Okta: Helping Companies Maintain Visibility Despite Cloud Cover

1/27/11Follow @wroush

If you’re an active Internet user, you probably have enough trouble keeping track of the usernames and passwords you use for a couple dozen Web-based services: Gmail, Facebook, Twitter, LinkedIn, Amazon, iTunes, Flickr, and the like. Now imagine that you’re an IT administrator at a big company with hundreds or thousands of employees, each of whom spends an increasing portion of his or her day connected to mission-critical cloud services like Google Apps, Salesforce.com, Webex, Zoho, or Eventbrite. Suddenly the password management problem balloons out of proportion—not to mention other management issues like tracking seat licenses and disconnecting employees’ online accounts when they leave the company.

A San Francisco startup called Okta has been talking up its solution to this burgeoning problem this week, and today the company published an announcement about the “launch” of its own technology, a cloud-based service for managing access to other cloud-based services. I use the quote marks because Okta has been around since 2008, and isn’t actually unveiling anything new; the Okta service that’s available today is the same service that was available yesterday. If you want my honest opinion, I think the company still has a bit to learn about public relations—you can’t issue a press release, reveal the names of a few customers, and call it a launch.

But PR tactics aside, the folks at Okta have put their fingers on an important problem, and they’re building up a technological lead that puts them in position to profit handsomely as the cloud-computing revolution rolls forward. Indeed, handsomely enough that they’ve attracted $10 million in funding from Andreessen Horowitz, the venture firm founded by Netscape and Loudcloud alumni Marc Andreessen and Ben Horowitz. So despite the non-news nature of today’s news, I’ll take a few paragraphs to tell you about Okta. (Meaning their campaign was effective after all, I guess.)

Imagine piling all of a big organization’s corporate software onto a see-saw where the fulcrum is the firewall—the line separating the company’s on-premise hardware and internal networks from the larger Internet. For decades, all the weight was on the on-premise side, from e-mail management software such as Outlook Exchange to enterprise resource planning software like SAP. But gradually, starting the in the early 2000s, business users began signing up to use software that sits on the other side of the see-saw: applications like Salesforce.com and WebEx and GoToMeeting that live “in the cloud,” meaning they run on remote servers owned by third parties and are accessed by subscription or even by the hour.

So the balance began to shift. And Okta’s thesis is that much sooner than most businesses think, the seesaw is going to tip all the way in the direction of the cloud, never to tip back again.

“It’s not controversial that this is happening, but what is unappreciated is how is how dramatic the shift is going to be,” Okta CEO and co-founder Todd McKinnon said at a dinner for journalists in San Francisco Tuesday evening. “We fundamentally believe that the center of gravity of corporate IT is shifting outside the firewall. In that world, how do you do basic things like making sure that people can log in? We are trying to empower companies to make that shift effectively.”

To handle the login problem, Okta provides a single sign-on service so that employees don’t have to remember or enter separate usernames and passwords for each cloud service they use. Okta integrates with hundreds of business and consumer cloud applications, including … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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