Microsoft CEO Satya Nadella gives his keynote address at the company's Build conference in San Francisco on April 2, 2014. REUTERS/Robert Galbraith Last week, Microsoft "disinvited" Okta, a hot cloud startup, from being a sponsor at its upcoming Ignite tech conference, Okta CEO Todd McKinnon tells Business Insider.

Microsoft did this even though Okta has been a sponsor of the conference for years.

However, since we first reported on this story, Microsoft changed its mind and asked Okta to come back and be a sponsor again.

Okta's main product helps companies manage employee passwords for a bunch of different cloud services, and it also helps them manage mobile devices. Microsoft has recently introduced similar products.

In the dis-invite email viewed by Business Insider, Microsoft said that the event's leadership team refused Okta's sponsorship and removed it as an exhibitor "due to broad competition between our companies in the mobility solution space."

The weird thing is, Microsoft hasn't banned all of its competitors from this show. For instance, Cisco is a major sponsor and it heavily competes with Skype, as well as Yammer and other Microsoft products.

Being kicked out of a Microsoft conference "is rarefied air. Amazon, Google, and Okta are the only ones not allowed," McKinnon says.

A threat to Nadella's strategy

Ignite will be held from September 26 to 30 in Atlanta. It's Microsoft's biggest annual customer and partner conference concerning its cloud products.

Microsoft alerted Okta that it was banned from participating last week.

Okta may be receiving special treatment because it competes with newer products introduced under Microsoft CEO Satya Nadella that are key to the company's cloud-first/mobile-first strategy.

Microsoft Azure Active Directory. Microsoft Okta offers a cloud service that manages a company's employee passwords, and related security needs, for using other cloud services. For instance, companies use it to let their employees log in to Office 365, Salesforce, Adobe Creative Cloud, and 4,000 other cloud services. Okta recently began offering a service that tracks and secures a company's mobile devices, such as phones, tablets, and laptops.

These are challengers to Microsoft products like Azure Active Directory (AD) and its even newer Enterprise Mobility Suite (EMS).

Nadella frequently talks about these products when he explains his cloud strategy, and sessions on these products are already being advertised to Ignite attendees.

The deal is using Office 365 encourages companies to buy Azure AD, which encourages customers to buy EMS, and so on, Nadella told Wall Street analysts in January.

The reverse is also true. When a company doesn't use Azure AD and chooses Okta instead, it might choose more non-Microsoft cloud services.

"That's what worries them," McKinnon believes.

On the other hand, it still irks him that Okta was asked not to come to Microsoft's conference because Okta isn't just a competitor — it's an Office 365 customer, and has been a big public supporter of it.

"We love Office 365," McKinnon tells us. "We've worked very hard to make our product work with Office 365. Thousands of our customers successfully deploy with Okta and Office 365. It's very important that we work very well with Microsoft products. So we sponsor shows, come to events, and are vocal about Office 365."

Fighting like it's 1999

The whole thing smacks of the years when Microsoft was at war with the world, not the warm-and-open perception that Nadella is working hard to cultivate.

Okta CEO Todd McKinnon. Okta McKinnon is not convinced that this ban has come from the top. Microsoft's Office 365 team is still working closely with Okta's product team. Okta was just up in Seattle meeting with them earlier this month, he says.

"If you look inside the company, you see a bunch of people who understand the new way of openness and collaboration. Then there's a few people in the company still fighting yesterday’s war, stuck in the 2000s and 1990s trying to fight everyone."

Okta tells Business Insider that it's talking with Microsoft about possibly returning as a sponsor to the show, now that Microsoft has changed its mind and issued a new invitation. But Okta hasn't fully decided if it will agree. (We predict they will come to an agreement and Okta will be a sponsor again.)

But the final irksome thing: while McKinnon is confident that Microsoft will reimburse the fees Okta already paid for the sponsorship should he decide to bag the idea, the email kicking him out made no mention of his refund.