforce Identity Cloud if you did it today. It enables things like much better policy on your application. You could very, at a custom level, say these kinds of apps need these kinds of authentication factors, these other kinds need a different policy layer, and it's quite powerful. We've made a ton of progress on not only for new customers for coming up on a year, but also importantly, upgrading this customer base. This customer base you saw that has amazing gross retention, powerful upsells, cohorts increasing over time. It's a big priority to get the OIE upgrades happening. They're progressing very strongly. We're very happy with it. Big customers.
I'm the executive sponsor on a bunch of big accounts, and they're all upgraded and showing a ton of progress. We haven't broken out the numbers and the pacing, but it's something that we should consider actually. I'll take your question as feedback that we could maybe be more detailed there in the future. Do you have anything to add there, Sagnik Nandy?
Yeah, a few things maybe. We shared, like, we have several thousand customers already on OIE, so we shared that in the deck. You can think of it broadly in three different categories. New customers who are by default on OIE, and we are seeing a vast majority of them stick to OIE. Maybe a very, very small sliver where there might be some missing feature, but that's automatically increasing the OIE pool. We have built tools for automatic migration, and we've already converted a bunch of existing customers using the automated tools, including some big ones. As we leverage that tooling, we'll see a lot more.
Then there's a third pool where we know there are specific things where there might be a few remaining features or some things work slightly differently, and there we are chipping through that list. As well as in some cases, we feel what we have, the new thing, it might just be just desire to stick to old things, and over time, like, that'll automatically happen. We are investing in all three buckets, so that's happening.
Yeah. A real specific example. I want to talk in specifics so you guys get a good understanding. Like a feature that we recently made compatible with OIE was the rich command line interface into AWS. Before we did that, all the thousands of customers that were using that rich command line interface into AWS, you couldn't use it with OIE 'cause we hadn't upgraded, we hadn't made it work with OIE. That's one we knocked down recently, so that enabled a whole new cohort to upgrade. It's things like this. We're into pretty fine-grained details in getting the majority of customers over there.
Maybe just a quick follow-up. Like, how important is that for the adoption of your two cloud strategy, and is that an accelerant to attach rates on your platform? Then I'll pass the line.
I think it's very important. It's very important because we have a ton of innovation from FastPass to things like this powerful policy engine for contextual access that are enabled by OIE. A couple things that aren't actually enabled by OIE are things like governance and workflows and privilege. Those actually, they're kind of at a different layer of the stack. You can use Lifecycle Management or the Workflows capability or Governance. It doesn't matter if you have OIE or not. Again, everyone's going to OIE, so it's not gonna matter over time either way.
A good nice thing is we are increasingly hearing from customers reaching out to us saying, "Hey, we aren't on OIE. Can you get us on OIE?" And that's where the tooling and a lot of these things is additionally helping. The momentum's there.
Great. Thanks. Brad Zelnick with Deutsche Bank. Thank you so much for hosting a great day. Brett, I want to ask a longer term financial model question, so cut me off if I'm going out of bounds relative to quiet period. Can you just remind us of your longer term targets that you have out there? And as you talk about the leverage in the model beyond fiscal 2024, can you just maybe double-click on the sources of where we should expect that to come from? And the rate of investment from here all the way, you know, to 2024 and beyond that you're gonna pursue for this massive $80 billion opportunity.
I can make a quick comment, and then you can
All right.
You can fill in all the details or some details, Brett. When I think about the business, and this has been true, some of you, we've been friends for over five years since we've been public, so you've heard me say this before. If you look at our business, the gross margin is healthy. It's getting better, but it's already healthy. If you look at the biggest lever on cash flow and profitability over time, it's really the sales and marketing spend. That's very related to how you spend money in a given year for growth in the out years.
In our business and in our model, since the retention and the upsells are so healthy, there's a very natural leverage between investment in sales and marketing for the out year growth and how much growth you get in those years, and how much cash you burn or generate in a given year. We have a natural lever there that sets us up for a lot of flexibility and success there as we balance growth with cash flow, which leads to profit over time.
Yeah, Brad , obviously, given we're in the quiet period, I'll defer your question until November 30th, 'cause obviously we've got the older model out there, but we said we're gonna reevaluate it and come back to you at Q3 earnings.
I think it is important to, at a high level, big picture, like every other organization in the world, it is a different world than it was a year ago. It's a different world, full stop. I understand that deeply. The Okta board of directors understands that deeply, and the management team understands it deeply. Money is no longer free. What that means for us is we have to be really disciplined about our investments and making sure they reach over the ROI hurdle. A year ago, it was different. It was like the opportunity cost was zero because we weren't gonna make anything on the money anyways. Now it's these have to drive our strategy. They have to really move the needle because money's not free.
Makes total sense. Maybe 'cause that was a bum question, I'll ask another one.
You get one bum question.
Yeah, yeah.
Two dumb questions and you're out.
You get one swing, and then that's it. One more. I loved all the disclosure about large accounts, the top 25 accounts, which we've seen over time. If we just think about, again, the massive $80 billion opportunity, how under-penetrated you are, yet you claim over 50% of the Fortune 500, I think it was even greater of the Fortune 100. Of the entire identity spend within each of those accounts, you're way under-penetrated relative to the other solutions that they have in these very large enterprises. How do you get more of the total identity spend? I'll throw that as a jump ball to all of you, but it seems massive, just relative to Alterian.
Yeah. I think the main thing is you gotta cover all the use cases. One of the biggest parts of spend is it's not even reported 'cause it's opportunity costs. These companies are doing it themselves. We have a great customer that I've worked with closely, and we're the provider for Workforce Identity. We've tried over the years to win the customer identity business, but it was the amazing IT team at this company going to the engineering team and saying, "Use Okta Workforce for customer identity." I used to run engineering. I know that the engineering folks wanna build it themselves. Like, Sagnik wants, and Eugenio, they wanna build everything themselves.
Now we have this purpose-built platform that was built for engineering teams to do exactly what they need to do without doing too much. That's gonna open up a lot of spend over time. Another thing that's a very important dynamic is for a lot of companies, using a cloud service for identity and security is new. How do we overcome that? Well, first, part of it is just eventually it's gonna happen, and we have to be the leading independent neutral vendor and be ready. Part of it is we have to do a better job getting our vision and our message out there. Hopefully, we're doing a good job at Oktane this week.
When we do a keynote where it's like when you think about your identity challenges, all these questions, these eight questions. Are they all answered yes? Let's think about how we could answer them. That's all designed to get this vision out there. Then the last thing is the products keep getting better. We talked about the OIE upgrade and how it enables better passwordless, better policies, better integration to everything on the client, from EDR vendors to other risk signals coming off the client. The product has to get better. I think doing all those things, it's just a matter of time.
Hi, guys. Rob Owens from Piper Sandler.
Hey, Rob.
Could you elaborate a little bit on the evolution of the partner ecosystem? Help us understand what this mix shift looks like historically, not in Q3. I'm gonna try and get this done in one question. Maybe if there's any differences in contribution margin.
Sure. As I mentioned, we have basically broadened the ecosystem. Resellers were the initial partner because it was all about extending our reach. We still have resellers. We still have you know many parts of the world as well as certain segments where we rely heavily on resellers. I think you heard Chris from AWS talk about the fact too that we're working with these you know born-in-the-cloud-type resellers that Amazon has really attracted as well. They're still part of it. As I said, the global SIs, if you think about the SIs' practice and what they want, right? They want long-term engagements. These digital transformations that are being driven you know from the Customer Identity Cloud, those are very long engagements.
That's why we're starting to see so much traction with the SIs wanting to actually, you know, work to go to market with us and starting to build practices around us. In terms of the contribution margin, I don't have any comment on that one.
One thing that from my perspective that might be helpful is, like a lot of areas in the company, this is no exception. We're taking a very studious look at what has worked and what's the highest amount of ROI, and we're doubling down on that. You're seeing more strategic focus on the things that are really gonna move the needle 'cause, like I said, money's not free. We have to make sure we double down on what's working.
Over here.
Thanks, everybody. Great to see everybody today. I think there's a question maybe for both Eugenio and for Susan. What maybe we could talk to the history of the sales treatment of the sales force separately, somewhat then integrated. Initially, some of the strengths of going separately was the strength of Auth0 in selling to the developer and Okta selling to security. How did that evolve, and why was it the right time to switch? Why have you developed the sales force such that one sales force is sufficient at this point?
Do you wanna start or you want me to start? Okay. Let me just start with, you know, the. There was a very big imbalance, first of all, on how many go-to-market reps there were from an Okta perspective versus an Auth0 perspective. And what I talked about today in my presentation, right, is that fundamentally we see the shift in the way that we're selling focused on business outcomes. Again, we did deeply specialize on the sales engineering side, and that's a big part of where Eugenio's specialization occurred as well. The other thing I will tell you is the developer motion, that runs out of the marketing organization, and there's still a big focus there.
Then we have our emerging reps who we have now enabled to actually understand how to mine all of those developer up motions. That's a separate motion I didn't call out here today, but that is happening. What we did was we took the same motion that Auth0 was running, and we put our emerging reps focused on that.
Yeah. That has not gone away. We still have a free, you know, free trial, freemium motion, self-service that I mentioned in my presentation. From one data model is exhausted, there's like that transition from self-service into enterprise. That theme, you know, it's something that we are investing, we're doing more, and we have a further specialization in that specific role, which is looking at companies that are just, you know, ready to make that jump. We have specific programs as well, et cetera. But in Susan St. Ledger's team, there's a specific group of people that all they do is precisely that, looking at what are the upgrade opportunities. I mentioned before, like 45% or so of new logos in customer identity are coming from that pool of users. The self-service, freemium, trial, product-led growth, that still sits in the product unit. It's part of my organization.
We've talked about before on the earnings call, if we had this all to do over again, we would probably wait another year before we fully integrated the sales teams because of all the things we talked about, the systems issues and the list we went through. That doesn't mean it's not the right strategy because we are trying to ultimately we wanna sell identity to the CEO and the board, and that's best done with one sales rep that can have a broad conversation. Well, with technical specialization, of course, but one broad conversation. That's where the market's going. We're building this primary cloud, and that is sold at a different level. Every other company that's tried to sell identity, it's been at a tool and a lower level to a practitioner or someone that was trying to solve a tactical problem.
We're trying to change the world. We're trying to say, "Listen, this is one of the most five or six vendor choices you're gonna make. We have this broad coverage across all of these use cases," and that's where we're going. I definitely acknowledge the mistake I made in making the decision to combine the sales teams when we did. It probably, in retrospect, it would have been done a little bit later, but it doesn't mean the direction where we are is the wrong direction.
Maybe another kind of point of clarification is that there's no developer in the world with $1 million of budget for identity. That doesn't exist. At most, you will have like somebody with $50, you know, per month to play around with. It's a very important component because they are the conduit to the budget owner, right? You still need to close a deal that's anywhere over $50 per month, you still need the, you know, knowledge and the discipline of a sales organization.
Mm-hmm.
Right? That's, you know, that. You cannot get away with that.
Thanks for the detailed response, so no follow-up. I forgot to do my sell-side ad thing. This is Michael Turits from KeyBanc. Thank you.
I was gonna do it for you.
How you doing? This is Joel Fishbein from Truist Securities.
All right, Joel. Hey, Joel.
How's it going? Follow-up to Michael's question, I think it's just a logical extension. As you are now gonna be selling governance and PAM, not you—normally the same buyer in the organization, just how should we be thinking about the sales force going with that? Are you gonna go in with a specialized sales force in those two areas, number one? Number two, 'cause the competitive dynamics are much different also. Second thing is, how are you gonna be charging for those, right? Because I think that that's a little bit of a gray area now that you have a holistic solution and a converged identity. Thank you.
You wanna start that one?
Sure. From an IGA perspective, I think that one, we look at that as just a derivative of identity. Not to oversimplify it, but if you think about the governance aspect of it, we already know who should have access, we know who did access, and now we're running the workflows and the reporting. That one is straight up just an extension of identity. From a PAM perspective, I think we're gonna have to take a hard look at that. The product's evolving, right? The first part of the product coming out is very much around privileged access for Kubernetes and servers. But I think the more we expand the PAM strategy, we'll have to take a hard look at that.
We'll work closely with Sagnik Nandy and team on that. I think the buyer you add obviously on IGA is the risk compliance buyer, but I still think a lot of it is the CIO.
I think, one thing worth calling out is with things like PAM, IGA, we are a good representation of the future buyer ourselves. One of the things we do very seriously is try to dog food it ourselves, and it's a great way of finding product gaps that we can then build for. Like, we take reliability, we take servers very, very seriously. As we try to play around with many of these solutions, we know exactly where the gaps are. We know, like, how we as buyers would react to it, and that's been a great input into the whole product development process.
Hi, Keith Bachman from Bank of Montreal. I'm not Michael Turits from KeyBanc Capital Markets. Todd, I wanna direct this to you. On the one side, you've painted a compelling vision over the next couple years for the importance of identity, and I think Okta still remains the leader in a very important market. On the other side, by your own admission, you've had a number of execution-related issues over the last couple years. This morning, you announced that PAM's further delayed, candidly, and the sales force attrition started in 2021. It also accelerated, I think, with the merger of Auth0 and then some of the merger integration issues you mentioned.
The stock has moved from a 30x multiple to a 3x multiple, and clearly you're not getting credit for the technology and the market opportunity you have, and execution's been a part of that. How as an organization are you trying to improve the execution-related capabilities that Okta has as you look at this tremendous opportunity? One of the key things I just throw out there is why not hire a world-class COO to help alleviate the burden of this whole go-to-market and the opportunities? Then I have a follow-up.
I think it is the culture of just admitting your mistakes and working as a team to fix them with an honesty and hard work and diligence about the future. We look, you know. Thanks for your suggestion about how to formulate the management team, and I appreciate all suggestions, but we also look at personnel and organization very broadly. Down the organization, up the organization, we wanna put the right internal folks in the right jobs. We wanna put the right external folks in the right jobs. We're really trying to balance off people that know about our market with people that might bring a fresh perspective, so we're kinda open to all options. I think that what really keeps people excited is this vision about the future. People wanna work on the most strategic things. People wanna make a difference for customers.
The most important part of my job is making sure people see this vision, and I work very hard on that internally and externally. Oktane's a great example of that. Once the vision's in place, it's the strategy. Why does it make sense to go after this market with two clouds of specialized capabilities? Why does it level up to this one strategy that is the cross-use case coverage for identity, and how likely is that to lead us into this most strategic vendor conversation? We spend a lot of time on that as well. We're working hard, and believe me, we look at the scoreboard more than anyone.
You know, sometimes it can be discouraging, but also can be very motivating because I'm fired up by a challenge, and I think the entire management team is fired up by a challenge as well. When we look back on this in five years, we're gonna all be, I think, celebrating a lot of success.
I can speak for our pocket. Like, what you're suggesting, I think we are taking scaling and efficiency very seriously. Like, we have an internal effort called, like, Scaling Our Excellence. Like, things we do well, how can we do well with, like, half the resources, one-fourth the resources? There's a bunch of efforts happening focused on that. Taking the specific example of PAM, I'd like to believe PAM's making a lot more progress in the last, like, three or four or five, six months than it did ever before. One of the fundamental shifts we made was from a PAM team that was structurally organized horizontally, so there were a whole bunch of skill sets. Like, so there could be a team focused on identity. There could be a team focused on admin management.
There could be a team focused on a whole bunch of, like, specific functions. We brought it all together under a single leader. That made, like, decision-making, hiring, kind of filling up gaps in roles, like, even the tech stack selection. All these things were made a lot more autonomously. People were empowered, and that's really impacting. We are making a bunch of changes like that. I think the world we are moving towards, increasingly more independent units will be held accountable for their delivery, and that'll automatically influence and improve efficiency and execution.
Okay. Thank you. I had a follow-up. Todd, it sure seems like you have the right vision and strategy. It just seems like some of the execution pieces haven't worked as well.
Yeah. I would just add that I think the clarity and the vision execution is what we're seeing. The clarity and the vision and the strategy is what's helping us now drive the execution, right? Getting to the point that we are now to know how the two clouds are gonna help accelerate and benefit, you know, our customers together, that was, you know, work in progress. There was certainly confusion when we first came together. Integrations are hard, not just on the system side, but, you know, we had to get this. I appreciate you saying that the clarity is there now, 'cause we agree, and I think my sales teams are super excited about it. Bringing together the product marketing teams to now drive that clarity and the strategy and vision has been a big win too.
We do appreciate the feedback though. We take it seriously.
No, it doesn't, but I do want to ask a follow-up, Susan, if I could for you. Just you, on your presentation. Just wanna clarify. You're signaling that you're, it sounds like, emphasizing more the channel opportunities or partner opportunities. Was that a broad statement, or were you highlighting the SIs and the MSPs? Because some of the history when you were at Splunk and here, your leadership has been a little less partner-enabled and more kind of direct. I just wasn't sure if I quite got the message there, and then I'll cede the floor. Many thanks.
It's about the partner ecosystem, right? That doesn't mean, like, if you look at SIs, that doesn't mean that we're gonna be indirect, right? SIs are driving these. What we're saying is that the identity has gotten to be such a strategic level, and when you're talking about identity across the enterprise, so enterprise-wide, both on the customer identity side and the workforce identity side, those. Almost every customer has some sort of SI in there, whether it's a boutique or a global, to have those discussions. You know, we'll be the identity experts, and we'll help with the enterprise architecture, but they're generally the ones driving the strategy. That's why they've become so important.
The MSPs, again, it's the global expansion that's driving the need for the MSPs because in certain parts of the world, Japan, Canada, France, you know, that's a really big motion. It will benefit us to build out that motion, especially for the, you know, it's the long tail in the commercial segment. That's why you're seeing the explosion in our betting on the partner ecosystem. It's not to say that we're becoming an indirect sales force. We're gonna continue to leverage resellers where it makes sense, for sure, and we do that a lot in commercial markets, and we do that where we need reach into certain countries. I think it's just the maturity of the company, and that's what you're starting to see now.
Hi. Joe Gallo from Jefferies, right here. Appreciate the question, and appreciate the mid-nineties gross retention rate disclosure. How has that trended the past few quarters? Has that seen any headwinds related to macro? Your net retention rate has been very, very consistent the last couple years. How should we think about that split between user expansion, which might be more challenged in this environment, versus product upsell historically? Thanks.
Yeah. The gross retention mid-90s was over the entire timeframe that we showed you there. You know, if you think it was, like, eight or nine quarters that we showed you there. In terms of the mix, I mean, it's a mix of both, right? It's been products and users for years. The trend has been fairly similar. Yeah, I mean, how it goes with the macro, well, obviously we're not gonna be immune, right? We have to be thoughtful about that. We're gonna keep delivering customer success and customer value and, you know, you know, keep plodding forward with it.
It's Peter Levine with Evercore ISI. May I throw Eugenio into the conversation. You highlighted 48,000 active free subscriptions on the Auth0 side. Why not implement more paywalls, limit feature sets? Maybe talk through kinda what you're doing different today to convert some of these users.
We are constantly tweaking and changing and experimenting how to make improve our conversion rates for that massive amount of free trials. We also have, like, tens of thousands, you know, that are coming up all the time. That's what product-led growth is about. It's about, like, injecting, like, experiments all the time to make sure that those conversions rate improve. We have a dedicated team that all they do is exactly that.
Cool. Just the last follow-up is, you know, how much of your growth is driven by, I think, user expansion? Like, we've heard from other software companies called out a slowdown given the macro. I mean, I think so given some customers might be pushing back larger decisions, you know, are you able to really toggle your sales force to kinda go back to that base? Just curious to know how you guys are thinking about some of the uncertainty that we're facing.
Are you talking about specifically in Customer Identity?
I think it's both.
On Customer Identity, we see the same, you know, growth patterns of landing and expanding. Typically, we go into a smaller project, and then we prove success there. We launched, you know, there's a big retailer that comes to mind. They started. We quoted the deal originally for 20+ countries. It was, you know, $2 million opportunity. They said, "No, you know, we've been burned in the past with Identity. We're gonna take the entire year to do six countries." We say, "Okay, great." That was $300,000 deal. Then, three months later, we were live in all six countries. They say, "Oh, great.
Now we can go to maybe in the next 10 countries." By, in the same year, within a nine-month period, we were live in 26 countries. That was. It's another great story. The same trajectories that Brett was showing in terms of cohorts expansion and user expansion, they are very, very similar. Of course, in Customer Identity, some of the numbers are on different scales because, you know, in a company, if you have, like, 10,000 employees, that's already a large company, you know?
You might go from a couple thousands to an extra couple thousands. In Customer Identity, the volumes tend to be way bigger because, you know, you might launch with a hundred thousand users, which is already a big number, and then all of a sudden, if you're successful, you can have millions of users. The scale patterns are slightly different on, like, metrics, but they follow more or less the same curves.
Yeah, on the overall business, I think you've heard me say this over the years, which is on the Workforce side, the value is correlated with the number of users. The more users, all things being equal, they'll pay more for that. But as that changes, whether it's a smaller company or it's a big company or whatever the company grows or shrinks 'cause of macro, there's other use cases we can sell them, whether it's IGA and Privileged Access or right now Advanced Server Access, which is a precursor to that. Then they can also, it's very common, especially in a larger account. Brett talked about some of the biggest accounts in the world. It's not true that they adopt all of their users right out of the gate. You can get expansion with departments or companies.
A very common success pattern for us in the largest enterprises in the world is they buy companies that use Okta, and they buy enough companies that use Okta, it's very clear to them in stark relief that it works much better than what they have centrally. There's a big upsell enterprise-wide. My point is that thinking about the business as just correlated with worker count is that. That is a driver for sure, but there's all these other variables, whether it's the customer use case, whether it's more products inside of Workforce, whether it's departments of companies that are expanding the use across. There's lots of different variables going on there.
Hi. It's John DiFucci with Guggenheim. I think everybody here sort of recognizes that Okta sort of attained. How you doing?
I found you finally.
Yeah, I'm with Rodney Dangerfield back here. Okta sort of attained the status of great software company with workforce identity, your act one, and you frankly knocked it out of the park with that. There aren't very many companies that have a successful act two. They sort of live on that act one, and they're still a great company. I want to focus a little bit on product 'cause I think that's what drives an act two. Sagnik talked about excitement about IGA going into next year. I'm just curious, does that imply there's gonna be some incremental functionality around IGA, and can you talk even generally about what that might be?
If there are things that are needed, you know, PAM was brought up a couple of times by Keith and others, and it's kind of on the way. Todd, you and I have talked about vault functionality that's needed in that. Is there like, should you just buy that? Like, is that functionality you can buy, a little sort of a technology tuck-in just to speed the time to market? 'Cause it sounds like customers are waiting for it. Obviously, we're waiting for it. But I don't know if you can just sort of or is it important that it has to be built in-house?
Believe me, we're very aggressive about looking for technology tuck-ins. We've had a lot of success with them, whether it's really the underpinnings of the Advanced Server Access product or the start of our workflow services, which is an amazing success for the company in terms of not only just upsells, but also doing more for our customers in terms of automating the complete business process. The other example is we have the core part of some of the human workflow elements of IGA are from a company we bought called It was atSpoke about two years ago. We're very aggressive about these tuck-ins. The reality is that in the privileged access market, there wasn't a lot of good tech that fit in with our cloud-centric model. There's. We're not trying to do a roll up here of PAM.
Mm-hmm.
We think there's a reason why the PAM market is not bigger than it is right now. It's 'cause there hasn't been a great product. We looked around, and we found that we think we can build something better, so that's our approach there. I also think one of the things that's mischaracterized, especially about Okta Identity Governance, is that people think it's a, it's like a toe in the water or an incomplete solution. It's a very powerful, complete solution. I think we're very optimistic about what it could turn into as it's been generally available North America for a few months now, and then as Sagnik Nandy announced in the keynote, global GA by the end of the year.
Okay.
Yeah. I think overall for both those pieces, we have most of the fundamental building blocks in place right now. The big focus next year will be making it more thorough and going for, like, locking down many of the end-to-end, in-depth use cases. Let's say for something like Okta Identity Governance, better support for more fine-grained entitlements. Like, that'll make it, like, specific integrations even more richer.
Again, for PAM, we have many of the key blocks we mentioned today, like vaulting will be part of it. Those are there. Now, which integrations do you do? Like, you know, Kubernetes, we talked about, like, next, like, big specific database providers, et cetera. Like, those are the ones where you'll see a lot more focus. I think for both these pieces, the fundamental building blocks are now ready, and that's why we feel so excited that we can then do many things on top of it.
Because we have this kind of solid architectural underpinning that we didn't, in these cases, spread ourselves too thinly with buying too much dispersed technology, one of the things you ask about, will there be enhancements? Absolutely, yes. That's part of the train we're on. It's like we can deliver these enhancements continuously, which is a powerful position to be in.
Great. If I could just, sort of sticking with product and really architecture, I'm gonna quote the go-to-market leader. Susan St. Ledger said, "Whether it's workforce identity or customer identity, it's still identity." It sort of makes me wonder, like, I don't wanna belittle the technical challenges, but why two identity clouds, like, for workforce and customer? Is it because the foundations of those solutions are so different, the needs for those are so different? Or is it because Auth0 was an acquisition, and it would just be too difficult to merge those today?
It's a great question, and the answer is because we were leaving too much opportunity on the table, but with having one. We tried to take one cloud and sell it to product and engineering teams and technical people, and we were missing the mark. That's because engineering teams and digital teams and technical teams, they're building it themselves now. Frankly, they don't want something that gets kinda pushed on them by IT or security. It has to be a purpose-built thing for them. John, it's really market-driven. That's the perspective. In terms of technology, I think the wrong strategy right now would be to take these two clouds and merge them together and have a three-year integration project where everyone's figuring out how to optimize the core layers.
A much better strategy is to keep the teams separate and focused on. Remember, the whole strategy is here, be this end-to-end identity provider for every use case across the entire C-suite. To do that, you have to have the best capabilities that the engineering folks, the digital folks, the technical folks love, doesn't do too much, doesn't get in their way, solves their problem. Then where it makes sense to integrate those in the Okta Identity Platform, high-value integrations, that's where we'll focs over time.
Can I add something? Also, when we say this, it's identity, yes, you know, at the end of the day, it's about discriminating whether a user is real or not. That's what it is. But it's like saying, you know, cars. Toyota sells cars, but they have SUVs and vans and sedans, and people who buy a van are not the same who buy a sedan. They buy it for different reasons. It's not just the core capabilities. It might be the same, exact same capabilities.
There's SAML support, you know, the protocol support in both. There's single sign-on in both. There's MFA in both. But they buy for a different reason, for a different purpose. I mentioned before, different scales, different number of users. The seasonality of use is different, but also the evaluation process is different. The way I go around and read the documentation and I explore and I use the product is very different. In the same way, you know, if you're a family, you buy a minivan, you don't buy a sedan. Same thing.
Now, that doesn't mean that Sagnik and I don't talk to each other, and we're just building completely in isolation with each other. Every time, every opportunity we have to not reinvent a wheel, we don't reinvent it anymore. There's a lot of things that we are doing behind the scenes that you don't see or even our customers don't see necessarily. You know, network, edge, infrastructure, like, core vendors that we use for databases, for hosting, for caching, for so many things that now we have teams talking to each other. It's not that we are completely separate and we don't really share learnings, we don't share requirements, we don't share contracts. You know, we don't buy, we don't pay Amazon separately.
There's only one bill coming from Okta, and that gives us economies of scale, gives us a better, you know, pricing, lots of advantages are coming from that. Yet we do have the specialization. The specialization in language, too, 'cause then we talk to different people too, CIOs, marketers. They see identity in different lenses. Make sense?
Thank you.
Hi, it's Gregg Moskowitz from Mizuho.
Hey, Gregg.
Todd, I guess first question, that empty seat beside you, is that to honor Freddy?
Yeah, I was gonna say, did we leave someone out up here? I think it's just, you know, musical chairs. Someone brought an extra chair up here.
Question on the go-to-market and, you know, getting back to a single account exec across both clouds. Naturally, the specialized SEs will help. I'm curious, given that clearly most of your account execs come traditionally from Okta, how is the proficiency with respect to them selling Customer Identity Cloud? Because I think as many of us are aware, you know, talking the talk with a CDO is quite different versus a CIO or a CISO.
Sure. Great question. First of all, remember that a lot of the sales team is new as well, so we did a lot of hiring. It's we put a big focus on sales enablement in the onboarding process, as well as bringing all of the existing reps through it. One of the things that's unique, when you're selling to CDO and CMO, in most cases, they're, you know, consumer experiences. We actually, one of the big things that we did in our new enablement is we taught our reps how to go evaluate, so you can go experience those companies, right? Go experience them in all the channels they have, their apps, their websites, wherever they are.
We actually now have given them all the tools to do the assessments of, you know, how does this compare to other experiences, right? We've had some real early success with that. I think that what that really did was it put this big focus on, you know, again, shifting to outcome, shifting about what CDOs and CMOs are trying to accomplish. Those were the use cases that I laid out, right? With the omni-channel experience, the acquire to convert, you know, single log-in, the loyalty. We're showing them all those repeatable motions. I think, you know, quite frankly, in a lot of cases, it's actually easier for people coming in to now that we have the right enablement to actually learn that motion. Does that make sense?
It does. That's helpful. Just for you, Todd. A few months back, you talked about the traditional Okta Customer Identity Solution and how that was going to be positioned for selling to the extended workforce, so to speak. You know, today we heard a lot about CIC, and it's a very compelling vision. Just wondering if there's any change or any update to the strategy as it relates to getting that core or traditional customer identity technology. Thanks.
Yeah, Okta CIS, it's called the Customer Identity Solution, supported for all customers. We're not making anyone migrate, but Okta Cloud is now Workforce Identity Cloud.
Thank you.
Thank you. Joel Omino here from Citi, here on behalf of Fatima.
Sure.
Thanks for taking the questions. Just the first one on R&D efficiency and then a quick follow-up, if I may. On R&D, from a core technology perspective, is it fair to infer that the Customer Identity Cloud within this 100% is going to be powered by the Auth0 intellectual property? Likewise, the original Okta CIAM is going to go 100% under the Workforce Identity offering. Just any color there and how, what the mechanics there are. Just a follow-up. Thank you.
I think that's the right way to think about it. I would say that there's many customers that are using the Okta CIAM, which is now called Customer Identity Solution, that are still using it for customers. Many of them are actually all along using it for Workforce. They were using it for things that were partner apps or things like dealers and franchisees that is kind of pseudo customer, pseudo partner. Those are all gonna stay on the Customer Identity Solution in Okta, which means that if there's maintenance or bug fixes, those have to happen there. But the go-forward investment in terms of additional R&D is gonna be very focused.
Okay. Thank you. Appreciate the details. Just on the Okta Integration Network, what's your commercialization strategy when you look at SaaS apps and the visibility you have? Particularly, you know, how are you looking at, you know, or where do you aspire to place these SaaS apps? Any specifics on how you're looking at, you know, when, for example, an Atlassian customer, right, is utilizing this integration network and you have visibility on that. Just how you're looking at that and how you're thinking about commercialization there. Thank you.
Well, I'll ask the question in two parts. One is what the commercialization is today, and Eugenio can talk about that. He's the expert there.
Yeah. The SaaS builder is a core user of the platform. The value proposition there is not spending any time building the identity stack yourself. They buy it, companies like Atlassian and any other SaaS build that buy it because they're spending a ridiculous amount of effort just maintaining all their identity stacks, which has evolved over the years. You know, remember, like, you cannot go around and say, "Oh, let's add identity to my app." You cannot ship without identity. Every application in the world has identity of some sort. The core value proposition is say, "Forget about that.
We will take care of all the problems, all the issues, and all the advanced features, and the maintenance over time because, you know, now there's login with Apple, and if you need to add login with Apple, you have to go read the documentation, understand how it works, and yes, it's standards-based, but it has a little bit of Apple sauce as well, so it's not quite exactly the standard.
Did you say applesauce?
Apple sauce.
Applesauce. Yeah.
Very nice.
You know, it's not a standard. It's the standard, but not quite. We allow. We take that burden out of people. Literally with a flip of a switch, they get all the functionality, constant stream of innovation. What they can do now is they remove that concern from their minds, and they can go around and put all those resources to their application. That's the core value proposition for SaaS.
Well, that's definitely an important part of our driver for our business, but we're talking about the next ten years now. Now what we're really excited about beyond that is this vision for this open ecosystem and how Okta the company being on both sides of the interaction between a workforce customer logging into an app that then goes across the wire to a SaaS builder using Customer Identity Cloud to power their identity.
We have a lot of potential in terms of being on both sides of that interaction, and that's where you talk about the new standards we can support in the industry, both in a de facto way about what enterprise readiness looks like, but also in a very concrete technical way, new kinds of standards we can make because we're on both sides of the interaction. Then even beyond that is this vision of a more integrated ecosystem. That's what Atlassian's really, the future Atlassian's really excited about is we can give them more insight into what customers are actually using and enable. Beyond just standards around Zero Trust and fine-grained authorization, we can actually help them create a better product by giving them insight into what other applications their customers are actually using.
How we're gonna monetize that over time is, well, the basics are just it makes the Customer Identity Cloud more valuable to that SaaS builder. But there's also another, a lot of other potential ways we could do it as well if you think about combining free capabilities, which just make it more attractive to SaaS builders to actually connect all the workforce customers. Then I'm sure there'll be over time, over the next, you know, few Oktanes, we'll talk about more ways to just maybe monetize the data potentially. But it's all rooted in this value prop today, which is the value of the Customer Identity Cloud.
Okay. We've got about 20 minutes left, so I'm gonna ask you to keep it to one question so we can get to all the hands up.
All right. Thanks. Andrew Nowinski with Wells Fargo. I think you did a nice job simplifying the message today with a two-product company and you gave a nice customer spotlight on a customer using both clouds. But I'm wondering, you know, what percentage of customers actually deploy both right now? Is there a price incentive to deploy both clouds?
You want me to talk about the price? I mean, the net of it is that, you know, whenever people buy volume right? People who buy together, and we have seen a couple of those customers buy together, you know, but it's just standard approach to how we sell volume discounts.
Yeah. What I was gonna say is that it's, there's a lot of potential. We have a lot of customers that only have one or the other, especially in this dynamic of this digital team, this engineering team, this product team that really is building it themselves. There's, I think, as a, as the one broad identity company, we can help a lot of those people as well.
Think about it. Every company on the planet has employees, by definition. They need workforce. Every company on the planet has customers, hopefully. At least, could be consumer customers or could be business customers. They need customer identity too. At minimum, they need two, you know, two use cases, two of the four use cases that we support. They need all of us, all of our stuff. Everybody.
Hi. This is Angie Song from Morgan Stanley. It's been around three months since your IGA early access has been released. Could you share some of the customer feedback that you've had, and some of the pain points that you've had to overcome as you integrated atSpoke? Thank you.
Any question dealing with the last three months is gonna wait till November 30th. Sorry. I know it's not ideal, but we need to stick to that. You wanna talk about the integration of atSpoke?
Yeah, sure.
You wanna talk about that one?
Sorry.
She asked about.
Oh, the atSpoke integration.
Yeah, the integration of atSpoke.
It's actually worked out very-
We did that a couple years ago. We can talk about that one.
It's actually worked out very well. I think for a previous question, we mentioned we brought in that team that has both expertise in doing specific kinds of things and also a slightly different tech stack. We're leveraging that team for some of the new stuff around PAM and other things as well. They incorporated very well with the existing stack and some of their strengths we are leveraging more widely. That's actually going very well.
Yeah. This is Shrenik Kothari from Robert W. Baird. Great presentation. You said your core Workforce Identity Cloud inherently drives efficiencies, and you mentioned about automation capabilities, Lifecycle Management workloads. You talked about customers get tremendous improvement in productivity, and you gave examples of Zoom and Netflix there. I mean, as you said, they are using across all the licenses, you mentioned the particular use case, which sounded super powerful. Especially in this kind of macro environment, and you guys have great history with CISOs and CIOs, they are decision-makers. For customer identity, they are influencers, as Susan pointed out. Are you guys using these efficiency use cases now? Can you tell about more examples, how you're driving these executive level, kind of conversations around efficiencies?
You wanna take that one, Susan?
Susan, I'm guessing.
Susan, yeah.
Sure. I'm happy to take it. We see workflows as a major upsell opportunity, and we see it happening over and over again. So much so that beyond enabling our salespeople, we've actually put a big enabling effort forth on the customer success side because really that's what it's not just about the upsell for us, it's about the impact and the automation that it's having across our customer base. What you heard from Sagnik Nandy was that we're going to make it easier now. We're gonna package a bunch of the workflows. Right now we have a number of different. There's public Slack groups that formed on their own, Okta admin users that have this whole viral thing going over sharing workflows.
Number one, there's this community of sharing workflows, and then number two, we're gonna make it easier now for to package up these workflows for customers. Sagnik Nandy, you can touch on that if you like.
Yeah. Like one thing we've started doing a lot more is share these stories even internally. All our teams are better equipped, both in terms of use cases, both ones that people are using, ones we should optimize for, one we should build for, as well as ones we should highlight while selling. Like, especially for workflows, some of the things we are hearing from customers far exceed even the way we thought the product will get used. We've had customers who've reached out to us saying, "You are now part of our core engineering development process.
So are you sure, like, you want us to keep using it that way?" Because it's a very different. It's super, I think, inspiring that it's no longer just an orchestration tool. Like this is like something they are teaching their developers to build on top of. It's a core development platform piece. There are many things coming out like that. As we facilitate the more sharing of these ideas, I think the network effects will be really, really impactful.
Okay.
Workflows, by the way, it's another great example of a platform component that binds both clouds together as well. We have a use case that we're looking into for one customer, where they have automated security incident response, you know, using workflows. Guess what? We have in, you know, security events that are being generated in customer identity as well, not just in workforce identity. Now we've proven that we are able to trigger those workflows from both clouds and have like a single process that deals with those incidents inside their organizations. That's a great example.
It's also a great way of fanning out our overall capabilities and development. Like, again, specific example of workflows. There was an integration with a particular HR system that we would have probably taken on a little later in terms of like how deep we go. One of our customers did a great job using workflows, building it themselves. What that means is now, like, if we facilitate the sharing of that, the next 10 people who need that integration don't have to block on us. The overall stickiness of the platform increases without us being the bottleneck for innovation necessarily. That, that's a great way of scaling our reach and stickiness without spending all the resources.
You know, the same dynamics of allowing our customers to do things that are not dependent and we are blocking them has been one of the contributing factors for our Zero Trust success too. Because you can change everything on your own. If you wanna do something special after a user logs in, you don't have to wait for us to do that integration. You don't have to wait for us to ship that specific integration out of the box. You can do it yourself. Very similar to what happens with workflows. Now, that allows us to go and look at what people are doing in the real world, and we can tap kind of into that collective creativity out there and say, "Oh, you know, everybody's doing the same thing." That's a great candidate for us to productize and to put it in the box for us.
We don't have to wait. They can do it right away.
Just one. I know we've spent a lot of time on this question. It's not just.
This is a long answer.
Yeah. It's not just workflows. I think we are seeing very similar trends with OIE. Great things about OIE is how customizable it is, and we are increasingly hearing from customers, like really interesting things they are doing themselves, leveraging the platform without blocking on us. I think the more platform-centric approach we take, it'll both expand our reach without us being bottlenecks and increase stickiness.
I think that's a great answer.
That's a good point. You are users of things like this too. You know, every time you go to Excel, you don't wait for Microsoft to build the formula for you. You build your formula yourself. That's exactly what we're doing with workflows in extensibility in CIC as well.
Hi, Madeline Brooks with Bank of America over here. Just one question for you guys on the PAM front. Second delay for the PAM product, just wondering the perception with your customers. You know, is that dissuading them a bit from considering your PAM product when it does get launched next year? And if so, or if you've heard of that, you know, how are you trying to get ahead of that? And then secondly, with PAM as well, have the delays been more on the product side because PAM is very technologically complex, or have they been, as you said, just purely kind of internal resources and organization that way?
Yeah, really good questions. I just met with a very large customer of Okta, and they are very excited about PAM, and they see Advanced Server Access as the on-ramp. They're busy going live with Advanced Server Access across several thousand servers, and they're excited about the update on PAM, and they're gonna add the vaulting capabilities that it's gonna bring when it comes out next year. They're on the on-ramp, and they're excited about it. I think in my conversations with customers, you see that over and over again. They're either don't have anything for a PAM solution or they have something they don't love, and they love to hear that we're going that way.
We talk about our vision and what we're gonna provide there and what we're not gonna provide there and why it's gonna be better, and they're happy to be partners with us. In fact, the customer I was talking with, their thing is like, we want a partner, not a vendor here. They feel like we're providing that capabilities. Sagnik, he's running all this, so he can talk about this more specifically. There's been, I think on the PAM strategy as it's evolved, there's three things that have happened over the last year and a half. One is that I talked a little bit about earlier. I think we thought we would be able to find some technology that would help us here, and we just weren't able to.
Second thing is that we ended up adding more to the Advanced Server Access product than we thought. The Kubernetes stuff you saw today, it's in Advanced Server Access. If you're using Kubernetes and you wanna manage that, the customer I was talking to, they're using it. They have Advanced Server Access. They love it. They're using it today.
The third thing is, we talked a little bit about this earlier as well, which is, I think we're honing our strategy around who the buyer is, and the buyer is really the compliance and security and the more closely related to our traditional buyer, in this case, for governance and for access management, IT, CISO, compliance type buyer. Versus there's another part of this whole space which is more machine to machine inside of the infrastructure. I think we're... It's all a little bit overlapping, but we're steering away from that buyer, more to our core buyer as we craft the solution, as we package the solution, deciding what's PAM and what's ASA.
Yeah. In terms of specific execution, I mentioned we around five-six months back, fundamentally changed how things are structured, and we are seeing really good positive impact of that on execution, really setting us up well. The other thing we did, both for IGA and PAM, is we are taking a long-term look. If there are two ways we could have built it. One is, like, take one use case end to end and just focus on that, and we would have probably shipped that a little sooner. Then when people say, "Well, that's not enough, I need that next use case," and that'll then be another six-month, one-year project. By virtue of building some of the core fundamental building blocks early and making those extensible, what we are facilitating is, A, we'll have a great, like, initial product.
After that, every use case we hear, the time to get those to market hopefully will be a lot shorter. So take something like PAM. You know, data integrations, if, as you over time, as you get into like connecting with very specific vendors, you could have done a very vendor-specific approach, and you would have probably gotten your first vendor out sooner. Then over time, if you needed five vendors, it would take five times the amount. By building a common layer of protocols where you can say, "Okay, now this is the part that the vendor has to provide," and then like everything else just flows. That initial thing might have taken like two months, three months, but now the five other vendors can happen in parallel. They can do part of the work.
We are really setting us up for, I think more continued faster execution.
Just a follow-up to how confident are you?
Hold on, Madeline.
Sir, how confident are you in meeting next year's deadline for having it be generally available, just given that there have been multiple delays? That's it for me. Thank you.
I'll put it this way. We thought a lot about making those commitments, so we have high confidence in them.
Like, twice today, I've met the team, who are super excited about the fact that we actually went and mentioned the date, and they are confident and they seem excited.
You're talking about the team building it.
Team building it.
Not the team that wants to buy it.
Yeah.
James Keenan with Keenan Capital. Just over here.
Hey, James.
Hey. Hey.
Hey. Just wanted to get your most recent take on the increasing pressure from Microsoft. They seem to be leaning more and more into their identity solution and getting a little more aggressive on the bundling front. Just kinda, are you feeling that pressure? And if so, how are you defending against it? Then, or competing really. Secondly, on the customer side, which vendors are you seeing most often in terms of, you know, on the Customer Identity Solution side?
I think Microsoft has been pretty serious about this for a long time, especially from the high level messaging and the how passionate they are about owning identity. I think there's a good reason for it, because they saw in the old generation of technology, there was a lot of lock-in with Active Directory. So they've been pretty aggressive for a long time. They have, over the last five years, they've done a good job of building identity for Microsoft. Because five years ago, we had a lot of customers that we were just helping our customers do identity for Microsoft. I think that dynamic has changed. Microsoft's pretty good at doing identity for Microsoft. Where we're adding all the value is really for everything else, which the good news is that everything else is a big pie.
Talking about other clouds, thousands of other applications, devices and iPhones and all the stuff that is the complex identity opportunity and problem for our customers. That's really where we've really shined, the heterogeneity with Okta Integration Network. I think that, you know, that's where we continue to do super well.
Okay, we have time for one more question.
I didn't answer the part about customer. You want to take that?
Oh, on customer identity, I think we mentioned it before. It's like, you know, we see everything because, you know, people have been building stuff, you know, like assembling solutions with whatever they had at hand. So we see everything from, you know, legacy vendors or, you know, Microsoft too. There's people using Amazon's identity capabilities, which are also kind of like optimized for Amazon itself. There's use of open source frameworks. Like, you know, Facebook gives you an entire SDK to log in with Facebook, but just with Facebook, not with anything else. So depending on the path that people have followed, there's like different, I don't wanna be a little bit harsh, you know, different versions of Frankenstein's that they built over time that it's just a lot of custom code, really, frankly.
It's some components that they sourced from the market over years and a lot of code around it just to complete what they needed, which is there's no one solution that gives them all, right? We don't really have except in the startup, like I'm starting from scratch, new company, which they start with us, and it's great, there's no greenfield project for us. All our projects are brownfield. All our projects are, you know, deploying side by side, migrating over time and slowly moving over and a customization on whatever they had before. They're all happy to throw away all that stuff too.
Hey, guys. It's Darren Baker from PRIMECAP. Thank you for spending the time with us today. I thought the presentations were definitely helpful. Echoing a few others' comments, I think, you know, the long-term vision around the universality of identity use cases and the efficiency and security benefits, all of that, I think resonates pretty strongly. But I think, you know, certainly in the kind of market environment that we're in right now, there's just, you know, I'll come back to your comment from earlier that the world's very different today than, you know, from where it was a year ago, and not just because money's not free.
Everybody, you know, your customers, I have to presume, kind of have a lot of anxiety and uncertainty about the state of their the economy and their businesses and things just like the rest of us do. I'd love to hear, like, as you're thinking out over the next kind of 12- 18 months, you know, and looking at your pipeline as it stands today and things like that, do you see changes in people's kind of behavior in the conversations that you're having when maybe they're thinking like, "You know what?
I love the story here, but I'm just gonna push this off another six months because I've got too many other things to deal with and too many constraints right now," or, "I'd rather consolidate with an existing vendor," or anything like that? Just help us think, you know, understand how you're thinking about kind of more that near-term picture.
I wanna make it clear. I think me saying money was free, and now it's not, that was just the kind of the clearest way for me to put it in a soundbite. There's much more going on. I mean, there's a war in Europe. I didn't mean to trivialize it at all like that. I just mean that's the simplest way for me to express kind of the starkest difference. Yeah, I think it is, it's a very different world for a number of reasons, as you mentioned. I think everyone is making sure they're focused on the highest ROI things.
For us, we're fortunate that over the long period of time, the last 10 years, the next 10 years, these trends were, you know, catalyzing a little bit, but also I think benefiting from cloud and security and digital transformation there. I mean, in the economy, nothing is unrelated from each other, but I think we're positioned well given these long-term trends, and that's why we're investing the way we're investing and thinking about, you know, this new world. Obviously, everyone is scrutinizing things more, and we're doing the same thing, but we're making sure we double down on things that are working and maybe making different decisions than we would have a year ago on other things.
All right. Thank you, team Okta. Thank you, everybody, for coming today. I know there were some technical difficulties at the onset for the online audience. That's been cleared up. A replay will be available very shortly. A PDF of all the slides that we presented today are already online. You can grab them there. Thank you so much for coming in. Again, we have earnings on November 30th. Tune in then. Thank you.
Thanks, everyone.
Thank you, everyone.