F5 Networks, the leading provider of application delivery network appliances, is a great success story. It has seen steady growth over the last decade. In the last three years, revenue and net income has increased year-over-year. As of September 30, 2013, it recorded $1.4B in annual revenue and $277M in net income. F5 was one of the pioneers in web server load balancing and DNS load balancing, both done at hardware level.
The Big-IP Local Traffic Manager and Big-IP Global Traffic Manager are its signature products. F5 has avoided the problems that have plagued its rival Riverbed. It’s amazing that F5 continues to grow it’s hardware appliance sales in the day and age of the cloud, and open source software. Free open source load balancing software, that also happens to be caching software, has weakened its hold on that niche. CDNs, have also taken on some of the functionality of its ADN products, like redirects, rewrites, SSL acceleration, and TCP/IP optimizations.
In addition, DNS service providers like DynDNS, Akamai and Limelight, offer DNS load balancing services for very low cost, compared to expensive hardware. However, F5 identified this trend early, and diversified itself by adding security products to its portfolio. F5 can be a case study of how a technology company can evolve, and succeed in the rapidly changing technology landscape.
It’s going to be interesting to see how they respond to the growth of the cloud. Sooner, or later, it’s going to impact its business. I’m sure they see the writing on the wall. Does F5 has plans to offer a cloud security service in the future? Time will tell.