F5 is described as an application delivery vendor, but that term is nebulous to some folks and it doesn’t really convey all of the things that you do. You cover everything from application acceleration, wide-area network (WAN) optimisation, security, policy and more. Can you crystallize F5’s mission and what sets it apart from other infrastructure companies?
We see our products as occupying the strategic control points within data centers. We see all the traffic that’s going between applications and between servers. Because of these strategic control points, we can do simple things like, historically, load balancing or encrypting the traffic. But then it gets much more sophisticated where we can basically provision applications and servers, we can look at the performance of specific applications. Our customers can use our products to change or add functionality without having to change thousands of pieces of software and different programs. We’ve got this opportunity because of the way data centers have been architected and are being architected, which is this whole concept of consolidated data centers, typically using virtualization technology without a product sitting in a data center effectively controlling traffic between the apps and between the servers and between the network.
Talk about those control points. Did you identify them as an opportunity early on or is this a position in the infrastructure that you evolved to support?
We started off with load balancing then we added encryption. In 2004, we came out with full proxy architecture. The reason that’s important is that we can actually sit at the strategic control point and the application isn’t aware that we’re there, the user isn’t aware. That gets you a lot of power. Also, we can be very application fluent. We can understand what’s happening at a pretty granular level within the applications, whether it’s Microsoft SharePoint or Oracle apps. Over the last few years we’ve been building more application fluency into the product. Three years ago if you were using our products, you may have had to deal with a whitepaper that would say, ‘OK if you’re running SharePoint, this is what you do to improve the performance of SharePoint’. You read the whitepaper, you made some changes to our software. Now we have application templates for specific types of solutions, and we’ve got a significant number of those actually. These templates [are supported] within the operating system and you tweak the parameters to optimize [the applications], to make them more secure, to make them go faster.
I want to talk about how you compete against companies like Cisco. When you win, why do you win? And when you lose, why do you lose?
I’ll do the ‘lose’ first because it’s an easy one, it’s a very small proportion of the time we lose. We’ve actually been publishing our win rate against the competition. It’s typically in the low- to mid-90% win rate. Typically when we lose against Cisco it will be because of politics, to use the phrase used by our sales force. Cisco is a great company that’s got a lot of loyalty within the customer base, and some customers basically decide they want to do one-stop shopping. When we win is when customers are looking at functionality and performance. For example, I’ve talked about application templates. Nobody else has got that capability. I mentioned the example of SharePoint. We have the capability of increasing the performance of that by as much as 10 times. The short answer is that we win at a technology level. We have faster technology and much more feature-rich technology. I mentioned the full proxy architecture, there’s nobody that’s really got anything comparable to that in the marketplace. Also, we’ve got a tremendous service organization. Our customer [satisfaction] levels are world class. We poll our customers on a quarterly basis and we typically see scores of 9.2 to 9.6 out of 10. That’s very high. We’ve developed a world-class sales distribution channel as well as service channel as well as having the technology leadership.
So Cisco obviously is at a number of the same control points you are in the network. What is it that you can do that a Cisco can’t?
Well, in fact, they are not really at a number of control points. I mentioned earlier about being application fluent. To be application fluent, you really need this full proxy architecture and it needs to be sitting very close to the application. Cisco actually doesn’t have that technical approach. They focus more on load balancing and just effectively managing the traffic. They do Layer 7 [switching], which means that they can open up the packets and make strategic decisions based on that. But it’s very limited. Also a lot of their thrust is to sell the Layer 4-7 solution on the switch or on the router. From their perspective that’s pretty good because it means they can add value to that [device], but it’s not the right place in the network. You really need to be after the firewall, just before the application is ready to take the data so that you can encrypt the data, so that you can massage it. They don’t really have what we would call strategic control. Switches and routers can be defined as strategic control points, but not at the application-fluent level.
What’s changing in the competitive landscape today?
There’s not been a significant change over the last few years. If you go back three years ago, Cisco – in particular – was much more competitive against us. But we have gained significantly in market share. The best way, in my opinion, to look at the market is to look at the Gartner Magic Quadrant. That shows you all the competitors and the only sort of technology competitor we have is Citrix, from when they acquired the NetScaler solution. But we think from a feature point of view and from a performance point of view that we’ve really got them outclassed as well. We’ve enjoyed a situation over the last two or three years where we’ve had a big technology advantage and not much competition. Hence the 90+% win rate I was talking about.
