Okta Workforce Identity costs $6 per user per month for the Single Sign-On starter and $17 for the Identity Engine bundle, while Microsoft Entra ID is functionally free in any Microsoft 365 estate (Entra ID Free is bundled) and lists at $6 for P1 and $9 for P2 standalone. For a 5,000-user enterprise already on Microsoft 365 E3, the realised TCO over three years is approximately $0 incremental for Entra ID P1 (bundled into E5) versus $1.7M list for equivalent Okta capabilities, before any Okta negotiation. The decision is rarely about feature parity. It is about Microsoft 365 entitlement, identity strategy maturity, and the cost of an identity vendor switch.
Headline pricing for 2026
Both vendors publish list pricing. The comparison only makes sense once Microsoft 365 entitlement is layered on top, because Entra ID is partially or fully bundled in most enterprise Microsoft 365 SKUs.
| Capability | Okta Workforce Identity | Microsoft Entra ID |
|---|---|---|
| Single Sign-On (SSO) | $2 per user per month | Free (Entra ID Free, bundled with M365) |
| SSO plus MFA | $6 per user per month (Adaptive MFA) | P1 at $6 or bundled in M365 E3 (limited) and E5 |
| Lifecycle management | $4 per user per month | Included in P1 |
| Identity Governance | $9 per user per month | $7 per user per month (Entra ID Governance) plus P1 or P2 |
| Privileged Access | $15 per user per month (Privileged Access) | $7 per user per month (Privileged Identity Management, part of P2) |
| Workflows | Included in higher tiers | Workflows in P1 and P2 |
| Identity Engine (full bundle) | $17 per user per month | P2 at $9 standalone, bundled in M365 E5 |
| External / B2B users | $0.0042 per active user per month | $0.00325 per MAU above 50K free |
| Identity Threat Protection (ITP) | $4 per user per month add-on | Included in P2 |
The Microsoft entitlement complexity matters: Entra ID Free is bundled in any commercial Microsoft 365 subscription. Entra ID P1 is bundled in M365 E3, E5, F3, F5, and Business Premium. Entra ID P2 is bundled in M365 E5 and F5 only. So an organisation on M365 E5 has P2 entitlement at zero incremental cost. An organisation on M365 E3 has P1 entitlement bundled but pays $3 per user per month to upgrade to P2 (or buys Entra ID Governance for $7 to cover the governance use case without full P2).
TCO modelling for a 5,000-user enterprise
Three scenarios:
Scenario A: M365 E3 estate, basic identity needs
| Approach | Annual cost | Notes |
|---|---|---|
| Stay on Entra ID P1 (bundled in E3) | $0 incremental | SSO, MFA, basic conditional access |
| Add Entra ID Governance | $420,000 (5K × $7 × 12) | Access reviews, lifecycle, certifications |
| Switch to Okta SSO + MFA | $360,000 (5K × $6 × 12) | Replaces Entra functionality with paid alternative |
| Okta Identity Engine | $1,020,000 (5K × $17 × 12) | Full Okta workforce identity stack |
Scenario B: M365 E5 estate, comprehensive identity needs
| Approach | Annual cost | Notes |
|---|---|---|
| Entra ID P2 (bundled in E5) | $0 incremental | Full Entra ID feature set including PIM, ITP, access reviews |
| Okta Identity Engine (replaces Entra entirely) | $1,020,000 | Plus migration cost |
| Hybrid Okta + Entra (federation) | $540,000 (Okta partial) | Less common; usually transitional |
Scenario C: Google Workspace estate (no Microsoft 365)
| Approach | Annual cost | Notes |
|---|---|---|
| Entra ID P1 standalone | $360,000 (5K × $6 × 12) | Possible but unusual without M365 |
| Okta SSO + MFA | $360,000 | Native fit with Google Workspace |
| Okta Identity Engine | $1,020,000 | Comprehensive identity |
| Google Cloud Identity Premium | $216,000 (5K × $6 × 12) | Bundled with Workspace Plus |
The Microsoft 365 estate is the single largest determinant of identity TCO. Customers on M365 E5 face a near-zero incremental cost for industry-leading identity; switching to Okta is rarely justified on cost alone.
Feature comparison
The capability gap between Okta and Entra ID has narrowed substantially in 2024 to 2026. Both deliver SSO, MFA, lifecycle management, governance, and privileged access at comparable depth. The differentiation:
| Capability area | Okta strength | Entra ID strength |
|---|---|---|
| Application catalogue (SAML / OIDC) | 7,000+ pre-built integrations | 4,500+ pre-built integrations |
| Conditional Access | Risk-based Adaptive MFA | Conditional Access with Entra ID Identity Protection |
| Lifecycle automation | Native, very mature | Mature in P1, governance in P2 or Governance add-on |
| Workflows / automation | Okta Workflows (visual builder) | Entra ID Lifecycle Workflows, Logic Apps |
| Identity Governance | Okta Identity Governance (newer, less mature) | Entra ID Governance (mature in M365 E5 estate) |
| Native Microsoft 365 integration | Good but external | Native, deepest in industry |
| Identity Threat Protection | Add-on (Okta Identity Threat Protection) | Bundled in P2 |
| Customer Identity (CIAM) | Auth0 (separate Okta product) | Microsoft Entra External ID |
| Verifiable credentials | Okta Verifiable Credentials (limited) | Entra Verified ID |
Okta wins on application catalogue breadth and on workflow maturity. Entra ID wins on Microsoft 365 integration depth, identity protection bundled value, and price for any organisation with M365 E5 entitlement.
The October 2023 Okta support breach context: Okta's October 2023 support system breach created lasting enterprise scepticism. Many enterprises that committed to Okta in 2020 to 2022 are now in renewal conversations with explicit security-incident-driven pricing pressure. Customers who hold the renewal open past Okta's fiscal year-end (31 January) typically realise an additional 8 to 12 percentage points of discount as Okta competes to retain the account.
Migration TCO
Switching identity providers is one of the most disruptive enterprise IT projects. Typical 5,000-user migration cost:
| Migration direction | Typical cost | Timeline |
|---|---|---|
| Okta to Entra ID | $400,000 to $900,000 | 9 to 18 months |
| Entra ID to Okta | $500,000 to $1,200,000 | 9 to 18 months |
| Either to PingFederate or ForgeRock | $700,000 to $1,800,000 | 12 to 24 months |
The cost components: application re-integration (every SAML and OIDC app needs re-configuration), lifecycle workflow rebuild, MFA enrolment re-run for every user, federation rewiring, identity governance re-implementation, and parallel-run period. For organisations whose primary identity provider has been Okta since 2017 to 2019, migration to Entra ID is non-trivial and rarely justified on price alone.
Okta negotiation framework
Okta pricing is more negotiable than Entra ID because Okta is a pure-play identity vendor in a competitive market. The discount levers:
- Multi-year term: 8 to 15 percent additional discount on three-year commits.
- Multi-product bundle (Workforce + Customer Identity): 10 to 18 percent additional discount.
- Competitive pressure: Active POC against Entra ID or Ping consistently surfaces 12 to 25 percent additional discount.
- Fiscal year-end timing: Okta's fiscal year ends 31 January. Deals signed in the final two weeks consistently land at 8 to 15 percentage points additional discount.
- Auth0 ramp commitment: Customers committing to Auth0 (B2C identity) for a future deployment alongside Workforce Identity release cross-product discounts.
Entra ID negotiation framework
Entra ID is functionally bundled into Microsoft 365. The negotiation is therefore part of the Microsoft EA negotiation. The relevant levers:
- M365 E5 upgrade math: Upgrading from E3 to E5 unlocks P2, Defender for Identity, and significant security functionality. The realised incremental cost of E5 versus E3 is approximately $30 per user per month, which often nets to negative cost after Defender for Identity and Identity Protection replace existing standalone tools.
- Standalone Entra ID purchase: Buying P1 or P2 standalone (rather than bundled in M365) is rarely cost-effective except in non-Microsoft-365 environments.
- Entra ID Governance add-on: $7 per user per month standalone or bundled in select security SKUs.
- External Identities (CIAM): MAU-based pricing. First 50,000 MAU free. Above that, $0.00325 per MAU. Significantly cheaper than Auth0 for high-volume consumer identity.
Decision framework
The buyer-side decision tree:
| Estate profile | Recommended identity choice |
|---|---|
| M365 E5 estate, mature identity needs | Entra ID P2 (bundled). Save $1M+ per 5K users vs Okta |
| M365 E3 estate, basic SSO/MFA needs | Entra ID P1 (bundled). Add Governance only if needed |
| M365 E3 estate, mature governance needs | Entra ID P1 + Entra ID Governance OR Okta Identity Engine; model both |
| Google Workspace estate | Okta SSO + MFA, or Google Cloud Identity Premium |
| Multi-cloud estate, no Microsoft 365 | Okta Identity Engine |
| Existing mature Okta deployment | Keep Okta, negotiate aggressively at renewal |
| Existing Entra ID deployment | Stay on Entra ID, evaluate Governance and P2 upgrade |
| Customer Identity (B2C) at high volume | Entra External ID or Auth0; price by MAU pattern |
The fastest path to verified savings on either platform is a paid identity cost review. Independent reviews routinely identify 20 to 35 percent of identity cost as shelfware, mis-tiered seats, or unnecessary add-ons.
The three-year trajectory
Microsoft's investment pace on Entra ID has outstripped Okta's investment pace on Workforce Identity in 2024 to 2026. The capability gap that justified premium Okta pricing in 2018 has largely closed. The strategic question for Okta customers in 2026 is not "is Okta still better" but "is the Okta lock-in cost worth the marginal feature advantage."
For new identity deployments, the default is Entra ID for any Microsoft 365 estate. The exception cases (Google Workspace estates, regulated industries with specific Okta certifications, pre-existing federation patterns) remain real but narrow. Okta's strategic future depends on Workflows, Auth0, and Identity Governance differentiating from Entra ID by enough margin to justify the price gap. That gap is closing.
For deeper analysis see Entra ID pricing decision guide, Entra ID licensing, M365 E3 vs E5 vs F3, Microsoft EA complete guide, cybersecurity licensing, and the Microsoft vendor hub. For engagement, see our software licensing advisory service or SaaS license optimization.