According to a MarketsandMarkets report, the Identity Access Management market is expected to grow 17% annually over the next five years. The industry is estimated to be worth $14.3 billion in 2017 and projected to grow to $31.75 billion by 2022. Austin-based SailPoint Technologies is counting on this growth as it prepares to go public.

SailPoint’s Offerings

SailPoint was founded in 2005 by Mark McClain and Kevin Cunningham who wanted to set up a company that would provide innovative solutions to business problems concerning identity access management. SailPoint Technologies develops identity governance software that integrates role management, access request management, and compliance management solutions to help organizations streamline IT compliance processes and reduce the risks of fraud.

SailPoint’s core products include IdentityIQ – an identity governance solution that provides insight and control over user access and streamlines complex processes; IdentityIQ Compliance Manager – a product that integrates access certification, policy enforcement, and activity monitoring capabilities and automates the auditing, reporting, and management activities; and IdentityIQ Role Manager – a platform that helps create, enforce, and verify role-based access in enterprise applications. SailPoint’s products have been well received and it has names like AXA, Allianz, Equifax, ING Direct, Virgin America and Yale, to name a few, as its customers.

SailPoint’s Financials

SailPoint is privately held with an undisclosed amount of funding raised from investors including Austin Ventures, Lightspeed Venture Partners, Origin Ventures, Silverton Partners, and Thoma Bravo. In 2014, Thoma Bravo had invested an undisclosed amount into SailPoint to buy a majority stake in the company at an undisclosed valuation. As part of the investment, Thoma Bravo bought out the its original investors.

Since the investment, SailPoint’s revenues have grown steadily. SailPoint does not disclose detailed financials, but recent reports reveal that the company’s revenue surpassed $100 million in 2015 and has been “highly profitable”. It claims that it is operating at EBITDA margins of 10%-15% and revenue growth of 30%-40% annually. 2016 revenues are estimated to have come in at $130 million. SailPoint is targeting to go public this year and has been beefing up its senior management to support the move. It added a new CIO Kevin Hansel and a new General Counsel Christopher Schmitt.

Okta’s Financials

Rival Okta (Nasdq: OKTA) went public earlier this year and raised $160 million at a valuation of $2 billion. Okta had reported previous fiscal revenues at $160 million and is yet to turn in profits. The stock tumbled initially post listing, but has since recovered and is currently trading at a market capitalization of $2.3 billion. SailPoint would feel reassured with Okta’s performance. Not only does the valuation increase spell an appetite for Identity Access Management stocks in the market, but it also proves that a profitable company like SailPoint may fare well post listing. At Okta’s revenue multiple of 14 times, SailPoint could be looking at a market valuation of at least $1.8 billion.

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Ping Identity’s Offerings

SailPoint is not the only one who has been watching Okta’s performance with much interest. Another IAM vendor, Ping Identity, is likely to be analyzing the market potential as well. Ping Identity has almost been a pioneer in the industry considering that it was founded back in 2002 when Identity Management wasn’t such a big thing. For the first few years of its existence, Ping Identity worked on the development of the first open source toolkit and libraries to implement the protocols of the Libery Alliance – an alliance led by Sun on standardizing identity. Soon thereafter, the business took off as organizations began to realize the need for secure access and proprietary identity.

The company did rather well in the coming years by adding more than 200 customers each year. By January 2016, it had more than 1,500 customers of which more than half were Fortune 100 clients. Last year, Ping was looking to go public, but given the depressed market conditions, valuation cut-backs and the presence of investors that wanted an exit, Ping was sold to Vista Equity Partners for an estimated $600 million. Prior to the sale, it was expected to be trending at annual revenue run rate of more than $100 million. Ping hasn’t revealed its financials since the sale to Vista. However, it is also waiting in the wings to go public and given Okta’s performance, this may well be the year it lists. And at the 14x revenue multiple, they’re also looking at a $1.4-$2B valuation.