F5 Networks announced on March 11 that it is acquiring privately held Nginx in a deal valued at $670 million.
Nginx is the lead commercial sponsor of the open-source Nginx web server and application delivery platform, which is one of the most widely used technologies on the internet today, powering 22 percent of all active web sites, according to the January 2019 Netcraft Web Server Survey. F5 Networks is well-known for its own Big-IP Application Delivery Controller (ADC) technologies, which will now benefit from the addition of complementary capabilities from Nginx.
"F5 is transforming into a mutlicloud application services company, and with this acquisition we are significantly accelerating our transformation," Francois Locoh-Donou, CEO of F5, said during a call with financial analysts discussing the deal. "The combination of F5, the global leader in multicloud application services, with Nginx, the open-source leader in application delivery for modern applications, is powerful for a F5, but more importantly it is powerful for our customers."
Nginx got started in 2012 as a commercial entity providing support and extended enterprise offerings based on the open-source Nginx web server. The company's first commercial product, the Nginx Plus server, was released in August 2013 and has steadily been improved in the years since.
In 2017, Nginx announced its Application Platform as a broader set of capabilities to help manage diverse types of application workloads. In January 2019, Nginx added API gateway features to the platform, providing organizations with an integrated approach to define, publish and manage APIs on top of Nginx.
Why F5 Needs Nginx
In some respects, F5's technologies were headed in the same direction as Nginx and Locoh-Donou commented that there is some customer overlap. The focus of the two companies, however, has been different. He said Nginx has been broadly adopted in the DevOps community and has a strong open-source following as well.
"Previously, there was a chasm between developers and operations, between applications and infrastructure. The combination of F5 and Nginx bridges that divide for the first time," Locoh-Donou said.
Locoh-Donou added that both he and Nginx CEO Gus Robertson have a shared vision: to provide a link that enables network operations and developer operations to work seamlessly together. Locoh-Donou added that the F5 ADC technology is already a robust platform, but with Nginx new opportunities will become available. More specifically, he noted that the Nginx API gateway capabilities open up a new addressable market for F5.
"Web servers and app servers are also a multibillion-dollar market, and this opens up the opportunity for us," Locoh-Donou said. "In the virtual ADC space, we have actually built organically a lot of capability. They [Nginx] have capabilities that allow us to insert capabilities much closer to the application logic, and they have a phenomenal brand in the DevOps community that we were missing."
At the core of the Nginx product portfolio is a robust open-source project and community. F5 has pledged that it will continue to support Nginx's open-source efforts after the acquisition closes.
"They [Nginx] have a bunch of users that have a passion for, and a preference for, open-source, and there are some subset of those users mostly moving into enterprise-type solutions that are looking for enterprise-level capability," Kara Sprague, senior vice president and general manager of Application Services at F5 Networks, said.
Sprague said that Nginx's commercial users choose to move up from the open-source product to the paid offerings to get additional enterprise capabilities, including improved visibility and analytics.
"We remain committed to and are very excited about the open-source legacy of Nginx," Sprague said.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.