Okta’s Canadian bet: Data cell, 600 employees, and a plan to triple the business

Robert Dutt: Hello and welcome to In The Channel from ChannelBuzz.ca, bringing news and information to the Canadian IT channel community for the last 16 years. I’m Robert Dutt, editor of ChannelBuzz.ca, and your host for the show.

Here’s a question I think about a lot. What does it actually mean when a global tech vendor says they’re investing in Canada? Because there’s a spectrum, right? On one end, you’ve got a vendor that sells into Canada from a US office, maybe sends someone up to a conference once a year. On the other end, you’ve got real infrastructure, real headcount, real commitment to treating Canada as a market with its own needs and its own opportunities. Somewhere in the middle is where most vendors actually land.

Today I’m talking to Ryan Sydor, the head of Okta Canada. Okta’s been making some pretty significant moves here over the past year or so. They launched a Canadian data cell, they’ve redesigned their Toronto office, and they’ve now got over 600 employees in the country. If you caught our recent conversation with Okta’s Jack Hirsch about shadow AI and non-human identity, think of this as the companion piece. That was the global product story. This is the Canadian market story – what Okta’s building here and what it means for partners.

Let’s get into it. My chat with Ryan Sydor.

Robert Dutt: Ryan, thanks for taking the time.

Ryan Sydor: Good to see you again, Robert.

Robert Dutt: You’re in this role heading Canada at a pivotal moment. New office, new data cell in Canada, new channel chief on the global level. When you look at the Canadian market for identity, what’s the picture that you walked into and what’s the mandate that you’ve been given for the Canadian organization?

Ryan Sydor: Well, the market obviously has changed, and there’s been a focus in the last six months that has been dominating every conversation. It’s AI. Every conversation we have with a customer or prospect is around AI. There’s a curiosity around it, there’s an urgency, there is uncertainty. Everyone’s trying to figure out how do we use AI to improve our business and at the same time, protect our business and ensure that we’re safe. It’s this balance of the need for cybersecurity, the need to protect your organization. Cybersecurity attacks have increased 200 percent year over year, and it was on a high baseline as it was.

Customers are really focused on how do we stay safe and keep our company and our brand safe. At the same time, AI has changed the way we think about running a business in ways I’m not sure companies fully understand yet. How do we leverage innovation to stay ahead of our competition? The opportunity where you can vault ahead, you can really differentiate, create new business streams, create new efficiencies, and do it at the same time that you’re secure.

The mandate that we have is not just a Canadian mandate. The mandate is how do we help our customers along that journey, and how do we do it quickly? Because this is all happening fast. It’s an unpaved road in some respects. No one really knows exactly how it’s going to play out, but we understand the value and the benefit and the risks that come with it. We feel at Okta that we’re really well positioned to help our customers, partner with them, and help keep them safe while still allowing them to be innovative.

From a Canadian perspective, our goal is how do we partner with our customers and with Canadian businesses, help paint that picture, sit with them on the same side of the table, and put together our plans so that they can innovate and be safe. And from a channel partner perspective, one of the major pillars that we have as an organization this year is to partner. We’re focused on AI, we’re focused on a better methodology of how we approach our customers, and then it’s about being a partner-first organization. What I’ve seen with our new SVP is a stronger alignment with our partners, making sure that these conversations that we’re having, we’re having together. A lot of this is about relationships, it’s about comfort, it’s about trust, and who better to work with than our partner network.

Robert Dutt: Sticking with the theme of the Canadian investment, when Okta looks at Canada as a market, are we at the “we need a flag planted here” level, or is there something structurally different about the Canadian opportunity that’s driving the investment at this point?

Ryan Sydor: I think it is AI, and it’s our need to partner with organizations. I think it’s also the opportunity that Okta sees. When we invest in the data cell, it opens up the market to companies that we haven’t been able to sell to in the past. The regulated industries, local governments, provincial governments, federal governments. That presents a great opportunity for us as an organization, and it’s a need for these different levels of government. There are regulations that have come out, C-8 and the need to be more focused on cybersecurity. We as the trusted identity company are a good fit at this time with those organizations.

Robert Dutt: You touched on the data cell that went live this quarter. For partners and customers who aren’t themselves deep in the identity space, can you explain what that actually is and what it means in practice? What changes for a customer on day one of being on the Canadian cell versus where they were before?

Ryan Sydor: It means the data is hosted in Canada. The data cell is in Montreal. We have a failsafe in Calgary. So it means that those companies that need to have their data in Canada, managed by Canadians, now have the opportunity to do so.

Robert Dutt: You touched on how that unlocks government and other areas. Can you explain what are the verticals and what types of deals weren’t on the table before but are now?

Ryan Sydor: There’s two kinds. First of all, there’s the federal government. There were RFPs that came through that we couldn’t even bid on, because without data residency, you’re not eligible to bid. So it does open up that opportunity. Then there are companies who are making decisions on where they want their data. It’s a decision around regulation, but also it’s a costing question. It’s about what their customers are comfortable with. There have been customers in the past who have asked to be on the EU cell or have chosen to go with other options. Now they have the opportunity to work with Okta with our workforce product and have their data hosted in Canada.

Robert Dutt: A few years ago, you were running about 70% of Canadian revenue through partners with a pretty small direct team. Is that still the ratio today, or how has that shifted?

Ryan Sydor: The number has increased. I think that number is over 80% from last year. Our direct team has grown a little bit, but the partnership is meant to help really scale the business. I’ll give you an example of how we’ve prioritized partners to help us grow. We actually invested to have partners join us at our sales kickoff this year, where we went through a new sales methodology, and we wanted our partners to be with us so that we could sell together. It wasn’t all our partners, it was a select group of partners. But it was the company demonstrating that as a partner-first organization, we’re now eliminating the silos. We understand the same language, we think about the business the same way, and we think that’s going to be beneficial to our partners, to our customers, and obviously to Okta as well.

Robert Dutt: Expanding on that, with Laura Padilla coming in as channel chief globally, she’s talked about doubling down on partners in every geography and driving more toward partner-led markets. From what you’re saying, it sounds like Canada is firmly in that space. What does that mean practically for an MSP or a VAR who’s working with you or potentially working with you?

Ryan Sydor: What I hope it means is, one, as we continue to focus on being partner-first, it means that we should be speaking earlier. That’s the first thing we’re trying to do, make sure we’re aligned earlier. We’re investing in programs and processes to make sure that we’re talking to our VARs, that we understand who the relationships are, and make sure we leverage them. And doing that on a consistent basis where we build trust not only with the customer, but between the partners and Okta. We think this is so important because the customers are talking about AI. As I mentioned, there’s uncertainty, and they’re looking for their trusted partners to help advise them. So the more we’re aligned, the more we have people who are trusted, who have solutions and opinions that can support the customer base, it’s beneficial for all parties.

Robert Dutt: Okta’s own data says that something like 93% of Canadian businesses are using AI agents, but a very small percentage, maybe 1%, have a strategy for managing non-human identities. I recently talked to Jack Hirsch, who heads up product for you, about the shadow AI problem from the product side. From where you’re sitting looking at the Canadian business, what are you hearing from customers about this? Is the awareness there, or are people still in the “that’s a tomorrow problem” or “that’s somebody else’s problem” phase?

Ryan Sydor: No, I heard the interview with Jack, and I heard your comment about unintended consequences. I think that is the message that we’re hearing from senior-level CISOs and IT leaders at our customers. They understand the need for governance. They understand the need for control. Again, it’s this balance that our customers are facing: how do you go fast, but how do you do it in a safe way? They recognize that it’s an important thing and it’s not something to be overlooked. AI agents become the new attack front, the new point of entry for bad actors. That’s why we’re having as many conversations as we are right now, because everyone is trying to figure it out and trying to figure out what great looks like.

Robert Dutt: When you’re having that conversation, where do you see partners fitting in? Is it something partners can lead on, or is it something Okta takes the lead on and partners follow?

Ryan Sydor: In most cases, it’s the partner relationship that helps us get to the conversation. And then it is generally an Okta-led conversation. We have a dedicated team that will have those conversations with the customers. What we’re trying to do is figure out what our customers are doing, what is the plan, what’s in place, what initiatives are coming up, how do we align, where are the governance controls that we can help with. But it’s a conversation that comes from the Okta side.

Robert Dutt: The federal government has been signaling hard on digital sovereignty. There’s talk of a billion-dollar sovereign cloud investment, procurement requirements are tightening. Is that creating tailwind for you, or is it more complicated than that?

Ryan Sydor: Having our own data cell has certainly made it very important. The conversation around data in Canada is becoming, especially for government and these regulated industries, really important. But I think possibly in time you may see more companies who are not required to have their data held in Canada choose to do so.

Robert Dutt: French language support also came alongside the data cell launch. How important is that in the Quebec market, and can you talk about how that fits into the Canadian strategy and opens up your partner plays in la belle province?

Ryan Sydor: I’ll go back to government opportunities in Quebec. If you don’t have French language capabilities, you can’t bid on many of these contracts and RFPs. So what it’s doing is obviously an investment and a commitment in supporting all of Canada, and it opens up a door for us to focus on helping a very big opportunity. In many of those cases, the relationships with partners are how we have those conversations. Partners who are dealing with the government of Quebec now have the opportunity to work with Okta.

Robert Dutt: Just a couple of lightning round quick answers before we wrap up. What’s the biggest misconception you hear from Canadian partners about the identity market right now?

Ryan Sydor: I’m not sure I’d call it a misconception. I think it’s perhaps understanding where Okta fits with AI, as everything is happening so fast. But we’ve invested a lot of money in training, not only our partners in our sales methodology, but training them in how Okta supports customers with AI. So I wouldn’t say there’s a misconception. I think there’s an alignment to ensure that we’re having the conversations that our customers want to have.

Robert Dutt: What’s one thing that you wish every MSP in Canada would start doing tomorrow?

Ryan Sydor: I think every MSP in Canada should be having conversations with their customers about AI, trying to understand what the strategy is, understand where the challenges are, and having Okta join them to help with those conversations.

Robert Dutt: What’s the most underrated vertical opportunity in Canada for you right now?

Ryan Sydor: I think we have opportunity in lots of verticals. Financial services – I’d almost say underrated, but I think where we want to spend a lot of time, we’re seeing a lot of traction. We see a lot of traction in technology. And clearly we talked about government. I think there is a tremendous opportunity in the public sector – underrated in how things have operated up to this point, but creates the greatest opportunity for us moving forward.

Robert Dutt: And finally, fill in the blank for me. In two years, Okta Canada will be…

Ryan Sydor: Triple in size.

Robert Dutt: That’s a good place for you to be, and that’s a great place for partners, I think. Ryan, I appreciate your taking the time. It’s been an interesting conversation, and good luck reaching that triple-the-size number.

Ryan Sydor: Thank you. Appreciate it.

Robert Dutt: There you have it – Ryan Sydor from Okta Canada.

I’d like to thank Ryan for his time, and thank you for listening.

So here’s what I’d take away from this one. Okta is running over 80% of Canadian revenue through partners now, up from around 70% a couple of years ago, and they’re backing that up with real investment – 600-plus employees, a Montreal-based data cell with a Calgary failsafe that unlocks regulated verticals like government and healthcare, and they’re bringing partners to their own sales kickoff to learn the same methodology their sellers use. Ryan says he wants to triple the Canadian business in two years. That’s ambitious, but the pieces are being put in place.

For partners, the bigger signal here is that identity is becoming a practice area you can’t afford to ignore. Between data sovereignty, AI governance, and the explosion of non-human identities, this is where real services revenue is going to be built. Keep an eye on it.

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Until next time, I’m Robert Dutt for ChannelBuzz.ca, and I’ll see you in the channel.