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March 12, 2019

Why NGINX’s $670 Million Acquisition Matters

"F5 is committed to keeping open source technology alive. Without this commitment, the deal wouldn’t have happened for either side"

By CBR Staff Writer

You may not have heard of NGINX (that’s “engine-X”, not “en-jinx”), the open source software company, but its importance arguably far outstrips its name-recognition: the NGINX web server, for example, is the world’s third most widely used, lagging on Apache and Microsoft.

Indeed NGINX’s software is used by 374 million websites and 66 percent of the world’s highest‑traffic sites.

Now the company has been bought by publicly listed rival, Seattle-based F5 Networks, for $670 (£512) million this week in a deal that has left F5 scrambling to assure customers it has full respect for NGINX’s “thriving open source community”; “one of the most attractive elements” of the deal.

Founder Igor Sysoev, told the company’s open source mailing list: “F5 is committed to our open source mission. There will be no changes to the name, projects, their licenses, development team, release cadence, or otherwise. In fact, F5 will increase investment to ensure NGINX open source projects become even stronger.”

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“Make no mistake about it: F5 is committed to keeping the NGINX brand and open source technology alive. Without this commitment, the deal wouldn’t have happened for either side”, CEO Gus Robertson said in a blog.

What Does NGINX Do?

NGINX is the latest open source software (OSS)-powered company to have a) found a way to monetise its offering through a paid-for premium service and b) found itself snapped up by a large rival; the customers of which it had specifically targeted.

(NGINX 24 months ago published a detailed blog offering guidance on how to replace replace legacy hardware from F5 with its own offering. Among its offerings, NGINX provides software-based alternatives to F5 Networks Application delivery controller (ADCs) hardware, which it describes as “massive, front‑door behemoths”.)

The company describes itself as solving two main issues as cloud‑native companies build web‑scale applications, by providing an entry and exit point for all traffic flowing in and out of applications, with behind it, a distributed architecture made up of many services that communicated with each other using NGINX as a proxy for API traffic over HTTP, using software open sourced by creator Igor Sysoev in 2002.

F5 Networks Committed to “Increasing Investment in the NGINX Open Source Project”

Robertson said: “We’re still helping customers build distributed application architectures. We’re still building a platform that optimizes ingress‑egress traffic and APIs. And we’re still helping companies on their journey to microservices.”

F5 CEO François Locoh-Donou pointed to NGINX’s “leading software application delivery and API management solutions, unparalleled credibility and brand recognition in the DevOps community, and massive open source user base.”

F5 will maintain the NGINX brand with current CEO, Gus Robertson, and founders, Igor Sysoev and Maxim Konovalov, joining F5.

Open source is a core part of F5’s multi-cloud strategy and a driver for F5’s next phase of innovation, the two reiterated: “As such, F5 is committed to continued innovation and increasing investment in the NGINX open source project to empower NGINX’s widespread user communities. F5 expects the combination with NGINX will accelerate its product integrations with leading open source projects and will enhance its strong technology partnerships with open source vendors.”

See also: F5 Labs – Lessons Learned from a Decade of Data Breaches

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