The unbundling of Okta: are startups chipping away at Okta?

This is a guest post from a friend, Maya Kaczorowski, who is the co-founder of Oblique, a self-serve IGA. She’s worked in product management for several security products at Tailscale, GitHub, and Google Cloud. In this piece, Maya breaks down Okta’s competition and how Okta is not being unbundled, but rather squeezed from all sides.

All eyes are on Okta lately, with a wealth of new startups picking away at their features. This has left customers questioning whether they should buy into the Okta platform wholesale, or pick and choose the features they need from the platform to best serve their needs. Which might make you wonder: is Okta being unbundled?

Unbundling happens when a market incumbent ceases fully serving the needs of specific customer segments or niches. A horizontal platform can provide a ‘good enough’ solution for many, but it won’t provide the best solution for some. Unbundling is a potential way to enter and compete directly with an incumbent in a market. Another company can successfully compete by better serving a specific niche — whether that’s a particular feature set or customer segment.

[Figure 1: The unbundling of Craiglist.]

The canonical example is Craiglist. Companies like Airbnb, Zillow, or Thumbtack built entire businesses by serving specific user journeys better — to discover, interact, and complete their task — than the generalist platform. That doesn’t mean the incumbent doesn’t survive. Craigslist is still very much alive, but it’s likely no longer where you go when you need to find a vacation rental, buy a home, or hire a handyman.

In B2B markets, there are fewer marketplaces. Rather than tackle a specific market segment, unbundling tends to happen for a specific feature set. Expensify took expense reporting from SAP and Oracle, DocuSign took e-signatures from Adobe, and Greenhouse took recruiting from Workday. This is tackling a platform player by competing on a single feature and creating a better point solution — frequently a ‘wedge’ that new companies use to enter a market in the hopes of becoming a platform themselves.

In this post, we’re going to examine whether Okta is being unbundled — and if that's even the right question. As we’ll see, Okta is less of a unified platform and more of a collection of products competing in multiple related markets. Instead of being unbundled, Okta is facing pressure from all directions: it’s being