Jan 18, 2021

Spotlight: Volterra, F5's $500mn multi cloud purchase

edge computing
Harry Menear
3 min
F5 Networks paid a cool half billion for Californian app security as a service startup Volterra earlier this month
F5 Networks paid a cool half billion for Californian app security as a service startup Volterra earlier this month...

Networking company F5 announced earlier this month that it had paid $500mn to purchase privately owned app security-as-a-service startup Volterra from its founders.

F5, which largely works behind the scenes to support apps like Netflix and Disney+, has been working over the past few years to shift its business model from hardware to software sales. Currently, about 35% of the company’s revenue stems from software, compared to just 10% in 2018. In a recent interview, François Locoh-Donou, F5’s CEO, said that the company’s board is looking to grow that number to 75% in coming years. 

Volterra is F5’s third major acquisition in as many years. The companies currently have more than 50% overlap between their customer bases. The deal is seeing F5 pay $400mn in cash, with an additional $60mn in deferred stock to the startup’s founders and employees. 

This week, we’re taking a look at Volterra, and exploring why F5 has calmly handed over almost half a billion dollars for a company that isn’t projected to have any positive impact on its balance sheet this year. 

“We’re not acquiring Volterra for what it’s going to do for us today, meaning what it’s going to do for revenue in the 2021 financial year,” Locoh-Donou said in an interview. “We are really acquiring Volterra because it transforms our competitive position.” 

If you can't beat them, buy them

Founded in 2017, Volterra is based in Santa Clara, California. The startup emerged from stealth mode in 2019 with a $50mn Series A funding round. Volterra - which is funded by Khosla Ventures, Mayfield and Microsoft M12 Ventures - focuses on edge computing and delivering multi-cloud security as a service for applications. 

In a recent blog post announcing the acquisition, Volterra CEO Ankur Singla noted that the COVID-19 crisis has dramatically accelerated the company’s pace of innovation, in addition to the demand from the market. 

“COVID-19 has dramatically changed the landscape — it has accelerated digitization of physical experiences and moved more of our day-to-day activities online,” he wrote. 

“This is causing massive spikes in global Internet traffic while creating new attack vectors that impact the security and availability of our increasing set of daily apps.” 

Volterra’s platform delivers app security as a service, helping its customers distribute their sensitive data and app hosting information across multiple cloud providers while also improving uptime through advanced edge security. 

Singla added that F5, with its capabilities combined with Volterra’ platform, will be able to better compete with its direct rivals, like Cloudflare and Fastly. In an interview, Locoh-Donou added that F5 initially tried to build its own version of Volterra’s service, before electing to buy the startup instead. 

The acquisition has been ratified by the board of both companies and is expected to close by the end of March 2021. 

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Apr 12, 2021

Target joins Open Compute Project to become platinum member

Sam Steers
2 min
Courtesy of Getty Images
U.S retailer Target will join the Open Compute Project as a platinum member, the first major U.S retailer to do so after seeing record growth last year...

U.S retail corporation Target will join the Open Compute Project (OCP) as a Platinum member following record growth for the company in 2020.

The announcement was made during an ICCON conference hosted by the U.S retailer last week, and the partnership aims to expand the development of edge computing use cases within the company. 

The retailer is the first major U.S retailer to become a platinum member, paving the way for others to join the partnership in the future. 

"We are very excited to join the OCP and partner with the community on new use cases for networking and edge computing," said Mike McNamara, Chief Information Officer of Target.

He added: "This type of open and increased collaboration will help us all create better technology that’s purpose-built for enterprise needs."

Target also has a distributed footprint, which McNamara says can influence new OCP use cases for networking and edge computing.

This news follows a rise in growth for the organisation in 2020, with customers shopping with the retailer and using their "same-day services."

The Open Compute Project claims that it allows Target to partner with industry leaders in cloud technology, as the majority of the retailer's success "is supported by underlying technology," says Target.

Bill Carter, CTO for the Open Compute Project Foundation, believes that joining the business is not a first for Target.

He said: “Working together and open sourcing is not new for Target. Many of the retailer’s engineers have already been involved in various OCP Projects and we’ve seen tremendous value from their participation.

"Today’s announcement further demonstrates Target’s long-term commitment to advance and contribute to the open source community for the benefit of all,” concluded Carter.

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