A  Forrester  Total  Economic  Impact™  Study  Prepared  For  Okta  

The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  
Identity  And  Access  Management  Service  
Project  Director:  Norman  Forbush  
October  2012  
 

   

 

Forrester  Consulting  
The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service  

TABLE OF CONTENTS
Executive  Summary  .................................................................................................................................................................................................  2  

Disclosures  .............................................................................................................................................................................................................  3  

TEI  Framework  And  Methodology  ...................................................................................................................................................................  4  

Analysis  ..........................................................................................................................................................................................................................  6  

Interview  Highlights  ..........................................................................................................................................................................................  6  

Costs  ..........................................................................................................................................................................................................................  8  

Benefits  ....................................................................................................................................................................................................................  9  

Flexibility  .............................................................................................................................................................................................................  14  

Risk  .........................................................................................................................................................................................................................  14  

Financial  Summary  ...............................................................................................................................................................................................  16  

Total  Cost  Of  Ownership  Of  Okta  Compared  With  In-­‐House  Development  ..............................................................................  17  

Okta  On-­‐Demand  Identity  And  Access  Management:  Overview  .....................................................................................................  19  

Appendix  A:  Total  Economic  Impact™  Overview  ...................................................................................................................................  20  

Appendix  B:  Glossary  ...........................................................................................................................................................................................  21  

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Page  1  

 For  this  study.   • Benefits.188  per  year.  costs.  and  benefits  shown  in  Table  1.472  per  year  in   improved  service  desk  productivity  and  a  corresponding  estimated  savings  of  $188.  with  an  estimated   savings  of  $23.   • Costs.156.  with  an  estimated  savings  of  $164.  Users  saw  increased  productivity  because  of  improved  access  to  applications  from  any   device  in  any  location.  The  analysis  showed  that  Okta  benefited  the  organization’s  IT  staff  with  productivity  savings  from   automated  provisioning  and  deprovisioning  and  with  reduction  of  service  desk  requests  due  to  password  resets   and  forgotten  URLs.  or  on-­‐premises.  The  interviewed  organization  experienced  the  following  benefits:   o Reduced  IT  time  spent  on  provisioning/deprovisioning.  Inc.  The  interviewed  organization  uses   automated  provisioning  and  deprovisioning  to  reduce  those  requests  by  75%.236   Source:  Forrester  Research.   either  remotely.499   ($177.   Table  1   Three-­‐Year  Risk-­‐Adjusted  Analysis   Payback   Total  benefits   Total  costs   Net  present   ROI   period   (PV)   (PV)   value   652%   2  months   $1.  for  important  staff.  anywhere.  The  interviewed  organization  estimates  it  reduces  service  desk  requests  for   password  resets  and  forgotten  URLs  by  80%.  Forrester  conducted  an  interview  with  one  existing  Okta   customer.323  per  year.   o Improved  user  productivity  —  working  more  due  to  “any  device.  The  purpose  of  this  study  is  to  provide  readers  with  a  framework  to  evaluate  the  potential  financial   impact  of  Okta  on  their  organization.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Executive  Summary   Okta  commissioned  Forrester  Consulting  to  examine  the  total  economic  impact  and  potential  return  on   investment  (ROI)  enterprises  may  realize  by  deploying  Okta  On-­‐Demand  Identity  and  Access  Management   service.263)   $1.602  per  year  in   improved  user  productivity.  while  mobile.  with  an  estimated  savings  of  $446.”  The   interviewed  organization  estimates  that  Okta  enables  single  sign-­‐on  to  critical  enterprise  applications.100  employees  experienced  the   risk-­‐adjusted  ROI.  The  composite  organization  experienced  the  following  costs:   Page  2   .  with  an  estimated  productivity   improvement  of  25  minutes  per  week.   o Improved  IT  admin  and  user  productivity  by  automating  password  resets  and   forgotten  URLs.333.  The  analysis  found  that  the  interviewed  organization  of  1.

000 $300.100  users.000) Initial Year 1 Year 2 Year 3 ($200.000 $500.000) Total Costs Total Benefits   Source:  Forrester  Research.000 $200.   Disclosures   The  reader  should  be  aware  of  the  following:   • The  study  is  commissioned  by  Okta  and  delivered  by  the  Forrester  Consulting  group.   • Okta  reviewed  and  provided  feedback  to  Forrester.950.   • This  study  is  based  on  an  interview  with  one  company.000 $100.  The  interviewed  organization  reported  Okta  monthly  fees  of   $4.000 $0 ($100.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   o Software-­‐as-­‐a-­‐service  (SaaS)  fees.000 $600.  for  1.   • Forrester  makes  no  assumptions  as  to  the  potential  return  on  investment  that  other  organizations  will   receive.  or  $66.000  a  year.  Inc.       Page  3   .  Forrester  strongly  advises  that  readers  use  their  own  estimates  within  the  framework  provided  in   the  report  to  determine  the  appropriateness  of  an  investment  in  Okta.000 $700.000 Cash flows $400.   Figure  1   Financial  Summary  —  Three-­‐Year  Risk-­‐Adjusted  ROI   Financial analysis (three-year) $800.  but  Forrester  maintains  editorial  control  over  the   study  and  its  findings  and  does  not  accept  changes  to  the  study  that  contradict  Forrester’s  findings  or   obscure  the  meaning  of  the  study.  The  customer  for  the  interview  was  provided  by   Okta.

  Approach  And  Methodology   Forrester  took  a  multistep  approach  to  evaluate  the  impact  that  Okta  Access  Switches  can  have  on  an   organization  (see  Figure  2).   2.  Specifically.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   TEI  Framework  And  Methodology   Introduction   From  the  information  provided  in  the  interviews.   Page  4   . Risk. Costs.  Forrester:   • Interviewed  Okta  marketing  and  sales  personnel  and  Forrester  analysts  to  gather  data  relative  to  Okta  and   the  marketplace  for  cloud-­‐based  identity  and  access  management.   Figure  2   TEI  Approach   Conduct Construct financial Perform due Write case customer model using TEI diligence study interviews framework   Source:  Forrester  Research.   Forrester  employed  four  fundamental  elements  of  TEI  in  modeling  Okta  On-­‐Demand  Identity  and  Access   Management  service:   1.  The  objective  of  the  framework  is   to  identify  the  cost.  flexibility.   • Interviewed  one  organization  currently  using  Okta  services  to  obtain  data  with  respect  to  costs.   4.  benefit. Benefits  to  the  entire  organization.  Forrester  has  constructed  a  Total  Economic  Impact™   framework  for  those  organizations  considering  implementing  Okta  services.  The  financial   model  is  populated  with  the  cost  and  benefit  data  obtained  from  the  interview.   • Constructed  a  financial  model  representative  of  the  interview  using  the  TEI  methodology. Flexibility.  and  risk  factors  that  affect  the  investment  decision.  benefits.  Inc.   3.   and  risks.

Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Given  the  increasing  sophistication  that  enterprises  have  regarding  ROI  analyses  related  to  IT  investments.  Please  see  Appendix  A  for  additional  information  on  the  TEI  methodology.       Page  5   .   Forrester’s  TEI  methodology  serves  the  purpose  of  providing  a  complete  picture  of  the  total  economic  impact  of   purchase  decisions.

”  Further.  which  included  single  sign-­‐on  (SSO).  the  ability  to  put  in  a  password  one  time  to   access  to  multiple  (dozens)  applications  is  a  seen  as  a  big  advantage.  self-­‐provisioning.  how  many  people  have  access  to  applications.  Prior  to   Okta.  and  simplified   password  maintenance.  and  with  the  growing  number  of  web-­‐based  applications  that  it  projected  to  support.  And  all  this  made  Okta  a  good  fit  for  us.  To  conform  to  a  “cloud  first.  The   company  also  estimated  that  it  cost  about  $25.  IT  administrators  use  dashboards  to  see  if  active  directories  are   healthy.  multi-­‐factor  authentication.”  Users  have  deployed  787  instances  of  applications.  The  interviewed  company  indicated   that  the  adoption  of  Okta  was  related  to  a  convergence  of  a  number  of  strategic  and  tactical  cloud-­‐related   initiatives  within  the  company.  how  many  applications  have  been  provisioned  in   Page  6   .”  there  was  a  desire  to   adopt  packaged  cloud  applications  (sales  force  automation.  those  overall   costs  were  escalating  quickly.  active  directory   integration.  like  adopting  different  cloud  solutions.   • Okta  provides  users  with  easy  access  to  applications.  Users  find  clear  benefits  in  having  access  to  all  applications  in  one  place  with   one  (domain)  log-­‐in.  expense  management.  the  interviewed  company  was  using  internal  resources  to  build  SSO  web  services  to  access   applications:     “The  problem  was  that  it  was  time  consuming.”   • Okta  replaced  the  company’s  complex  and  expensive  in-­‐house  SSO  integrations.  which  required  failover  functionality  that  the  in-­‐house  integration  couldn’t   deliver  on  reliability.  Plus  employee  self-­‐provisioning  of   applications  is  very  well  received  by  users.  This  convergence  exposed  the  need  for  a  solution   that  Okta  provided.”Complexity  was  increasing  with  support  of  critical  web-­‐based  sales   force  automation  applications.  With  Okta.  100%  web  IT  strategy.  We  had  tactical   reasons  that  pushed  us  in  the  direction  of  Okta.000  per  in-­‐house  integration.  and  which  decreased  user  productivity  when  applications  were  not  accessible.  car.  The  interview  with  the  IT   director  at  the  company  uncovered  the  following  points  (all  quotes  are  from  that  interviewee):   • Okta  is  integral  to  the  company’s  “cloud-­‐first”  strategy.  and  every  time  we  had  to  build  an  integration.  just-­‐in-­‐time  provisioning.  we  had  to   support  that  integration.  productivity  suites.  including  a   cloud-­‐based  project  management  application  whose  use  has  spread  virally  via  invites  and  self-­‐ provisioning  and  led  to  the  company  purchasing  enterprise  licensing  for  it.  plus  ongoing  maintenance   costs.  and  administration  and  reporting:   “The  aggressive  adoption  of  cloud  applications  really  exposed  the  need  for  Okta.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Analysis   Interview  Highlights   The  customer  interviewed  for  this  study  is  a  global  technology  solutions  company.  “It   gives  IT  insights  into  what  salespeople  are  doing.  Other  common  self-­‐ provisioned  bookmarked  sites  are  for  hotel.  Continuation  of  in-­‐house  development  to  support  a  web-­‐based  strategy  would   have  been  too  complex  and  expensive.   • Okta  benefits  IT  administrators  in  managing  application  access  and  the  provisioning  and   deprovisioning  process.  and   reporting)  and  custom  line-­‐of-­‐business  applications.  but  we  also   needed  something  more  enterprise  grade  and  reliable.  and  airline  programs  in  support  of  employee  travel.  “One  stop  shopping  is  perceived  as  a  big  benefit.

300  fully  loaded  salary/2.   Table  2   Model  Assumptions   Ref.  That  is  incredibly  time-­‐saving  and  efficient  —  it  just  makes  it  very  easy  to  roll  out  a  new   application.  the  real  driver  of  heavy   adoption  was  the  roll-­‐out  of  enterprisewide  cloud  content  sharing  and  collaboration  tools  and  web-­‐based   user  productivity  applications.90   Page  7   .500   A3   $58.  and  what  are  the  top  applications  based  on  usage.”  said  our  interviewee.”  Some  of  these  applications  didn’t  start  as   enterprisewide  use.  the  application  icon  is  available  to  them.  it’s  very  easy  for  us  to  provision  it  to  users  in  Okta.080  hours  per  year   General  business  staff  hourly  rate  at  $55.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Okta.080  hours  per  year   A6   Knowledge  worker  hourly  rate  at  $100.080  hours  per  year   Service  desk  hourly  rate  at  $48.  it  was  literally  a  work  of  an  instant  because  everyone  was  already   accustomed  to  logging  into  Okta.000  base  salary  or   A5   $35.  there’s  no  link  they   have  to  learn.  so  the  next  time  they  log  in.”  When  the  company  rolled  out  an   application  to  its  sales  organization.  “Yet.15   loaded  salary/2.   Metric   Value   Discount  rate  used  in  present  value  (PV)  and  net  present  value   A1   10%   (NPV)   A2   Length  of  analysis   3  years   IT  administrator  hourly  rate  at  $90.  they  also   receive  alerts  on  repeated  unsuccessful  log-­‐ins.72   $74.000  base  salary  or  $64.  “When  we  roll  out  a  new   application.41   fully  loaded  salary/2.000  base  salary  or   $64.  The  interviewee  cited  provisioning  of  users   as  “another  huge  benefit.”   • Broad  user  adoption  of  Okta  was  driven  by  web-­‐based  collaboration  and  productivity   applications.”  as  Okta-­‐supported  applications  are  also  simplified.  Everyone  in  the  company  accesses  these  apps  via  Okta  and  they  are  our   primary  communication  and  collaboration  system.  the  core  set  of  enterprise  packaged   applications  were  logical.  Okta  provides  automatic  deprovisioning  of  enterprise  applications   when  users  are  deprovisioned  in  Active  Directory  and  provides  workflow  (to  the  help  desk)  to  support   deprovisioning  of  applications  for  unsupported  applications.  who  the  top  users  are  based  on  usage.000  base  salary  or  $121.  obvious  fits  for  Okta.  “Having  all  these  web  apps  managed  in  a  central  way  is   tremendously  beneficial.   Framework  Assumptions   Table  2  provides  the  model  assumptions  that  Forrester  used  in  this  analysis.800  fully   A4   $31.  and   there  is  nothing  for  them  to  do.  “Once  we  made  the  decision  to  go  with  Okta.  but  the  adoption  of  Okta  made  them  easily  deployed  on  an  enterprisewide  basis.”  Further.  “There  is  no  user  name  or  password  for  them  to  learn.

 Readers   are  urged  to  consult  with  their  respective  company’s  finance  department  to  determine  the  most  appropriate   discount  rate  to  use  within  their  own  organizations.   Okta  provides  professional  services  to  assist  customers  to  initially  configure  their  applications.  the  interviewed  company  indicated  that  initial  and   ongoing  configuration  and  deployment  of  applications  in  the  Okta  service  took  so  little  time  as  to  not  warrant   inclusion  of  that  time  in  their  capex  or  opex  costs.080  hours  per  year   Source:  Forrester  Research.000)   ($66.  Okta’s  pricing  is  based  on  the  number  of  users.100       B2   Annual  fee  per  user   $5*12     $60       Bt   Okta  SaaS  annual  fees   B1*B2     ($66.  or  $66.000)   Source:  Forrester  Research.  which  is  $5  per  1.   Organizations  typically  use  discount  rates  between  8%  and  16%  based  on  their  current  environment.  Inc.100  users  per   month.   Table  3   Okta  SaaS  Annual  Fees   Ref.  On  an  annual  basis.   Total  Incremental  Costs   The  total  incremental  cost  for  the  composite  organization  to  purchase  Okta  devices  is  illustrated  in  Table  4.  The   interviewed  organization  indicated  fees  of  approximately  $4.  Further.000  fully  loaded  salary/2.       Page  8   .   Metric   Calculation   Initial   Year  1   Year  2   Year  3   B1   Number  of  users       1.   Costs   This  section  describes  the  overall  costs  for  Okta  services.  this  is  $60  per  user  per  year.   Okta  SaaS  Fees   Okta  is  a  SaaS  offering  that  is  paid  for  on  a  monthly  basis.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   $135.  Inc.950  per  month.000)   ($66.  as  shown  in  Table  3.000  per  year.  but  the   interviewed  company  did  not  require  these  services.

300  provisioning/deprovisioning  requests  per  year.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  4   Total  Costs  (Non-­‐Risk-­‐Adjusted)   Ref.  the  company  estimates  that  75%  of  the  requests  are  eliminated  and  that  60%  of  the  remaining   requests  are  now  handled  by  the  service  desk.000)   ($66.000)   ($66.000)   ($164.  Inc.   • Improved  productivity  (users)  —  password  resets  and  forgotten  URLs.132)   )   Source:  Forrester  Research.132)   )   ($198.  The  interviewed  customer  identified  several  benefit  areas  where   they  were  able  to  realize  tangible  value  as  a  result  of  their  investment  in  Okta.000 Bt   Okta  SaaS  annual  fees     ($66.  a  less  costly  resource.  These  include:   • Reduced  IT  time  spent  on  provisioning/deprovisioning.  anywhere.  or  about  10%  of  the  number  of   users  (1.   • Improved  user  productivity  —  working  more  due  to  “any  device.000)   ($164.  it   processed  more  than  1.000 TCt   Total  costs     ($66.  prior  to  Okta.   • Improved  productivity  (service  desk)  —  password  resets  and  forgotten  URLs.   Benefits   The  next  component  of  this  analysis  examines  the  potential  benefits  associated  with  the  interviewed   organization  investing  in  Okta  cloud  services.   Cost   Initial   Year  1   Year  2   Year  3   Total   PV   ($198.100)  and  average  applications  per  user  (12).  The  interviewed  organization  estimates  that.       Page  9   .”   Reduced  IT  Time  Spent  On  Provisioning/Deprovisioning   Okta  frees  up  IT  administrator  time  from  servicing  provisioning/deprovisioning  requests  and  allows  service   desk  staff  to  complete  the  task  more  efficiently.000)   ($66.  With  just-­‐in-­‐time  provisioning  and  automated   deprovisioning.000)   ($66.

100       Average  number  of  business-­‐oriented   C2       12       applications  per  user   Percentage  of  provisioning/deprovisioning   C3       10%       per  application  per  year   Number  of  provisioning/deprovisioning   C4   C1*C2*C3     1.   )*(C7-­‐C12)   Annual  savings  from  reduced  IT  admin  time   Ct   C8+C13     $23.   Page  10   .15       Savings  from  moving  requests  from  IT   (C6*C9*C11 C13     $4.323   spent  provisioning/deprovisioning   Source:  Forrester  Research.  prior  to  Okta  and  using  IT   C6*C7     $19.275       administrators   Percentage  of  provisioning/deprovisioning   C9   requests  eliminated  due  to  just-­‐in-­‐time       75%       provisioning  and  automated  deprovisioning   Savings  from  elimination  of   C10   C8*C9     $14.323   $23.048       administrator  to  service  desk.   Metric   Calculation   Initial   Year  1   Year  2   Year  3   C1   Number  of  users       1.  per   C8   year.456       provisioning/deprovisioning  requests   Percentage  of  post-­‐Okta   C11   provisioning/deprovisioning  requests  now       60%       handled  by  help  desk   C12   Service  desk  hourly  rate   A4     $31.320       requests  per  year   IT  admin  time  spent  on   C5   provisioning/deprovisioning  (minutes  per       15       request)   Total  IT  admin  time  spent  on   C6   C4*(C5/60)     330       provisioning/deprovisioning  (hours/year)   C7   IT  administrator  hourly  rate   A3     $58.41       IT  cost  on  provisioning/deprovisioning.323   $23.  Inc.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  5   Reduced  IT  Time  Spent  On  Provisioning/Deprovisioning   Ref.

 The   organization  reported  nearly  12  of  these  incidents  per  user.  Inc.300       *(D4/60)   desk)   D6   Service  desk  hourly  rate   A4     $31.   Metric   Calculation   Initial   Year  1   Year  2   Year  3   D1   Number  of  users       1.  per  year  (service     3.   Improved  Productivity  (Users)  —  Password  Resets  And  Forgotten  URLs   There  is  a  corresponding  productivity  improvement  for  users  in  the  reduction  of  service  desk  calls  for  password   resets  and  lost  or  forgotten  URLs  as  the  users  do  not  spend  this  time  making  the  request  to  the  service  desk.   Page  11   .  minutes  per  incident       15       Number  of  hours  spent  on  password   D1*D2*D3 D5   reset/forgotten  URLs.  the  interviewed  organization  estimates  that   the  number  of  service  desk  calls  due  to  password  resets  and  lost  or  forgotten  URLs  is  reduced  by  80%.100       Average  number  of  business-­‐oriented   D2   C2     12       applications  per  user   Password  reset/lost  URL  incidents  per  user   D3       1       per  application  per  year   D4   Password  reset.236   $82.795       resets  and  forgotten  URLs   Reduction  in  password  resets/forgotten   D8       80%       URLs  due  to  Okta   Savings  from  improved  productivity  from   Dt   reduced  password  reset/forgotten  URLs   D7*D8     $82.   Table  6   Improved  Productivity  For  Service  Desk  From  Reduced  Password  Reset  And  Lost  URL  Incidents   Ref.236   $82.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   A  further  (non-­‐quantified)  benefit  is  that  provisioning  is  done  faster.236   incidents   Source:  Forrester  Research.   Improved  Productivity  (Service  Desk)  —  Password  Resets  And  Forgotten  URLs   With  Okta  providing  single  sign-­‐on  to  numerous  web  applications.  allowing  users  immediate  access  to   applications  instead  of  often  waiting  a  day  or  two  for  the  request  to  be  processed.  which  approximates  to  about  1  incident  per   application  per  user  (average  of  12  applications).15       Service  desk  cost  to  support  password   D7   D5*D6     $102.  as  shown  in  Table  6.

  Metric   Calculation   Initial   Year  1   Year  2   Year  3   Number  of  hours  spent  on  password  reset.  As  these  types  of   productivity  gains  are  often  deemed  difficult  to  value.   E1   D5     3.  Forrester  applies  a  factor  of  50%  productivity  realized.   Improved  User  Productivity  —  Working  More  Due  To  “Any  Device.  mobile.  Anywhere”   Use  of  Okta’s  web-­‐based  single  sign-­‐on  allows  access  to  critical  enterprise  applications  from  any  device.301   $94.   anywhere  —  remote.  The  interviewed  company  estimates  that  value  is  gained  from   50%  of  its  users  (senior  staff/knowledge  workers)  who  gain  25  minutes  in  access  per  week.876       resets/forgotten  URLs   Reduction  in  password  resets/forgotten   E4   D8     80%       URLs  due  to  Okta   Savings  from  improved  productivity  from   Et   E3*E4     $94.301   reduced  password  reset  incidents   Source:  Forrester  Research.  as   seen  in  Table  8.  Inc.300       per  year  (users)   E2   General  staff  hourly  rate   A5     $35.72       General  staff  cost  spent  on  password   E3   E1*E2     $117.  and  on-­‐premises.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  7   Improved  Productivity  For  Users  From  Reduced  Password  Reset/Forgotten  URLs  Incidents   Ref.       Page  12   .301   $94.

188   more  due  to  “any  device.  anywhere”   Source:  Forrester  Research.  Inc.375       F8   Productivity  gain  realized       50%       Increased  user  productivity  —  working   Ft   F7*F8     $446.   F2       60%       anywhere”   Number  of  users  impacted  by  “any   F3   F1*F2     660       device.  anywhere”   Increased  time  spent  accessing   F4       25       applications  (minutes  per  week)   Increased  time  spent  accessing   F3*(F4/60) F5     13.  Anywhere”   Ref.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  8   Improved  User  Productivity  From  Working  More  Due  To  “Any  Device.90       F7   User  productivity  equivalent   F5*F6     $892.750       applications  (50  weeks  per  year)   *50   F6   Knowledge  worker  hourly  rate   A6     $64.188   $446.       Page  13   .   Metric   Calculation   Initial   Year  1   Year  2   Year  3   F1   Number  of  users       1.188   $446.   Total  Benefits   Table  9  summarizes  the  total  benefits  (non-­‐risk-­‐adjusted)  associated  with  the  purchase  of  Okta  devices.100       Percent  of  users  utilizing  “any  device.

143   $1.  “Impact  risk”  refers  to  the  risk  that  the  business  or   technology  needs  of  the  organization  may  not  be  met  by  the  investment  in  Okta.602   anywhere”   TBt   Total  benefits     $646.  This  provides  an  organization  with  the  “right”  or   the  ability  to  engage  in  future  initiatives.  creating  additional  benefits  and  an  additional  cost  per  user.048   $646.048   $1.938.323   $23.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  9   Total  Benefits  (Non-­‐Risk-­‐Adjusted)   Ref.   “Implementation  risk”  is  the  risk  that  a  proposed  investment  in  Okta  may  deviate  from  the  original  or  expected   requirements.  but  not  the  obligation  to  do  so.509   forgotten  URLs   Improved  productivity  (users)  —   Et   password  resets  and  forgotten     $94.   Risk   Forrester  defines  two  types  of  risk  associated  with  this  analysis:  implementation  risk  and  impact  risk.338.  In  general.  There  are  scenarios  in  which  a  customer   might  choose  to  implement  Okta  services  and  later  realize  additional  benefits.   Quantitatively  capturing  investment  and  impact  risk  by  directly  adjusting  the  financial  estimates  results  in  more   meaningful  and  accurate  estimates  and  a  more  accurate  projection  of  the  ROI.  resulting  in  higher  costs  than  anticipated.563   $1.  An  example  would  be  if  the   interviewed  organization  had  significant  end  user  growth  and/or  increased  the  number  of  enterprisewide.970   $58.188   $446.002   provisioning/deprovisioning   Improved  productivity  (service   Dt   desk)  —  password  resets  and     $82.323   $23.  As  the   interviewed  company  indicated  that  it  was  entering  a  “steady-­‐state”  after  three  years  in  which  the  number  of   users  and  supported  applications  is  stable.109.  represents  an  investment  in  additional  capacity  or  capability  that  could  be  turned   into  business  benefit  for  some  future  additional  investment.512   URLs   Improved  productivity  —  working   Ft   more  due  to  “any  device.708   $204.048   $646.323   $69.188   $446.  the  wider  the  potential  range  of  outcomes  for  cost  and  benefit  estimates.  risks  affect  costs  by   Page  14   .   cloud-­‐based  applications  via  Okta.   Flexibility   Flexibility.     $446.236   $246.301   $94.  as  defined  by  TEI.902   $234.   Benefits   Initial   Year  1   Year  2   Year  3   Total   PV   Reduced  IT  time  spent  on   Ct     $23.606.301   $94.236   $82.625   Source:  Forrester  Research.  The  greater  the  uncertainty.301   $282.  Inc.  no  additional  flexibility  benefits  are  calculated  in  this  analysis.236   $82.288   $1.  resulting  in  lower  overall  total   benefits.

 Forrester  has  conservatively  used  “low”   risk  adjustments  to  increase  cost  estimates  by  8%  and  decrease  benefit  estimates  by  17%.   Table  10  shows  the  values  used  to  adjust  for  risk  and  uncertainty  in  the  cost  and  benefit  estimates.  The  risk-­‐adjusted   numbers  should  be  taken  as  “realistic”  expectations  since  they  represent  the  expected  values  considering  risk.  To  construct  the  distribution.  most  likely.   Table  10   Cost  And  Benefit  Risk  Adjustments   Most     Low   High   Mean   likely   Costs   100%   100%   125%   108%   Benefits   50%   100%   100%   83%   Source:  Forrester  Research.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   raising  the  original  estimates.  and  high  values  that  could  occur  within  the  current  environment.       Page  15   .   The  risk-­‐adjusted  value  is  the  mean  of  the  distribution  of  those  points.  it  is   necessary  to  first  estimate  the  low.  The  TEI   model  uses  a  triangular  distribution  method  to  calculate  risk-­‐adjusted  values.  Readers  are  urged  to   apply  their  own  risk  ranges  based  on  their  own  degree  of  confidence  in  the  cost  and  benefit  estimates.  and  they  affect  benefits  by  reducing  the  original  estimates.  Inc.

263)   Benefits   $0   $536.000)   ($164.000)   ($66.220   $536.840)   ($177.333.394.940   $464.606.  These  values  are  determined  by   applying  the  risk-­‐adjustment  values  from  Table  10  in  the  Risk  section  to  the  cost  and  benefits  numbers  in  Tables   4  and  9.  and  payback  period  values.048   $1.156.  Inc.  These  are  shown  in   Table  11  below.143   $1.  NPV.048   $646.940   $1.236   ROI   652%             Payback  period   2  months             Source:  Forrester  Research.499   Net  benefits   $0   $464.220   $1.     Page  16   .   Table  12   Cash  Flow  —  Risk-­‐Adjusted     Initial   Year  1   Year  2   Year  3   Total   Present  value   Costs   $0   ($71.608.625   Net  benefits   $0   $580.819   $1.493   ROI   879%             Payback  period   2  months             Source:  Forrester  Research.132)   Benefits   $0   $646.280)   ($71.442.048   $646.000)   ($198.220   $536.280)   ($71.859   $1.048   $1.   Table  12  below  shows  the  risk-­‐adjusted  ROI.000)   ($66.  Inc.  net  present  value.143   $1.  and  payback  period  for  the  organization’s  investment  in  Okta.280)   ($213.   Table  11   Cash  Flow  —  Non-­‐Risk-­‐Adjusted     Initial   Year  1   Year  2   Year  3   Total   Present  value   Costs   $0   ($66.940   $464.740.048   $580.048   $580.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Financial  Summary   The  financial  results  calculated  in  the  Costs  and  Benefits  sections  can  be  used  to  determine  the  return  on   investment.938.

000   $20.000   $20.000   Gt   In-­‐house  AD  integration  costs  for  SSO   G3+G5   $200.000   $20.000         SSO  (initial  expense)   AD  integration  cost.  The   organization  further  estimates  a  maintenance  cost  of  10%  of  the  development  costs  per  year.  but  the  interviewed  organization  did  not  research  or  estimate  these  expenses.  per   G2     $25.   Additional  costs  may  have  been  incurred  for  multi-­‐factor  authentication  via  a  point  solution  and  to  develop   application  connectors.000   Source:  Forrester  Research.  For  SSO   Ref.000   $20.   Metric   Calculation   Initial   Year  1   Year  2   Year  3   G1   Number  of  applications     8         In-­‐house  AD  integration  for  SSO.   Table  13   In-­‐House  Application  Development  Costs.  That  is.000   $20.  maintenance  per  year   G4       10%       (as  percent  of  initial  cost)   G5   Cost  for  in-­‐house  application  maintenance   G3*G4     $20.   Table  14  and  Figure  3  show  the  comparison  of  Okta  costs  (opex)  to  in-­‐house  development  (capex  and  opex)   over  a  three-­‐year  period.  having  experience  in  developing  integrations  for  applications  before  Okta.  the   interviewed  organization  estimates  that  it  cost  them  $25.       Page  17   .000         application   Cost  for  in-­‐house  AD  integration  costs  for   G3   G1*G2   $200.000  per  integration  for  the  most  important   enterprisewide  applications  and  that  those  would  have  been  done  initially  as  part  of  the  cloud  initiative.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Total  Cost  Of  Ownership  Of  Okta  Compared  With  In-­‐House  Development   The  interviewed  organization  also  provided  estimates  for  the  cost  of  in-­‐house  development  of  SSO  integration   for  applications.  Inc.  and  so   they  have  not  been  included  in  the  analysis.

000) ($250.000)   ($249.000)   ($20.000) CAPEX ($100.000) OPEX ($150.000)   ($66.000)   ($198.   Cost   Initial   Year  1   Year  2   Year  3   Total   PV   TCt   Okta  SaaS  annual  fees     ($66.000) Okta In-House $0   Source:  Forrester  Research.000)   ($20.   Figure  3   TCO:  Okta  Compared  With  In-­‐House  Development  (Three-­‐Year  Analysis)   3-year TCO: Okta vs.  Inc.000)   ($164.000)   ($260.132)   ($200.  Inc.000)   ($66.       Page  18   .737)   )   Source:  Forrester  Research.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Table  14   TCO:  Okta  Compared  With  In-­‐House  Development   Ref.000) ($200.000 TCt   Total  costs   ($20. in-house ($300.000) ($50.

 Built  on  a  secure.   Enterprises  are  using  Okta  to  increase  security.  single  sign-­‐on.  directories.       Page  19   .  and  ensure   compliance.  Okta  delivers  identity  management  from  the  cloud  but  for  a  hybrid  IT  world.  workflow.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Okta  On-­‐Demand  Identity  And  Access  Management:  Overview   According  to  Okta.  devices.  partners.  and  people  that  you   need  to  integrate  with  —  whether  those  integrations  are  in  the  cloud  or  behind  a  firewall.  consumer  web  UI.  mobile.  SOC2  Type  II  audited  platform   that  operates  at  Internet  scale.  reduce  IT  costs.  provisioning.  organizations.  improve  user  productivity.  strong   authentication.  and  supported  market-­‐leading.  Okta   integrates  with  all  of  the  applications.  identity  systems.  and  on-­‐premises  web  applications  across   employees.  on-­‐demand  and  enterprise  software.   Managed  via  an  intuitive.  Okta  is  the  market-­‐leading  on-­‐demand  identity  and  access  management  service  that  enables   enterprises  to  simply  and  securely  manage  access  to  cloud.okta.  and  analytics.  deployed.   The  Okta  team  has  built.  and  customers.  Okta’s  functionality  spans  directory  services.  reliable.com.  please  visit:  http://www.   For  more  information.

 IT  or  the   business  units  may  incur  costs  in  the  form  of  fully  burdened  labor.  direct  benefits  represent  one  part  of  the  investment  value.  Often  product  or  project  justification  exercises  focus  just  on  IT  cost  and  cost  reduction.  The  TEI  methodology  helps  companies  demonstrate.  and   flexibility.  The  TEI  methodology  and   the  resulting  financial  model  place  equal  weight  on  the  measure  of  benefits  and  the  measure  of  costs.   Risk   Risk  measures  the  uncertainty  of  benefit  and  cost  estimates  contained  within  the  investment.  or  benefits.  justify.  Calculation  of  benefit  estimates   involves  a  clear  dialogue  with  the  user  organization  to  understand  the  specific  value  that  is  created.  allowing   for  a  full  examination  of  the  effect  of  the  technology  on  the  entire  organization.   The  TEI  methodology  consists  of  four  components  to  evaluate  investment  value:  benefits.  Flexibility  represents  the  value  that  can  be  obtained  for  some   future  additional  investment  building  on  top  of  the  initial  investment  already  made.   Benefits   Benefits  represent  the  value  delivered  to  the  user  organization  —  IT  and/or  business  units  —  by  the  proposed   product  or  project.  of  the  proposed  project.  an  investment   in  an  enterprisewide  upgrade  of  an  office  productivity  suite  can  potentially  increase  standardization  (to   increase  efficiency)  and  reduce  licensing  costs.  While  direct  benefits   can  typically  be  the  primary  way  to  justify  a  project.  Uncertainty  is   measured  in  two  ways:  1)  the  likelihood  that  the  cost  and  benefit  estimates  will  meet  the  original  projections.  TEI  applies  a  probability   density  function  known  as  “triangular  distribution”  to  the  values  entered.  For  instance.  Costs  consider   all  the  investments  and  expenses  necessary  to  deliver  the  proposed  value.   leaving  little  room  to  analyze  the  effect  of  the  technology  on  the  entire  organization.   Forrester  also  requires  that  there  be  a  clear  line  of  accountability  established  between  the  measurement  and   justification  of  benefit  estimates  after  the  project  has  been  completed.  In  addition.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   Appendix  A:  Total  Economic  Impact™  Overview   Total  Economic  Impact  is  a  methodology  developed  by  Forrester  Research  that  enhances  a  company’s   technology  decision-­‐making  processes  and  assists  vendors  in  communicating  the  value  proposition  of  their   products  and  services  to  clients.  the  cost  category  within   TEI  captures  any  incremental  costs  over  the  existing  environment  for  ongoing  costs  associated  with  the   solution.  At  minimum.  three  values  are   calculated  to  estimate  the  underlying  range  around  each  cost  and  benefit.  and  realize  the   tangible  value  of  IT  initiatives  to  both  senior  management  and  other  key  business  stakeholders.  Forrester  believes  that  organizations  should  be  able  to   measure  the  strategic  value  of  an  investment.  In  addition.   Flexibility   Within  the  TEI  methodology.  an  embedded  collaboration  feature  may  translate  to   Page  20   .  All  costs  must  be  tied  to  the  benefits  that  are  created.  or  materials.  risks.  subcontractors.  However.  This  ensures  that  benefit  estimates  tie   back  directly  to  the  bottom  line.  costs.   Costs   Costs  represent  the  investment  necessary  to  capture  the  value.   and  2)  the  likelihood  that  the  estimates  will  be  measured  and  tracked  over  time.

 Forrester  assumes  a  yearly  discount  rate  of  10%  for  this  analysis.   A  Note  On  Cash  Flow  Tables   The  following  is  a  note  on  the  cash  flow  tables  used  in  this  study  (see  the  example  table  below).  Net  present  value  (NPV)  calculations  are  not  calculated  until  the  summary  tables   and  are  the  sum  of  the  initial  investment  and  the  discounted  cash  flows  in  each  year.  The  flexibility  component  of  TEI  captures  that  value.  The  PV  of  costs  and  benefits  feed  into  the  total  net  present  value  of  cash  flows.  ROI  is   calculated  by  dividing  net  benefits  (benefits  minus  costs)  by  costs.  All  other  cash  flows  in  Years  1  through  3  are  discounted  using  the  discount  rate  (shown  in   Framework  Assumptions  section)  at  the  end  of  the  year.  having  the  ability  to  capture  that  benefit  has  a  present  value  that   can  be  estimated.   Payback  period:  The  breakeven  point  for  an  investment.   Although  the  Federal  Reserve  Bank  sets  a  discount  rate.   Table  [Example]   Example  Table   Ref.Forrester  Consulting   The  Total  Economic  Impact™  Of  Okta  On-­‐Demand  Identity  And  Access  Management  Service   greater  worker  productivity  if  activated.   Present  value  (PV):  The  present  or  current  value  of  (discounted)  cost  and  benefit  estimates  given  at  an   interest  rate  (the  discount  rate).  Present  value  (PV)  calculations  are  calculated  for  each   total  cost  and  benefit  estimate.   Readers  are  urged  to  consult  their  respective  organization  to  determine  the  most  appropriate  discount  rate  to   use  in  their  own  environment.  Inc.   Net  present  value  (NPV):  The  present  or  current  value  of  (discounted)  future  net  cash  flows  given  an   interest  rate  (the  discount  rate).   unless  other  projects  have  higher  NPVs.   Return  on  investment  (ROI):  A  measure  of  a  project’s  expected  return  in  percentage  terms.  companies  often  set  a  discount  rate  based  on  their   business  and  investment  environment.  The  point  in  time  at  which  net  benefits  (benefits   minus  costs)  equal  initial  investment  or  cost.  A  positive  project  NPV  normally  indicates  that  the  investment  should  be  made.  The  initial   investment  column  contains  costs  incurred  at  “time  0”  or  at  the  beginning  of  Year  1.   Category   Calculation   Initial  cost   Year  1   Year  2   Year  3   Total                   Source:  Forrester  Research.  The  collaboration  can  only  be  used  with  additional  investment  in   training  at  some  future  point  in  time.  Those  costs  are  not   discounted.   Page  21   .   Appendix  B:  Glossary   Discount  rate:  The  interest  rate  used  in  cash  flow  analysis  to  take  into  account  the  time  value  of  money.  However.