Pricing Overview

Okta prices are based on a per-user model, and given it's an Access Management service, all employees typically will need an account. Below are some of the most commonly purchased Okta SKU's:

• Single Sign On
• Adaptive MFA
• Lifecycle Management
• Workflows
• Identity Governance
• Privileged Access
• Preview Sandbox

Okta also has a standard Support SKU. Customers with a TCV between $20k and $199.9k will need Silver Support, which costs 15% of the total SaaS fees. If customers spend $200k+ with Okta, they will need Gold Support, which costs 25% of the total SaaS fees. Support also includes spending with Auth0 since they were acquired from Okta. Support is a mandatory SKU that is included in all Okta contracts based on total spend, since soem customers have 2-3 different contracts and renewal dates with Okta.

All SKU's Okta offered are priced on a cost per user/server/MAU rate aside from Preview Sandbox, that is priced at 15% of the SaaS cost. We have seen Okta be flexible in offering Sandbox at a lower percentage but will not fall below 5%.

Okta offers one, two, and three-year agreements. They prefer multi-year contracts and will provide preferred pricing on a two- or three-year agreement over a one-year deal. Okta is pretty rigid about pricing and will typically only honor a lower SKU rate compared to what was paid the previous year if there is significant growth. Okta also has a partnership with AWS Marketplace so if you want to purchase via the marketplace, you should be pushing to secure free AWS credits. Typically, it will be 2%-3% of the total spend with Okta.

General Strategy

• Pre-Negotiation Preparation
  • Review Usage: Evaluate if all users and features are active with Okta before renewal, and consider reducing the user count or removing features that are no longer needed. Some common ones we've seen have been reduced or removed is Adaptive MFA to MFA or removing Preview Sandbox.
  • Pull-Ahead Renewal: To avoid annual increases, push to complete the renewal early or if Okta is pushing for a true-up.
• Negotiation Tactics
  • Long-Term Commitment: Leveraging a two or three-year agreement with Okta can secure a higher discount, especially if the current deal is a one-year term or a net-new purchase.
  • Budget Constraints: Leverage a pre-approved budget to anchor and drive the overall price down. This approach could secure a one-time discount or a lower SKU cost.
• Cost Reduction Strategy
  • Volume Discounts: If there is expected growth, confirm with Okta if there are any one-time or recurring discounts for adding users during renewal.
  • Partnership: Leverage the long-term partnership with Okta and also lean into any spend with Auth0 to push to increase the discount.
  • Timing: If ahead of the renewal or a new purchase is made, leverage an early or end-of-month signature date with Okta to secure a one-time promotional discount or lower SKU cost. This is most effective when it's Okta's month or Quarter end. Okta's fiscal year ends in January.
• Payment Terms and Conditions
  • Payments Terms: Okta honors standard annual net30 billing and will not budge on honoring quarterly billing but has recently been more flexible with semi-annual or net45 billing. You typically need to provide Okta with a business justification in order to deviate from the standard billing cadence.  
  • Auto-Renewal: Okta has a standard 30-day auto-renewal clause in all agreements, so it is important to make any changes to the agreement 30 days before renewal, or remove it from the agreement all together.
  • Legal Terms: Okta typically will not accept redlines to the MSA unless the annual spend is $200k or more. Still, Okta is flexible in removing the auto-renewal clause.

Custom Strategies

• Strategy #1: Flat Renewal
  • On a renewal with no adjustments to the term, user count, or SKUs, expect to see Okta push a 5%-12% increase in cost for the renewal.
    • Step One: Go into the call knowing how many users you want to move forward with.
      • Decide how many users are currently active and how many will be renewed.
      • It will be helpful to ask Okta to confirm current usage before disclosing the user count you want to proceed with.
      • Review the opt-out language to ensure any adjustments are made before then.
    • Step Two: Gather Pricing from Okta
      • Ask to get a formal quote from Okta; the more quotes requested from Okta, the more ridged they get, so make sure to have a pretty good idea of terms and users before requesting pricing.
      • After receiving the renewal proposal from Okta, reach out to them to book a call to reconnect.
    • Step Three: Negotiate the Price - Budget Constraints
      • Push that, given that the renewal is staying the same, the team cannot pay a premium compared to the current agreement, and finance won't approve anything more than a flat renewal.
    • Step Four: Negotiate the Price - Leverage Timing
      • If you are a month or more before the renewal date, leverage an early signature to waive the uplift in the renewal cost.
• Strategy #2: Reduction Renewal
  • Reducing any aspects, such as the term, user count, or features, with Okta will increase the cost by 8% %- 20% standard, depending on the size or if multiple reductions are being made.
    • Follow steps one and two from Strategy #1
    • Step Three: Negotiate the Price - Budget Constraints
      • Push that the increase Okta is implementing is outside of industry standards and is not something finance can approve.
    • Step Four: Negotiate the Price - Long-Term Commitment
      • Push that while there is a reduction, the team is open to extending the term length to keep the unit cost the same for the renewal.
• Strategy #3: Growth Renewal
  • Adding any features or users with Okta will be the best time to secure discounts with them; typically, they will honor flat pricing or a 3%-5% discount for growth, depending on how much of an increase it is.
    • Follow steps one and two from Strategy #1
    • Step Three: Future Growth
      • Push that this is just what the team needs now, but there is interest in adding more in the future, and that finance will need to see a unit cost that will also accommodate future growth.
    • Step Four: Escalation
      • Escalate to the executive team to connect with Okta directly via a call or email, doubling down on the need for a lower unit cost to get the order approved.
• Strategy #4: Net-New Purchase
  • An initial agreement with Okta will set the tone for the ongoing relationship. Unless there is significant growth, Okta will typically not honor a rare lower than what a team initially signed for.
    • Step One: Understand the Needs of Okta
      • During discovery and demo calls with Okta, don't give up too much; for example, if you are leaning towards adding more features or looking at a multi-year, don't confirm this with the rep and tell them there are still some internal discussions that need to be had.
      • The same goes for usage. If anything, undersell how many users/devices you will need, but also tell the rep you need to go back internally.
    • Follow step two from Strategy #1
    • Step Three: Negotiate Pricing - Competitive Pressure  
      • Allude to the team considering other options and that Okta will need to come down on pricing.
    • Step Four: Negotiate Pricing - Multi-Year
      • If possible, enter into a two—or three-year agreement with Okta to get preferred pricing; consider that finance typically does not accept multi-year agreements on net new purchases.
    • Step Five: Negotiate Pricing - Timing
      • Leverage the fact that approvals can take a while, but if Okta can increase the discount, the team can streamline approvals to get signatures by the end of the month.

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