Here are some things that finally convinced me to get into Okta today.
Addressable market
Saul quoted from their conference call We believe significant tailwinds are pushing the market in our direction. First, every organization we talk to is on a journey to the cloud. Second, they’re thinking about how to become technology companies and better engage with customers online or through custom and mobile applications. And third, security has become a priority at the highest level. While cloud, digital transformation and security are top priorities, most organizations are still relatively early in their journeys to realize their full potential.
Todd McKinnon, Okta’s CEO, gave a great example on Cramer that illustrated this. https://youtu.be/_ka8iCeRc3s
Cloud computing is a huge deal. And every company trying to be a technology company themselves is a huge deal. I’m sure you guys reported earlier this week, the #1 app in the app store is now Burger King. So, Burger King made a mobile app, and now they’re taking share from McDonald’s because of their mobile app. And now what do you think McDonald’s is gonna do? Right? Now they have to build a mobile app. So even companies you wouldn’t think of as tech companies have to be like tech companies. And when you take the cloud, and you take the architecture of the network shifting fundamentally, securing it all is harder than ever.
I am starting to realize how huge their opportunity is.
Partnerships
Saul also mentioned in his review that Large partners such as Deloitte and VMware have recognized Okta as a vendor of choice for identity solutions, which further enhances our positioning.
Todd also expounded upon this on Cramer, back in June https://youtu.be/cYL-ivlCNrg
I won’t quote it, but at around 4:30 Cramer mentions Palo Alto, and then Todd mentions in his response that they also partner with VM Ware and Facebook. He also makes it clear that these partners choose Okta because the “Identity” part of the stack is not like what VM Ware or Palo Alto is selling. (Not a techie so I don’t really get why, but) Okta is it’s own thing. My guess is that businesses don’t just buy pieces of networking software because they look cool – they buy to cover their needs. If other security and networking vendors are telling businesses they need Okta, and vice versa…well, you can see why Okta is growing so fast.
Plenty more to like
A lot of good stuff deeper in the numbers this quarter. They reigned in spending quite a bit, and growth only accelerated. I loved their supplemental info – thanks to cgall75 for pointing out that gem! https://discussion.fool.com/okta-q319-results-34077400.aspx
I built a small position to start, just over 3%. We’ll see where it goes. (Also added to some other things, like NEWR. Cash is down to below 10%…but I still have some to deploy.)
Bear
PS Elsewhere, Cramer has called Okta a “Cloud Prince” (along with New Relic) https://www.cnbc.com/2018/09/12/cramer-introduces-the-risky-…
I’m starting to believe.