Massive open-source server nginx acquired by F5

Internet infrastructure might seem snooze-worthy, but it makes a ton of bank: nginx, which powers more than 40 percent of the internet, has been acquired by F5 networks, a company that makes 'cloud services' and pricey networking hardware.

Even if you don't know what nginx is, you're definitely touching it on a daily basis. Nginx is both a company and a popular open-source server that makes it easy to scale services on the web. 

The nginx server product can be configured as either an entire server for responding to requests or, most commonly, as a 'reverse proxy' for high-traffic websites, in which it dynamically distributes load between multiple different servers, such as Apache, to ensure responsive load times.

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This deal is huge because F5 is paying $670 million in cash to acquire the company, which fits into its portfolio fairly well, grabbing access to millions of installations that are happy, free users of its server today.

Why acquire a server product like this, particularly when it's open-source? Can you make money from free? Absolutely, and the obvious explainer for this is hidden in the size of the companies using nginx, as touted by the announcement post: Instagram, Pinterest, Netflix, Airbnb. 

The obvious play here is that when nginx becomes entrenched, and a company scales, F5 stands to be the first port of call for help with managing that increased load. F5 already has a portfolio of other related products, and embedding itself as the partner for scaling a cloud gives it a huge chunk of the pie. If you're Netflix, you're almost certainly paying hundreds of thousands of dollars to get the most efficient server setup, and to have someone there immediately if it breaks.

This is especially notable considering how huge Cloudflare has become, and that it has quickly become synonymous with 'needing scale.' If you're struggling to keep your servers online because of an attack or just sheer user growth, Cloudflare is the first thing that comes to mind. 

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I think F5 wants a piece of that mind-share, and plans to make a play for the same space. The sell of free is alluring for small startups, but as they scale, raise finance, and suddenly get revenue, they're willing to pay whatever it takes to keep things online. F5 (and nginx) now sit at the center of that.

What does this mean for the open source server, however? Given nginx powers so much of the open web, it's hard to not be skeptical that F5 won't stifle development over time and developers have responded with concerns. 

If F5 is smart, and I suspect they are, they'll maintain nginx's open-source project at or above the levels of today‚ÄĒwhich they've already noted that they are¬†committed to doing‚ÄĒgiven it's in their best interests for future monetization of those relying on it.


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