When we talk about secular trends, cloud, and digital transformation, we’re really talking about these kind of things like the people have a bunch of on-premise technology and they want to use on-premise technology to manage it and the more they move to the cloud, the more likely they are to choose a cloud modern next-generation solution like Okta. So, I think there is two dimensions that — you asked for catalysts, I think there is really one dimension is what we talk about all the time, it’s like more cloud technology, more — I was talking to a big customer earlier this week that the real catalyst for them to look at their Workforce, reevaluating their Workforce Identity platform was really that finally they are getting into public cloud.
They are taking tons of workloads out their own data center and moving into public cloud and that just changed a bunch of stuff, where it didn’t make sense anymore given that they were going to some SaaS applications, and they were building some new applications and the way their network was going to work and the way their security perimeter was going to work, just didn’t make any sense anymore to have the legacy solution. So, that’s a catalyst. The second catalyst is the products are getting better. So, it’s the fact that we have Privileged, the fact that Privileged Access come in GA in Q4, the fact that we have Okta Identity Governance starting to rollout. The fact that this is a big one, Okta is the only — the only identity management provider, and this is a Workforce feature or a Workforce capability, that can do phishing-resistant authentication across every client device, across all applications in a comprehensive universal way.
That’s a huge differentiator. So, when you look at some of these big deals starting to move, it’s not enough to do it just on Windows and just on some applications, Okta can do phishing-resistance everywhere. And a lot of the security breaches are just phishing and it’s like phishing multi-factor authentication methods that aren’t phishing-resistant, like SMS, SIM Swap and you’ve heard of that, or it’s they do phishing of a one-time password number, there’s all kinds of creative things. We have the only solution that’s phishing-resistant, and it’s across all platforms. And so the product is getting better too. So, I think those two things are going to help us continue to take advantage of this big opportunity we have over time.
Anushtha Mittal: That’s helpful. Thank you.
Todd McKinnon: You’re Welcome.
Dave Gennarelli: Next up, we have Eric Heath at KeyBanc.
Eric Heath: Hey, can you hear me? I do.
Todd McKinnon: Loud and clear, Eric.
Eric Heath: Appreciate it. Todd, I guess just for you on the execution side. Just curious where do you think we are in terms of what inning on the execution side, and maybe what’s left to go? That’s just the first part. And the second one, I just wanted to follow up on OIG. How much is the sales force at this point is kind of enabled to sell OIG and are you starting to feel the confidence yet to kind of get more aggressive and kind of roll this into the playbook and start to more displacements in perhaps the enterprise installed base?
Todd McKinnon: I’m assuming on the first question, what inning we’re in for execution, I’m assuming you meant kind of like Customer Identity Cloud integration, rep attrition, some of the stuff we talked about in the previous quarters. I think that is behind us. I think when we look at the clarity of the message of our two clouds, the participation rate of reps in the Customer Identity Cloud deals, I feel comfortable with those things. The overhang or the question there is, what is the macro impact and how long will it last? Because the — because our overall, we think our go-to-market and our sales team can be more productive. We think it’s first of all, you can always get better. There is always things we’re doing to increase productivity and get better and striving to be better tomorrow than we are today.
But I think — I think the macro is a question mark there. We have our thoughts and our assumptions in the forecasts and in the models, but I think that the degree to which our productivity is trading off between macro and what the potential is, I think that’s — we’ll have to see how that unfolds. And I think, frankly, we’re taking a pretty conservative approach there assuming that the macro is going to be kind of is what it is for a while. We don’t think it’s going to get any worse, but we don’t think it’s going to get better tomorrow either. So, we’re being pretty conservative on that.
Brett Tighe: I would just add on that. I think one of the highlights, Eric, is the cross-selling tailwind that we’ve been receiving. So, that really highlights the team is executing and being able to deliver the value prop and deliver the value to the customers and I think that’s a really good indicator of why things are working so well, because we have been doing some great cross-selling over the last few quarters, thanks in part to what Todd has been talking about around releasing Governance and obviously Device Access came out this last quarter and is adding to that as well, but it’s — I think it’s just a combination of the products continuing to roll-off the assembly line, if you will, and also the improvements we’re making to the product plus the execution from the field, just really improving, thanks to those tenure statistics that Todd was mentioning, as well as the ramp percentage now really at a very high level.
So, we’re pleased with how the team has really been executing. We’re pleased with it.
Todd McKinnon: And you also asked about the — how much of the sales team is ramped on Governance, Okta Identity Governance. I think that it’s like any new product and a product that is still early in its lifecycle and go-to-market, but exceeding our expectations. There is still more ramping and more education and more comfort and how the sales team is comfortable quantifying the opportunities, executing them, there is still ramping that’s left to do there. And I think that — I think that will continue really at scale and continue to ramp through next year. The reality is, we have a good sales team and a decent amount of sales capacity, and to get it fully comfortable selling Governance as they are with the rest of the products, it’s going to take several quarters, but once it does, we have a great at scale sales team to take it broadly to market.
Eric Heath: Thanks, Todd.
Dave Gennarelli: Next up, let’s go to Angie Song at Morgan Stanley.
Angie Song: Hi, thank you so much for taking my question. Just a quick one from me. Could you just remind us of how big the federal vertical is for Okta? And have you been seeing an uptick in momentum in this vertical in the last quarter, as you achieved FedRAMP High? Thank you.
Todd McKinnon: The federal vertical is really a key important part of our strategy, it’s not just a bunch — it’s not just a big IT spend, but it’s also, they have very direct mandates to use multi-factor and to invest in modern Identity Solutions. I was — I spent about a week in Washington during last quarter, and one of the really interesting things I noticed about the — I mean, as a reminder, that I’ve known it for a while, but they are probably of — all of a lot of most industries or most verticals. They’re probably the most — they have the most formal programs around Identity. All the big agencies have a formal office or department around Identity. So, I think they are just mature in how they think about it, and they’re modernizing like everyone else.
So, it’s a really big opportunity for us. You mentioned the certifications, we did — last quarter, actually two quarters ago, we received our FedRAMP High authorization, which is really exciting. And we have a bunch of marquee customers that sponsored us that for that authorization and we’re excited to move forward, that we also have the ability to — on the military side, we have the ability to service IL5 workloads, which opens up more of the Department of Defense and some of the more sensitive military sides and we have great customers there, so it’s a really important part of our strategy and it’s a big part of our focus. The other part of the business that’s important is the state and local governments, so between federal, state, and local government, they need identity and we’re doing very well in those verticals and it’s a big area for our focus.
Brett Tighe: Hey Angie, I would just — I would just add, it’s — we’re still in the early innings. We still have a lot of opportunity there. So, keep that in mind.
Angie Song: Got it. Thank you so much.
Dave Gennarelli: Let’s go to Stefan Schwarz at [Wells Fargo] (ph).
Stefan Schwarz: It’s Wells Fargo, actually. I’m on for Andy Nowinksi. Thanks for taking my question. I wanted to ask about OIG. First, could you give us an update on how many customers you have using it now, and just if there’s any color you could give on how they’ve been able — how the price has been able to surprise in terms of competitive displacements that you mentioned you weren’t expecting? And just your thoughts on how sustainable you think that is going forward. Thank you.
Todd McKinnon: Yes. The number of customers has exceeded our expectation significantly. Also the size of the deals, it’s — they’re — deal sizes are a very positive surprise on the upside, which is great. What we’re seeing is that the — it’s usually a third of the you know increase of 30%-plus on the Workforce spend. So, if you’re spending a $1 on Workforce, you add Governance, it’s you’re paying a $1.30 or more. So, that’s really encouraging. And I think, I mentioned the example of, one of the other couple of surprises about, we thought it would be mostly a greenfield thing. We think the market for Governance is very underserved, and because the solutions, the legacy solutions haven’t been that good. We think we have a better solution, it’s super-fast to rollout, it’s very integrated with Access Management, it connects great, integrates great with the ecosystem, like we’re really well-known for on the Access Management side.
And I think because of that, we think we can make the market bigger. But I mentioned the example of Ryder Truck Rental, that was a competitive displacement. They had a legacy provider, they looked at OIG a year ago, didn’t think it was up to snuff, they got kind of frustrated with the progress on their legacy, with their legacy provider, and they displaced it with us and they were rolled-out and have seen value from it very quickly. So, I think stories like that are really encouraging. I think that being said, it’s still pretty early, both in terms of the potential it could have and which makes it very exciting as the strategy comes together on the Workforce side.
Stefan Schwarz: Thank you.
