Partnership Playbooks: Learning from Okta

As Okta, a leading SaaS company, is racing towards 2Bn ARR this year, its CEO and founder Todd McKinnon, called indirect channel partners 💎 “critical to Okta's success”. Let’s learn from him what is working (and not) in partnerships today.

📈 Okta's Identity Cloud serves 18K+ customers through 7K+ integrations with various app and IT infrastructure providers.

Their two products are:

Workforce Identity Cloud - manages/secures access to company systems for employees, contractors and partners

Customer Identity Cloud - manages/secure their login information for businesses' customers , ensuring a seamless user experience.

Despite tech market headwinds, Okta's net dollar retention stays robust at 117%, and they’re growing at 38% CAGR in FY21-24.

Their partner network ranges from AWS, Microsoft, Google to CrowdStrike, Salesforce, Plaid, Workday and beyond.

📊 Three key lessons from Okta's partnership playbook:

1️⃣ The Strategic Power of the Cloud Marketplaces

Although still a small segment of Okta's partnerships, the Amazon Web Services (AWS) Marketplace serves as a strategic channel that's growing rapidly.

Todd McKinnon notes:

“The AWS Marketplace has been pretty successful for us... Customers like that they can spend their enterprise credits on Okta through the marketplace. That's quite compelling to them.”

2️⃣ Aligning Incentives with Partners is Critical, Even When Your Product is Superior

Okta’s CEO experienced it last year with big System Integrators (SIs) who were reluctant to adopt their SaaS and forgo services revenue they earned with old school solutions.

“The Customer Identity Cloud …is a huge opportunity for large SIs. And frankly, an area where with the workforce business, if you talk to a big global SI, the cloud modern workforce identity business, a lot of times is - it's kind of too easy. 📍

They'd rather spend their time with a legacy stack where they have a lot of services dollars to wrap around that. And so getting the big SIs interested at times has been challenging for Okta. We've had some success, but compared to the businesses opportunity for helping people deploy workforce technology, it's relatively small.”

3️⃣ Engaging with Partners Across the Customer Cycle is Essential

He explained that was the reason why Okta launched new Elevate partner program:

“Historically, Okta turned to partners primarily for reach. And as Okta has grown, we've recognized the need to engage with partners more strategically…

The [new] program will recognize and reward partners for the full spectrum of value they can deliver to our customers at Okta. From finding, developing and influencing to delivering, managing and transacting, the more of these motions a partner offers, the more value they provide to Okta and our mutual customers.”

If you look at Okta's top growth vectors, partner ecosystem is one of them.

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