Cloud Manager Okta Lands $16.5 Million From Greylock and Khosla Ventures

Okta, the start-up service that helps companies wrangle their cloud-based services into a single manageable interface, has just landed a big Series B round of funding from Greylock Partners and Khosla Ventures, joining prior investors Andreessen Horowitz and Floodgate. As part of the deal, Aneel Bhusri, the former PeopleSoft chairman and the co-founder and co-CEO of Workday (he’s also a Greylock partner), will join Okta’s board of directors. David Weiden of Khosla Ventures, a former senior vice president at TellMe, will become a board advisor.

We last heard from Okta CEO Todd McKinnon (pictured above) in December, only a few months after Okta had landed its A round, led by Andreessen Horowitz.

McKinnon’s argument goes like this: In this age of cloud computing, the days when corporations assembled their IT resources by buying servers, installed their own software to run on them, and managed them, are essentially over. Instead, corporate IT will for the most part be a collection of services running in the cloud. What’s missing as yet from that is something to manage and keep track of all those disparate services.

But the vision is bigger than that, McKinnon says. “The future vision is that when you think of the IT services you want to use at your company, you’ll go to Okta and browse through the options, and find out which is the best service for one thing or the other. Okta will be a source for reliable information on what works and what doesn’t,” he told me. “And then when you choose something, you can add it seamlessly with your environment. It gets integrated with your on-premise resources, all your security policies are enforced. And it’s managed for you.”

Getting there means building the company up around the product it currently has, and that seems to be going pretty well so far. But McKinnon says Okta needed a funding injection to kick things up a notch. Customers so far include Pandora Media and Enterasys. “We thought this would be a business aimed at medium-sized companies — say, 2,000 employees or less. What we’ve found is that we’re in a lot of conversations with large enterprises — 5,000 people or more,” McKinnon says. “We thought that was four or five years out. But these companies are making their move to the cloud today, and they’re doing it aggressively.”

All the more reason to go after them now.