Okta has agreed to buy identity and access management rival Auth0 for approximately $6.5 billion.
The agreement, which was announced Wednesday evening, marks one of the largest cybersecurity acquisitions in recent years. Under the terms of the deal, Auth0 will continue to operate as an independent business within Okta, although the vendors' platforms will be integrated over time. The acquisition is expected to close during the second quarter of Okta's 2022 fiscal year, which ends July 31, 2021.
Since its founding in 2009, Okta has established itself as one of the largest identity and access management (IAM) vendors in the cybersecurity industry. The San Francisco-based company, which went public in 2017, offers enterprise workforce and customer identity offerings, including single sign-on, authentication and access control products.
Auth0, which was founded in 2013, offers similar technology but with more focus on enterprise developers. The startup, based in Bellevue, Wash., raised $120 million in Series F funding last July, which was led by Salesforce Ventures.
In a blog post, Todd McKinnon, CEO and co-founder of Okta, said the addition of Auth0's identity platform for developers will enhance the Okta Identity Cloud.
"Okta and Auth0 address a broad set of identity use cases, and our identity platforms are robust and extensible enough to serve the world's largest organizations and most innovative developers," he wrote.
McKinnon said he and Auth0 CEO and co-founder Eugenio Pace share a common vision for establishing identity services as one of the "primary clouds" for enterprises, such as infrastructure and collaboration. He added that the COVID-19 pandemic has hastened many organizations' transitions to the cloud and adoption of zero-trust networks, which has increased the importance of identity platforms.
Don Tait, senior cybersecurity analyst at Omdia, said that while both companies share some customers, the deal expands Okta's offering in the identity space. "With the Auth0 acquisition, Okta gets a cloud identity company that helps developers embed identity management into applications, adding an entirely new dimension to its identity platform. The Auth0 acquisition also gives Okta a service that is flexible and API-driven and has good tools for developers," Tait said in an email to SearchSecurity. "Also, for identity to become a primary cloud category, it needs to cover both workforce and customer use cases."
Doug Cahill, vice president and group director of cybersecurity at Enterprise Strategy Group (ESG), said two-thirds of the enterprises that participated in recent ESG research said their use of cloud services required changes to their IAM programs.
"One of the principle change agents is the increase in internally developed cloud-native applications, which requires purposeful API-driven IAM controls that allow developers to focus on delivering differentiated functionality while also incorporating access controls as an intrinsic feature of modern applications," Cahil said. "Okta and Auth0 share this view and the newly combined entity will help streamline the integration of IAM controls into the software development lifecycle."
Enterprise Strategy Group is a division of TechTarget.