DevCentral, F5 Networks‘ (NASDAQ:FFIV) online community, has over 65,000 members and brings users and developers together to solve problems and share ideas. It provides a real-time forum for F5 to better understand the challenges its customers face and helps the company prioritize and develop new features and functionality based on customer needs. By supporting F5 products, DevCentral has become one of the biggest competitive differentiators for the company, and its recent collaboration with industry leader Bluelock to migrate the community to a cloud environment has taken its competitiveness a notch higher. Blulock provides mid-size and large enterprises flexible IT infrastructure solutions with the help of its virtual data centers hosted in the public cloud.
F5 has seen a 6% increase in application delivery network market share in the past four years, and we expect it to continue seeing y-o-y growth till the end of our forecast period. The division contributes above 60% to our price estimate of $128 for the company, and thus a substantial part of its valuation rides on F5′s future growth in this segment.
Application delivery network solutions is a fast-growing segment in the enterprise networking market. The need for enterprises to invest less in building and owning new datacenters and optimize the existing facilities has led to demand for application delivery products which deliver the same. Additionally, the shift to cloud-based applications and storage has also driven the demand for application delivery products.
F5 Strengthens Its Global Community
DevCentral is F5 Network’s online community where thousands of customers can discuss, learn, listen and interact with other members about networking, development and business solutions. It allows IT departments to leverage the power of the community to help accelerate and customize data center operations and application support. Running all its cloud-enabled ADN solutions in Bluelock virtual data centers will enable F5′s customers to leverage its technology faster to a broader set of applications and minimize risks.
Bluelock’s advanced cloud designs along with F5 Network’s leading ADN capablities will provide the DevCentral community with various benefits such as reduced complexity, cost-effective operational consistency, clear visibility across infrastructure, platforms & applications and simplified lifecycle migration leading to more frequent upgrades. This enhances the overall value of the DevCentral community and could lead to larger deal sizes in the future by helping its customers achieve agility and scalability in the cloud.
To address the security and performance risks associated with migrating to the cloud, DevCentral has adopted a comprehensive security strategy that utilizes F5′s BIG-IP data center firewall services and security solutions.
F5 Cloud Licensing Program
The company also announced its new global cloud licensing program developed for Infrastructure-as-a-service (Iaas) cloud providers that offers benefits not only for the providers but customers and channel partners as well. The program provides a unified architecture for both private and public clouds with virtual additions of award winning BIG-IP platform. F5 offers its advanced ADN solutions in a utility-billing model, giving IaaS cloud providers the ability to better manage their cash flows.
Our price estimate of $128 is at a premium of over 20% to the current market price.