F5 Networks began in 1996 as F5 Labs1, when a young computer scientist and a venture capitalist bet on the chance that the Internet was going to change life as we knew it. Still in its infancy and known then as the World Wide Web, the Internet, they believed, would catch fire quickly, and when it did, web servers would rapidly become overwhelmed, causing traffic to slow to a crawl. Based on that assumption, they developed the company’s first product, the F5 BIG-IP controller, a load balancer that distributed Internet traffic across multiple servers. BIG-IP kept websites up and running when servers failed or were overloaded, accelerated traffic, and provided some basic security features.
The entrepreneurs’ gamble paid off; the introduction of BIG-IP in 1997 proved to be timely. In the late1990s, Internet popularity soared, and Internet start-up companies, known as dot.coms, became F5’s quintessential customers. As Internet traffic grew at unimaginable rates, so did F5’s business. Offering just two core BIG-IP products in 1998, F5’s revenue climbed to $4.8 million—more than 20 times that of the previous year.
In June 1999, the company went public, and F5 Labs became F5 Networks. The initial public offering was for 2.86 million shares of stock, offered at $10 per share. Earning the company more than $25 million, the IPO was considered a success. Within just six months, F5’s stock rocketed to $144 per share and annual revenue shot to $27.8 million—up nearly 580 percent from the previous year.
By 2000, about 80 percent of F5’s customers were Internet start-up companies, but the dot.com bubble of the 1990s was about to burst. With vastly overinflated value, many of these once burgeoning businesses failed between 1999 and 2001. During this period, much of F5’s customer base began to dissolve. Fortunately, the company had begun making headway with enterprise customers, whose product needs were very different from those of dot.com companies. Wanting to capture this market, F5 began expanding its product functionality, and the seed was planted for what would eventually become TMOS, F5’s unique traffic management operating system. In the short term, however, the company needed help shifting gears quickly to ensure its own survival.
That help came in 2000 in the form of a new president and CEO, John McAdam. Previously, McAdam had served as president and CEO of Sequent Computer Systems until the company was sold to IBM in 1999, at which point McAdam became IBM’s general manager of the Web server sales business. McAdam understood the marketplace and brought a fresh perspective to F5. He helped further the efforts F5 had already made to broaden its product appeal, addressing the needs of large enterprise customers. At the same time, he overhauled F5’s business model, shifting it from a direct sales to a partner/distributor sales model. By successfully establishing partnerships with distributors and industry giants like Dell and Nokia—and eventually with the likes of HP, IBM, Microsoft, Oracle, and SAP—F5 had taken its first targeted step toward making Fortune 1000 companies an integral part of its customer base.
F5 Establishes its Unique Value in the Market
In 2004, having rewritten its core BIG-IP system from the ground up, F5 introduced its game changing technology: TMOS. This “full-proxy” traffic management operating system would eventually become the unified architectural platform for all BIG-IP products. TMOS gave BIG-IP devices—which sat between clients and servers in the data center—the intelligence to inspect and modify packets traveling through them. It also gave BIG-IP the ability to optimize individual connections—client to BIG-IP and BIG-IP to server—across which packets traveled. Together, these unique characteristics put BIG-IP in a perfect position to provide vital services well beyond simple network load balancing.
Through world-class product engineering, sincere consideration of customers’ requirements, and key acquisitions, F5 successfully expanded BIG-IP into a family of products that integrates multiple functions—firewall capabilities (edge, network, and application layer); secure remote access services; WAN optimization; and Web acceleration technologies—on a single, unified platform. Until F5, the ability to deliver all these capabilities on one platform or device was unprecedented in the networking market. Organizations that wanted these functions had to purchase separate, non-integrated solutions from multiple vendors.
Industry Recognition Distinguishes F5 as a Leader
Just seven years after becoming a publicly traded company, F5 had made a name for itself as a pioneer of Application Delivery Networking (ADN)—a computing approach and set of technologies that ensure network-based applications are always secure, fast, and available. By mid-2005, as measured by industry analyst firm Gartner, F5 had captured the highest share of the overall application delivery controller (ADC) market, eclipsing industry giant Cisco Systems. This leadership position—which F5 has retained since 2005—helped the company weather the economic downturn of 2008 that crushed many of its competitors.
By 2011, F5 had logged eight consecutive years of steady growth in size and revenue. The company experienced its largest financial gain in fiscal 2005 when revenue was up 64 percent from the previous year. F5 also achieved significant milestones in 2007, when revenue exceeded $500 million, and again in 2011, when the company earned more than $1 billion dollars in revenue.
F5 Plays a Key Role in Business and Culture
Although F5 might not be a household name among consumers, countless global enterprises and service providers rely on F5 technology to ensure the secure and fast delivery of their web-based applications. Whenever their customers book airline tickets, trade stocks, pay bills, shop online, or send text messages, there’s a good chance F5 is working behind the scenes to ensure a safe and positive user experience.
Today, with offices in 35 countries, F5 remains on an aggressive growth path as it continues to develop innovative technologies. Growth markets for the company include security, carrier service providers, as well as various vertical industries such as financial services, healthcare, and government. Across industries, F5 maintains its solid reputation for developing innovative, high-quality products and for consistently achieving outstanding customer service ratings.
As F5 strives to keep pace with the most rapid growth in its fifteen year history, it is committed to preserving its unique corporate culture. CEO McAdam attributes the company’s continued success to F5’s highly skilled employees, who are passionate about technology and committed to excellence. In turn, the company rewards employees by promoting a strong work/life balance and providing exceptional benefits. Since 2005, F5 has earned more than 20 awards for being one of the best companies to work for—testament to employee job satisfaction and an average tenure among the executive team of nearly 10 years.
F5 Corporate History at a Glance
||F5 Labs is founded.|
||F5 introduces its first product, the BIG-IP load balancer. Revenue is $229K.|
||F5 revenue leaps to $4.8 million.|
||F5 Labs becomes F5 Networks and goes public, trading on the NASDAQ exchange.
F5’s revenue leaps to $27 million.
F5 operations extend to Europe and Asia Pacific.
||John McAdam is named president and CEO of F5 Networks.|
||F5 introduces iControl open APIs.
F5 worldwide headcount exceeds 500.
||F5 acquires uRoam and its FirePass (SSL VPN) technology.
F5 launches its online user community, DevCentral.
||F5 acquires MagniFire Websystems, supplier of web application firewall technology.
F5 introduces its powerful scripting language, iRules.
||F5 achieves #1 overall ADC market share as measured by industry analyst firm Gartner.
F5 acquires Swan Labs and its WAN optimization technology.
F5 worldwide headcount exceeds 1,000.
||F5’s quarterly revenue exceeds $100 million.|
||F5 revenue reaches more than half a billion dollars ($525.7M).
F5 acquires Acopia Networks for its intelligent file virtualization and storage tiering technology, later introduced as F5 ARX Series products.
||F5 introduces its high-performance, chassis-based VIPRION system.|
||F5 named one of the top 100 performing stocks in the S&P 500 Index.
F5 worldwide headcount exceeds 2,000.
||F5 achieves annual revenue of $1 billion.|
||F5 acquires Traffix Systems for its Diameter protocol switching technology, critical to the next generation of service provider networks.|
||F5 worldwide headcount exceeds 3,000.|
||F5 acquires LineRate Systems for its industry-leading software-defined networking services.|
1 The company name was inspired by the 1996 movie, Twister, in which reference was made to the fastest and most powerful tornado on the Fujita Scale: F5.