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Most importantly Auth0 was beating Okta on execution. Auth0 was leaner and would soon get to feature parity for both use cases. Without this deal they would slo
by willeh 6y ago
Most importantly Auth0 was beating Okta on execution. Auth0 was leaner and would soon get to feature parity for both use cases. Without this deal they would slowly have lost ground to Auth0.
- distrill 6y agoThis seems to be so transparently the case, how is this behavior not considered anti competitive?
- WJW 6y agoAlmost any behavior by a company to outdo its competitors can be described as anti competitive, but not all forms are illegal. Straight from the wikipedia page: > Anti-competitive practices are commonly only deemed illegal when the practice results in a substantial dampening in competition, hence why for a firm to be punished for any form of anti-competitive behaviour they generally need to be a monopoly or a dominant firm in a duopoly or oligopoly who has significant influence over the market. Since there are many auth providers (ie https://en.wikipedia.org/wiki/List_of_OAuth_providers https://en.wikipedia.org/wiki/List_of_OAuth_providers) in the market, the takeover of auth0 by okta is not a problem for "the market". It is therefore up to the shareholders of auth0 to sell their shares or not and clearly they chose to cash out instead of gambling that they could continue to out-execute okta and their other competitors.
- nicoburns 6y agoI imagine the parent is questioning why the definition for "a substantial dampening in competition" is so strict. To me it seems that they are claiming that this clearly constitutes a substantial dampening in competition, and are thus questioning why it is not illegal.
- ethbr0 6y agoBy that metric, wouldn't profitless growth-over-capitalizing also dampen competition? It's a tortured argument to say that SoftBank's investments are creating more competition or innovation.
- nicoburns 6y agoYes, indeed it would. I guess the difference is it's harder to be objective about whether something is over capitalized.
- nanis 6y agoFTC's Anti-Trust guide is a useful source[1]. Specifically, the "Mergers"[2] section outlines the cases in which government interference might be efficiency promoting. [1]: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws https://www.ftc.gov/tips-advice/competition-guidance/guide-a... [2]: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/mergers https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
- nicoburns 6y agoDo you think that the Okta acquisition of Auth0 promotes or reduces the competiveness of the market?
- nanis 6y agoClearly, I do not know. Having used both, I do realize their target markets are somewhat separated as is pointed out in the linked article as well. I am dubious on the expansion of Okta's pricing power as a result of this acquisition, but I do not really have the kind of data I would need to be able accurately gauge that.
- Klinky 6y agoBuying a successful competitor is not "outdoing" the competitor, it's almost admitting defeat. While you could say there are other offerings, are they as mature? A big shark swimming in a sea of minnows is not a balanced/competitive market.
- WJW 6y agoDid you see the list of competing auth providers? It's a stretch to call Facebook, Google, Amazon and Microsoft minnows.
- Klinky 6y agoThe assumption you're making is that they have mature offerings because they are big names. Facebook, Google, Amazon and Microsoft have excellent full-featured offerings in every sector they've ever dabbled in? They've never made a bad or neglected product? This is exactly the problem, the assumption that huge conglomerate juggernauts hoovering up or invading every sector is adequate or healthy competition. Also that list seems to be very iffy at listing actual competitors to the Auth0 product offering. Much of it looks like services that use OAuth integration for access to their proprietary platform, not necessarily a dev-focused blank canvas for SSO/CIAM integration within your own app. Many specificly list OIDC as No. The list doesn't even have Auth0 on it.
- andjd 6y agoThe list of companies that offer OAuth is not a list of competitors to the service AuthO provides. It's a confusion that the latter has encouraged to draft on the former's coattails.
- traverseda 6y ago> Almost any behavior by a company to outdo its competitors can be described as anti competitive What? What definition are you using for anti-competitive. What you're describing is competition. Here's the wiki article listing examples of anti-competitive action: https://en.wikipedia.org/wiki/Anti-competitive_practices#Types https://en.wikipedia.org/wiki/Anti-competitive_practices#Typ...
- mooreds 6y agoMakes me wonder why Auth0's board of directors agreed to the sale.
- redisman 6y agoI would guess the 3.5x valuation from last year.
- outside1234 6y agoStacks and stacks of guaranteed money?
- lmeyerov 6y agobecause unlikely to be a bigger buyer later, so sell now or chase ipo. likely vc-controlled, so less risky to get the (winning) liquidity now. once you hit a certain level, you run out of buyers, and thus lose much of your ability to sell at multiples over value... so effective price ceiling.
- mooreds 6y ago> once you hit a certain level, you run out of buyers, There's always salesforce :). No, thank you for a cogent analysis; interesting to me how the incentives shift as you grow and how an IPO can be riskier than a sale.
- lmeyerov 6y agoyep, good comparison! crm bought tableau for $15B+ and google was fine w/ Looker @ $2B, and data is a clear high-ceiling market. not a lot of buyers at that level, so as soon as > $1B, and bought for way more than 10X on revenue, so unclear if/when they'd see $6B again. capital is cheap right now too, and while interest rates are expected to stay low for 3+ yr, in reality no one knows as the current situation is confusing economists...
- bsder 6y agoSoftBank stupid money is gone.
- woot482 6y agoIf this was true and was indeed very little risk in getting there, they wouldn't have sold. Think about it.
- davewritescode 6y agoI'm not sure I agree. The one killer feature that Auth0 has the Okta doesn't is their built in lambdas and they've had it forever.
- connor11528 6y agoThe government has been pitiful at antitrust enforcement since 1981. This needs to change. This merger should be illegal and blocked by the the FTC. Mergers like this make the financiers billions and make the rest of us worse off.