Okta CEO: ‘The technology has to be there' for hybrid work strategies

Okta CEO Todd McKinnon joins Yahoo Finance Live to discuss the outlook for work-from-home companies and business technologies, challenges offices face while transitioning to cloud-based technologies, and Okta's own success in helping office cultures normalize through pandemic-era trends.

Video Transcript

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ALEXIS CHRISTOFOROUS: Okta just released its annual Business at Work report, looking at which apps and cloud services were the most popular with its clients over the past year or so. Here to help us break it all down is Okta's CEO, Todd McKinnon. Todd, always good to see you. So I was looking through this report, I know two things stuck out, collaboration and security were the two most popular categories. But I also noticed that a lot of your users are choosing apps that are sort of best-of-breed over that single-vendor approach. Any idea why we're seeing that trend?

TODD MCKINNON: It's great to be on the show, Alexis. Thanks for having me. This is our eighth annual Businesses at Work report. And to give the viewers a context, this is where we take aggregate data about usage on our-- the Okta Integration Network, which is from our 14,000 plus customers using over 7,000 applications and technology across the whole tech landscape, to get unique insights into what's happening in the world. And over the years, we've seen high flyers emerge like we first saw Slack growth exploding several years ago, Zoom growth.

So you get a look into the up and comers, you get a look into interesting trends like in this year's report as you mentioned, people are really focused on that back to work experience. One really interesting thing we saw in the data this time is that if you look at office management applications like Envoy, and you look back two years ago in the pandemic, the usage of those office management applications went down but it's actually back to pre-pandemic levels. So it's kind of you're seeing that office environment normalize.

You mentioned the collaboration applications, for the first time ever in the top 10 fastest growing applications on our report, five of them are collaboration applications, like Figma and Monday and Airtable and Notion. So companies are bringing people back to the office, they're-- when they're not back in the office when they're doing a hybrid work environment or a dynamic work environment, they're investing in technology tools to make those employees productive. And the last thing you mentioned too about security, everyone's trying to do this all while keeping everyone very, very secure and stay out of the headlines in terms of security breaches.

KARINA MITCHELL: Hey, Todd, it's Karina. Thanks for coming on. You know, you have this really interesting purview, this great insight into what organizations are doing to sort of stay ahead using all of these apps and how they've eventually weathered the pandemic and the challenges they face ahead amid you know, this new year and such increased volatility. We know that there's slowing growth, the IMF just came out with that report. I'm wondering, what are you seeing as far as the challenges these companies are facing? And then even in your own sort of work scape, how have you managed the pandemic and what are the challenges that you're dealing with?

TODD MCKINNON: You mentioned companies trying to stay ahead and get ahead. And that's more true now than ever. There's so much technology, so much power in terms of moving a businesses' strategy forward if they choose the right technology. And what we're seeing in our data is that if you want to stay ahead, you can't fall behind.

We look at a lot of customers that are stuck behind on legacy technology. It's on-premise, particularly things like on-premise technology from Microsoft, where they have Exchange servers or SharePoint servers on-premise. And we see in our data that these on-premise environments are subject to far, far, number-- higher number of attacks. So people trying to attack those legacy applications with password stuffing attacks and take advantage of that those legacy applications don't have the modern security that a cloud-based alternative, something like an Okta or Google Workspace or an Office 365 have. So as these companies try to modernize and try to build new customer applications for their customers, best-- deploy the best technology to their workforce users, they have to be able to move forward, get to modern technologies, modern protocols to get the benefit of all this technology without the security risk.

ALEXIS CHRISTOFOROUS: You know, Todd, over at Okta, you guys have been seeing explosive growth, something like 60% growth year over year. But at the same time now, you've got just about every industry dealing with higher costs. And I'm wondering how that's impacting your business, are you starting to see that already from the client side? And then also in-house, how are you dealing with these higher costs?

TODD MCKINNON: Well, from a customer perspective, they do think about costs but more and more they're thinking about top line. How can we-- there's a technology revolution going on and you know, the stock market goes up, the stock market goes down, there's lots of volatility. But if you zoom out, it's absolutely critical for every business in every industry to start to become a technology company, to reimagine their products as technology services. To create new products as technology services and take advantage of all this innovation.

So that's what customers are trying to do. We have a big part of our business, which is customer identity and access management, which is making sure that those digital products have an amazing login experience, have top-notch security, because as you know, online, if you don't have an amazing login experience, they're going to go to the alternative. So it's imperative for customers to invest in technology to have a great experience to grow the top line.

On the expense side, I think what we're seeing is that employees are more valuable than ever. And having an engaged workforce that can work in this new world we're in now, where it's back to the office in some cases but in many cases, it's dynamic and hybrid. The technology has to be there. And I mentioned before, you're seeing companies invest in everything from HR tools to collaboration tools to making sure that every technology is very accessible and very easy to use. Because surveys show that the more forward a company's technology strategy is and the more applications and tools they have to-- in a modern environment, the more likely they are to stay at their company. So you're seeing companies double down on their employees and believing that's going to drive their growth going forward.

KARINA MITCHELL: And then, Todd, I know you said collaboration and security are two of the big things organizations focus on but there's also some good news as well. You say companies are also invested in giving back through apps. Tell us about that.

TODD MCKINNON: Well, it's a big part of our company. Our philanthropic arm of our company, Okta for Good, has done-- has tremendous impact in terms of the communities we operate in around the world. Whether it's giving, whether it's working with our-- the non-profits to use our product, whether it's our employees that are engaged in their communities to help give back in their communities around the world.

And that translates just like Okta or every other company, every non-profit has to use more technology to be more successful. They have to be able to reach their constituencies through technology. They have to have an engaged workforce striving forward toward their mission. And we're happy to support them in the work we do. And you're seeing more and more companies taking this same fully integrated philanthropic approach for their non-profit efforts. And it's kind of rippling through the industry. And I think it's a very positive trend.

ALEXIS CHRISTOFOROUS: All right, Todd McKinnon, CEO of Okta. Always good to see you. Thanks for bringing those insights. Be well.