A few years ago it found itself at one such juncture. The company had successfully navigated the shift from physical appliance to virtual, and from data center to cloud.
But it also saw the shift to cloud native on the horizon and it knew it had to be there to survive and thrive long term. Over the years, we have become an application delivery and security company. Today the company has over 18, customers centered in enterprise verticals like financial services, healthcare, government, technology and telecom.
So part of the goal for these three acquisitions was to bring a level of automation to this whole process of managing modern applications. As part of this shift, the company saw customers increasingly using microservices architecture in their applications.
This means instead of delivering a large monolithic application, developers were delivering them in smaller pieces inside containers, making it easier to manage, deploy and update.
By the time Hussey completed F5's IPO, the pundits who had claimed that the Internet would become a revolutionary economic force had been proven correct. The dot. F5's performance on Wall Street reflected the frenzied optimism of the day, increasing in value at a phenomenal rate.
The new year promised to bring even greater financial gains, but for those who hailed the dawn of the new economy and dismissed the old economy, the beginning of the 21st century delivered a stinging rebuttal.
F5's main problem as it entered the new decade was keeping up with the escalating demand for its products. The company had more than 1, customers, serving the companies who were propelling the fantastic growth of the dot. As progressed, however, signs of weakness began to show, their cause tied to the beginning of the spectacular collapse of the dot. At first, the severity of what was to come was masked by encouraging results. The dramatic decline in F5's stock value soon was joined by lackluster revenue performance, as the technology sector, battered as a whole on Wall Street, began to stagger toward collapse.
At the beginning of , F5 was struggling to serve its customers, who turned to F5 for help with their own problems of growth. As the months passed, a more profound problem surfaced, one that threatened to destroy Hussey's burgeoning business. F5 was reliant on the types of companies who were suffering the most, deriving 80 percent of its revenue from dot.
Before F5's problems became readily apparent, Hussey turned to a new executive to help his company keep pace with the increasing demand of its products.
In July , John McAdam was hired as president and chief executive officer, an appointment profoundly important to F5's future. A former general manager of the Web server sales business at IBM, McAdam immediately realized his biggest challenge was not to expand F5 to meet growing demand but to contend with the crucible presented by the collapse of the dot.
Exacerbating the company's situation, its biggest competitors increased their commitment to dominating F5's market niche. In a January 5, interview with Puget Sound Business Journal, an industry analyst offered his assessment of F5's situation at the end of They can survive as a supplier of content management solutions for the lower to mid-end market, but if they really want to continue their growth, they will have to partner with someone.
They need to seriously consider their options. In the wake of the tumultuous events of , McAdam took action, becoming F5's savior. Faced with announcing a 40 percent decline in revenues and a loss instead of a profit for the first quarter of , he sought to repair F5's reputation on Wall Street.
He reduced F5's staff by 15 percent in January , subleased office space in the company's newly built headquarters, and, most important, streamlined F5's product line to make it more appealing to large companies. McAdam knew that he needed to divorce the company's attachment to the Internet start-ups that were in their death throes and instead court large, bricks-and-mortar companies.
He brokered distribution partnerships with Nokia Corp. The same analyst who painted a bleak picture of F5's prospects at the end of , offered a different assessment at the end of In a December 14, interview with Puget Sound Business Journal, the analyst said, "It's a definite turnaround for this company. You have to give credit to McAdam and his team. F5 went from being 80 percent reliant on dot. By the beginning of , the devastation caused by the collapse of the dot.
Cisco, aided by a strong distribution channel and relationships with many clients, held sway, controlling a commanding 47 percent share of the traffic management market.
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