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F5-NGINX acquisition removes open source rival

F5 Networks plans to buy NGINX for $670 million. The F5-NGINX acquisition removes from the market a business founded on open source software used in 375 million websites.

F5 Networks, a maker of software to improve application performance, has agreed to acquire NGINX for $670 million, removing a competitor that had built a business on open source technology used in hundreds of millions of websites.

The F5-NGINX acquisition, announced Monday, is expected to close in the second quarter. F5 plans to continue selling NGINX software under the current brand.

NGINX's namesake product is a web server and application delivery controller that provides Layer 4 and Layer 7 load balancing and other services to bolster application performance. NGINX offers support for an open source version of its software, while also selling a commercial release, called NGINX Plus, which provides additional features.

NGINX competed with F5 as a technology provider for cloud environments. Corporate operations teams, for example, use the NGINX load balancer to improve the availability and scalability of Docker containers, experts said.

A year ago, F5, which has its roots in hardware, launched a multi-cloud version of its technology, called BIG-IP Cloud Edition. The product included a load balancer and security.

However, F5 also added support for NGINX in its BIG-IQ management console -- an acknowledgment that "certain customers recognize the indelible value of NGINX and other open source techs for certain situations," said Shamus McGillicuddy, an analyst at Enterprise Management Associates.

"The logical next step, if you've decided to cohabitate with NGINX in many customer environments, is to own NGINX," McGillicuddy said. "Now [F5] can own a larger share of the customer environment and add value through additional integrations between the platforms."

Combined F5 NGINX to support open source project

F5 said it would support NGINX's work within the open source community. "F5 is 100% committed to the continued innovation and increasing investment in the NGINX open source project, F5 CEO François Locoh-Donou said in a blog post.

NGINX co-founder Igor Sysoev developed the NGINX technology and released it to the open source community in 2004. More than 375 million websites use NGINX software today, according to F5.

Sysoev, NGINX co-founder Maxim Konovalov and CEO Gus Robertson will run the NGINX business under F5, Locoh-Donou said. Sysoev and Konovalov founded NGINX in 2011.

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