Q&A

A Post-Password World?

Okta is the biggest company in digital identity. OK great, but what does that mean? Essentially, it helps customers securely authenticate employees or users. 

We wanted to hear about the future of safe passage on the information superhighway. So, we sat down with Okta CEO Todd McKinnon to chat about that, his company’s recent mega-deal, and more.

A shortlist

Consolidation: Early last month, Okta announced that it would acquire Auth0, another identity company, for ~$6.5 billion. Contextualizing the deal, McKinnon said Okta has historically built services and sold them to corporate officers of big companies. Auth0, on the other hand, builds for developers. 

• McKinnon sees more M&A ahead in the “fragmented” market of identity and security. 

User base: Roughly 75% of Okta’s customers are companies that need help managing employee logins, authentication, and the like. The remaining 25% are companies that need an identity layer for customer-facing services. The MLB, for example, uses Okta for its mobile app. 

Digital hygiene: An iron law of the internet is that the more friction a security measure involves, the less likely you are to use it. Security is “a mess today,” McKinnon said, because the tech industry has “just done a crappy job integrating it all.” 

SMS two-factor authentication (2FA): A recent Motherboard story highlighted a pretty jarring flaw in SMS. Since so many services use text messaging for 2FA, should we be worried? “At some level, if the vulnerabilities are infrequent or esoteric enough, the value of having the factor outweighs the vulnerabilities.” The tipping point is “getting close” with SMS, McKinnon said. 

Bottom line

Okta operates in what would seem like a very niche space. But the explosive growth of the internet economy opened the door for it to become a $30 billion publicly traded company. If you made that prediction 15 years ago, McKinnon suggested, haters would say it’s fake. 

+ Want more? For McKinnon’s POV on logging in via Facebook/Google/Apple, biometric authentication, and ~magic~ links, find our full Q&A here. 

AR

Microsoft’s Lucrative Business Line

In venture capital, “return the fund” signifies an exit that’s so big, it pays back all of the investments. Microsoft's recently announced HoloLens contract could return all its AR R&D costs and then some. 

The tech company will build 120,000+ modified headsets for the Pentagon, in a deal that could be worth nearly $22 billion over the next decade, a spokesperson told CNBC. 

Four takeaways 

1. This announcement implies three price tiers for AR headsets. Consumer = N/A. Enterprise = $3,500. Military = ~$100k+ range. Pentagon HoloLenses will include more expensive and sophisticated sensors, such as thermal cameras. 
2. This contract’s size should drive down the price points of consumer and commercial AR hardware. 
3. Microsoft is quickly becoming a big US military supplier. Remember its $10 billion JEDI cloud deal with the Pentagon? 
4. Some employees have objected to Microsoft’s military sales, writing in 2019 that they “did not sign up to develop weapons.” In response, CEO Satya Nadella told CNN: “We made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.”

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QUANTUM

A Quantum Leap Forward

In The Office, Ryan Howard bets on Ohio’s future as the next Silicon Valley: “They call it the Silicon Prairie.” 

It looks like IBM’s been binge-watching in quarantine, too: The company just announced a 10-year partnership with the Cleveland Clinic, a nonprofit academic medical center, centered on AI, quantum, and cloud computing. 

Here’s the plan: Establish the “Discovery Accelerator,” a research engine using emerging tech to advance healthcare and life sciences. Think: discovering new molecules and expanding knowledge on viral pathogens, treatments, and more. 

That engine will be powered, in part, by a quantum computer. IBM plans to release the Q System One in 2023, and the Cleveland Clinic will be the first private-sector organization to buy and operate its own IBM quantum computer. (Right now, they can only be found in the company’s own labs and data centers.) 

• The computer will analyze vast amounts of data and power large-scale simulations that just aren’t possible without quantum computing. 

Big picture: Cleveland Clinic gets access to pioneering healthcare research tech, and IBM gets its first major quantum computer sale...and a whole lot of exposure in the healthcare sector. The latter likely tops IBM’s “pros” list after the disappointments of Watson, which made headlines for under-delivering in healthcare AI. 

BITS & BYTES

Stat: TSMC, the world’s largest contract chipmaker, will spend $100 billion over three years to expand capacity and meet demand. Capital expenditure go brrr. 

Quote: “Furthermore, given their maneuverability, speed, and stealth, drones are—like thermal imaging devices—capable of drastically exceeding the kind of human limitations that would have been expected by the Framers not just in degree, but in kind.”—Judges Kathleen Jansen and Amy Ronayne Krause, in a Michigan court decision focusing on drone flights and privacy.

Read: Wired offers a nice recap of five years of VR at Facebook. 

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WHAT ELSE IS BREWING

• Argo AI, the Ford/VW-backed self-driving startup, may IPO as soon as this year, Bloomberg reports. 
• John Krafcik stepped down as Waymo CEO. COO Tekedra Mawakana and CTO Dmitri Dolgov are replacing him as co-CEOs. 
• Cartken, a robotics startup, has partnered with ghost kitchen company REEF Technology to bring sidewalk food delivery bots to Miami. 
• Lilium → SPAC. The German air mobility startup also revealed its seven-seater electric aircraft.
• 76 companies nixed plans to list on Shanghai’s Star Market in March, the FT reports, “as regulators increase scrutiny of technology businesses.”
• Facebook VP Nick Clegg wrote a 5,000-word Medium essay unpacking and defending the social media company’s algorithmic systems. In related news, FB is developing a toggle for chronological newsfeeds.
• The ACLU does ad targeting, too. 

THREE THINGS WE'RE WATCHING

Today: Well, this one already happened. LG’s board met to decide its smartphone future. The company says it will shutter its mobile unit to focus on the buzzwords of our day: EV parts, connected devices, smart homes, robotics, and AI. 

Tuesday: Intel’s media event for its new Ice Lake server chips. “Intel is back,” Pat Gelsinger, its new CEO, recently declared. Also, Okta kicks off its three-day “Oktane21” virtual conference. 

It’s a slow week: Coinbase will hold a much-anticipated direct listing on the Nasdaq next Wednesday, using the $COIN ticker. 

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Bakkt and PayPal roll out new crypto features
• Reining in the AI megamodels
• Robo-delivery update