F5 Networks is continuing to move away from systems hardware and toward software as the company positions itself for future growth.
The company reported its third quarter fiscal 2019 financial results on July 24, with revenue reported at $564.4 million for a four percent year-over-year growth rater. Leading the way is F5 Networks software business which grew by 91 percent. In contrast, the hardware systems business was down by 11 percent.
"We continue to aggressively execute our strategy of transitioning F5 to a software-driven model," Francois Locoh-Donou - President and CEO said during his company's earnings call. "From our efforts to reprioritize our development resources to the introduction of new, flexible consumption models, and most recently, the acquisition and integration of NGINX, customers are seeing a new F5."
Locoh-Donou emphasized that it is no longer accurate to view F5 through the narrow lens of a traditional Application Delivery Controller (ADC) player. F5 Networks is perhaps best known for its ADC technologies including the BIG-IP and Viprion platforms. Both of those platforms have expanded to provide more than just application load balancing to more expansive security and management offerings.
The big opportunity that F5 Networks is chasing is the multi-cloud application services opportunity. Locoh-Donou said the decline in systems sales comes in part from actions the company has taken to make it easier for customers to consume F5 as software.
Additionally, he noted that organizations are better able to operationalize and manage a virtualized infrastructure environment and as a result a number of them are implementing software first policies.
F5 announced its intention to acquire Nginx Inc in March in a deal valued at $670 million. Nginx's software is also used for application delivery and since the deal closed in May, the combined teams have been moving to converge Nginx’s controller and F5’s cloud-native application services platform.
"We expect the first release of a converged F5 NGINX offering within the next six months," Locoh-Donou said. "We expect the converged F5 NGINX controller will be an accelerator for our NGINX business, expanding, both the addressable market and potential deal size by spanning a broader set of used cases across DevOps and Super-NetOps customer personas."
He added that going forward, applications will be increasingly disaggregated into smaller components, containerized and distributed across multi-cloud environment, which is the direction that F5 is headed as well.
"We are confident that F5 and NGINX with our combined solutions and application expertise bring significant advantages to these cloud-native and containerized environment," Locoh-Donou said.
Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.