Okta buys fellow identity and access management specialist Auth0 for $6.5 billion

Auth0 will continue as an independent entity, being integrated into Okta’s platform over time

Identity and access management firmOkta is to acquire identity platform Auth0 for $6.5 billion.

The acquisition will strengthen the fast-growing identity company's position in the identity and access management market, which analysts estimate is worth around $55 billion.

Under the terms of the deal, Auth0 will continue as an independent entity, becoming integrated into Okta's platform over time.

Okta says Auth0's identity platform is complementary to its own rather than competitive, and that the move will give its customers more choice.

Identity and access management (IAM) is a key component of modern business systems, and one that has become more important as IT infrastructure has dispersed over cloud and hybrid architectures.

Okta was founded in 2009 as a specialist IAM platform provider and currently boasts 9,400 customers. Okta's Identity Cloud includes Workforce Identity (WI) for employees, contractors and partners, and Customer Identity (CI) for developers. It has seen a boost in its fortunes during the pandemic, with Identity Cloud used almost 16 billion times to access apps and sites, and with MFA usage tripling in 2020.

Auth0 produces an authentication and authorisation platform for web, mobile and legacy applications known simply as Auth0. Features include single sign-on (SSO) orchestrated through universal login, adaptive MFA, breached password detection and a user management console.

On the face of it, the deal raises some eyebrows: Okta and Auth0 operate in the same market and are of a roughly similar size. However, Okta's focus is much more customer-facing while Auth0 is mostly a tool for developers to add IAM functionality. Bringing them together creates a comprehensive offering in a single company.

"Combining Auth0's developer-centric identity solution with the Okta Identity Cloud will drive tremendous value for both current and future customers," said Todd McKinnon, CEO and co-founder of Okta.

"In an increasingly digital world, identity is the unifying means by which we use technology — both at work and in our personal lives."

"Okta and Auth0 have an incredible opportunity to build the identity platform of the future," added Eugenio Pace, CEO and co-founder of Auth0.

"By joining forces, we will accelerate our customers' innovation and ability to meet the needs and demands of consumers, businesses and employees everywhere."

The boards of both companies have approved the transaction, with the acquisition expected to be finalised before the end of July 2021.