Okta enters new resell deal with IBM as they fine tune partner engagement model

Patrick McCue, Okta’s senior vice president of worldwide partnerships

Identity vendor Okta has launched a new partnership with IBM, part of a broader strategy of improving their Go-to-Market efficiency. The IBM relationship is with IBM Security Services. It is explicitly designed to strengthen Okta with very large customers through partnership with a large systems integrator who can not only introduce Okta to these customers, but who can do much of the work of getting the deal done. It’s part of a broader emphasis this year on working with more skilled partners who can play a bigger role in the sales motion. That emphasis has also seen Okta enhance their partner training, and expand their distribution to do more of the work with lower-tiered partners.

This is the first formal collaboration between Okta and IBM.

“They do manage a few Okta customers globally, and have done an implementation at a joint customer, but they were not a formal partner and had no ability to resell us until now,” said Patrick McCue, Okta’s senior vice president of worldwide partnerships. “This is a net new formal partnership, which is focused on two areas with IBM Security Services. They can resell our technology. They can also implement our technology at their customers.”

The partnership with IBM Security Services is explicitly focused on deepening Okta’s business at the top end of the market.

“Our Go-to-Market with them is absolutely in the Global 1000 companies,” McCue said. “That’s the focus. We work with all the global systems integrators, but with the others we work with them across the board to all the customers they server. This relationship with IBM is focused on them bringing us in to be a component of an implementation at very large customers”

The new IBM relationship reflects the fact that the large global systems integrators [GSIs] are becoming a more important component of Okta’s partner channel

“Systems integrators  are our fastest growing partner group, as we have focused more on the world’s largest organizations.” McCue indicated. “We are seeing a higher level of adoption at those companies as they get more cloud focused. Large organizations will have years of technology sitting there and slowly migrate it to the cloud.”

McCue said that a major strength for Okta in this market is the Okta Integration Network, which includes over 6,500 pre-built integrations with cloud and on-prem software technologies.

“The best advantage we have is time to value with pre-built integrations,” he said. “They allow these customers to work with any other vendor they choose for the other pieces. Because we don’t have a heavy services imprint, we rely on those prebuilt integrations to provide very quick time to value.”

The greater focus on GSIs is part of a larger strategic initiative within Okta this year designed to improve their partner relationship management and make their channel more effective.

“We are trying to change the engagement model within our direct team,” McCue said. “Historically, partners have registered an opportunity. Our sales team does most of the work, and then the deals go on the partner’s paper. This year, we want to get the partners more engaged.”

McCue said that this change in focus reflects a logical maturity in Okta’s approach to the channel.

“When I started here, two years ago, we were just entering into the channel business,” he said. “To get to the scale we need, we need more partners who can do more aspects of a deal, and have our Account Directors be more like sales managers working with partners, especially since we don’t want to build a large services organization.”

Major changes to Okta’s training is part of this.

“We are streamlining and enhancing the training they receive, so they can do demos and proof of values more effectively,” McCue said. “The biggest change for the large integrators here is that we took the pricing barrier away for our certification training and we put it all online. They now get access to 52 courses their consultants can take online. In the past we charged for that.”

The free courses are available to Okta Premier and Elite partners, which includes all of the GSIs. The Select and Associate partners will see their course fees reduced significantly, although there will still be a charge.

Okta is also freeing up more of its own resources to work with its top-tiered partners by expanding their distribution to provide support for the lower tiers.

“We are adding new distribution, so we can focus ourselves on the partners who will invest more with us,” McCue said. “We are working with Cloud Harmonics, which brings SaaS and cloud to distribution.” Cloud Harmonics was purchased by Ingram Micro in late 2017, and like Promark, is operated by them separately.

While Cloud Harmonics works in Canada as well as in the U.S., Okta’s deal with them as of now is U.S. only.

“Right now, this is just for the U.S., although we are looking at distributors in Canada,” McCue noted.