F5 Networks: Internet Quality of Service
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I use Yahoo! frequently throughout the day. But on Monday, nothing seemed to work. I actually thought it was a problem with my Internet Service Provider (ISP).
Of course, being the premier Net company, Yahoo! was the first of many major sites to get hit by hackers "denial of service" attacks. The fact is, the Net is extremely vulnerable. It was originally a platform for the academic community; now it is used for consumers to buy goods and companies to manager their operations.
The financials are impressive. Revenues surged to $19.2 million last quarter from $2.7 million in the same period a year ago. The company is profitable, showing an 18 cent per share (or $4.2 million) gain, which beat First Call's 12 cent estimate. In the same period a year ago, the company suffered losses of $2.2 million.
About 53,000 servers are being connected to the Net every month. This is increasing the complexities of network management and, of course, making it essential for products like those from F5.
F5's technology uses so-called load balancing. That is, when data packets hit a site, F5 software will determine which server can best handle the traffic. It's kind of like a traffic cop.
The company has a diverse customer base. In all, there are 1,175 customers. The customers are big names, such as MCI WorldCom, RealNetworks and eToys.
Critical to the company's success will be to quickly expand its product line to its large customer base. So far, the company has done very well. There are now four products. Although, its flagship product, BIG/ip, represents 70 percent of revenues.
Yes, there are tough competitors and F5 can stumble. But, with its surging customer base and continued innovation, F5 has so far made the right moves.