How would you grade yourself on integrating acquisitions over time? And I'm sure everyone's a bit different, but I get the sense that you've brought some different business lines in over the years that have really pivoted the business in totally different ways, which is not easy. So it seems from the outside it's been successful.
There've been some acquisitions that have been more successful than others, of course. They have definitely significantly contributed to changing who we are at F5 and what we can offer our customers, the markets we play in, and really truly building F5 into a platform company. So I am pretty proud of what the teams have done overall.
B plus.
Hi, and welcome to GeekWire. I'm GeekWire co-founder Todd Bishop.
And I'm GeekWire co-founder John Cook.
We are coming to you on location this week at the F5 Tower in downtown Seattle, and I'm pleased to welcome our guest, François Locoh-Donou, who is F5's chairman, president, and CEO. It's great to have you here, François.
Thank you, Todd. Thanks for having me.
François, we are here in part because it's F5's 30th anniversary, and it's really one of the most remarkable business and technology stories of the past three decades in Seattle. And you might not hear about it as much as some of the other big tech companies. F5 helps keep the world's apps running and secure, and it's really reinvented itself again and again from the early web to the cloud to AI, and you're still standing 30 years later. So that's part of what we want to talk to you about today. We also want to talk about the new era of AI and where F5 is headed. And also, we want to talk a little bit about the World Cup.
We could do the whole podcast on the World Cup if you wanted to. You know, my interests would be there.
And also, at the end, we do have a GeekWire trivia challenge, which is a tradition on the show, and I have a good question about F5's history. We'll see if we can stump you and John.
All right. So this is great. So people listening right now have almost certainly used F5 today — F5's technology today — like literally in the last 24 hours without knowing it, even if they don't know your name. Can you walk us through that? Like, where is F5 actually showing up in people's day as a way of getting to know the company?
Well, you know, F5 is really focused on keeping all the applications that we all use secure, keeping them always available, keeping them always performing. And so any day today, any day that you use your favorite mobile banking application to make a payment or check your balance, anytime that you use your favorite coffee application or you book a ticket on an airline or you book a concert in one of the digital concert booking applications or you use social media — anytime you do this, you're very, very likely using F5 technology or F5 technology is behind that application, protecting your login, protecting your interaction, and making sure that you can enjoy the benefits of the digital world, get a good digital experience, but don't suffer from the dangers of it. And making sure that that digital experience is actually the one you expect. It's fast, it's performing, it responds to you, and you don't have to wait very long.
And I know this is changing a lot with the advent of AI, but I actually just found out recently that F5 did not start out in this realm. And now, of course, F5, many people think it started out as a load balancing company. Well, no, this isn't the trivia. The trivia question's even better. But F5, many people think that it started in 1996 in Seattle as a load balancing company. So traffic was hitting internet servers, maybe the Drudge Report back in the day was getting hammered with lots of traffic, and I'm sure F5 servers were making sure it was being served up to the audience. But no, in fact, it did not start that way. John, did you know this?
I did not, and I was actually there at the founding of F5 and covered them very early on. Just starting my new journalism career, and it was one of the earlier companies that was coming up. So very early on. So I don't even know this history. I would just assume that that's how it started.
I got this from your blog post about the long-time chairman, Al Higginson. So François, what did F5 actually start out as?
F5 was started by students at the University of Washington in the early days of the internet, and they wanted to build video games online.
Okay, I did not know this.
Yeah, like 3D VR video games back in the day.
Which was a great idea at the start of the internet.
Relatively quickly, they ran into a problem, which was that their game was not working the way they wanted to because it was hosted on multiple servers, and if you sent a request to a server that was busy, you would get a lot of wait time, which doesn't work for a real-time experience of an online video game. And so they had to solve this problem, and in solving this problem, they invented a technology called load balancing between servers. And then as they went on, they had friends in the Seattle area who were also building dot coms, and all of their friends had the same problem. So they realized as they went on that the technology they had invented, the load balancing technology, was actually maybe more valuable than the original ideas of video game. And so the company made a pivot into load balancing, and then became known as a load balancing company in the late '90s, really serving initially websites, dot coms, and then in the early 2000s, the company made a pivot to the enterprise because the dot coms went away, and enterprises in the early 2000s were starting to deploy web-facing applications, and so they were starting to have the same issue. We have many more users that want to access our applications. They need to be hosted on multiple servers. And so we're going to have the issue of having to load balance between these servers if we want this application to be performing, to be always available, etc. And the F5 that you know today was created as a result of this pivot.
It's interesting. It reminds me a little bit of the story of Slack because that started out — I believe it was Stewart Butterfield's — it was gaming as well. A video game company, and they realized, wait, this little app that we created to chat amongst ourselves is actually the better product.
It's actually not uncommon for startups and technology companies to make a pretty substantial pivot in the early days. It's a tough decision, but a lot of the successful companies we look at today had to make big pivots in their history. And in the case of F5, it was video games to load balancing, which is not an obvious one, but it paid off in big ways.
So let's talk about the pivots that you've made during your tenure because when you joined F5, it was not the company that it is today. You've made a lot of acquisitions including one just announced this week that we want to talk about. Can you give us a sense for the evolution of F5 during your tenure as CEO?
Yes, but I will start with what hasn't changed. What hasn't changed is number one, the heart of what we do is making all these applications and APIs that are proliferating in all our companies, making them safe, making them secure, making them always available, and making them always performing. Where all these applications live and how they behave and where the traffic — all of that's changing and I'll come to that. But at the heart, what we do and what we're focused on hasn't changed. The other thing that hasn't changed is this quest we have always had to make that easier for our customers. The people inside of large enterprises whose job it is to make all the applications we use available and safe and secure — that job is very difficult, and it has grown really way more complex over the last 15 years than it was before. And so we have been on this quest to make their jobs easier. And every acquisition we make, every development we make, is in pursuit of that same quest, and that quest hasn't changed. And then, of course, the third thing that hasn't changed is the culture of the company. I really credit Al Higginson, our chairman, who was on the board of F5 for 30 years, just retired recently. And then John McAdam, the CEO that preceded me, building an extraordinary culture. And I've been at F5 for 9 years, and I've really looked to nurture and enhance this culture, but it is a culture where people feel valued, feel respected. We call it a human-first culture at F5, a human-first and high-performance culture. That way of approaching how we work together, of coming to work to help each other thrive, is core to who we believe we are at F5, and that hasn't changed.
Now, for the things that have changed — when I joined F5, we were still primarily a single-product hardware company. At the time, though, we realized that customers were really starting to build applications in public clouds, they were all moving applications to public cloud, and we knew that they were going to be increasingly in not just one public cloud, but multiple public clouds. And so we made a bet at the time that said, 'Well, our customers will not end up in a single cloud, but they will end up in hybrid multi-cloud environments.' Because they will probably always want to have applications on premise, but they will want to use the best environment for each application. And so they'll make their choice, and they'll want the flexibility to do that. But the complexity that comes from that flexibility will be a challenge for them, and we're going to be the company that solves that. And so we made this transition to say we're not going to be just a single-product hardware company. We're going to be a platform company that can serve our customers anywhere they have their applications. And to be able to do that, we're going to have hardware, we're going to have software, and we're going to have software as a service, giving complete choice to our customers. We're going to have all the commercial models they want, perpetual license, subscriptions, consumption model. So we are going to absorb the complexity of having all these models in-house to create simplicity and make things easier for our customers.
And that's what we did in the first 8 years of my tenure at F5, we placed a lot of focus on that. And today, we are that. We are a platform company. We are essentially the leader in hybrid multi-cloud delivery and security of all applications and APIs, and our customers rely on us for that. And now, in the last couple of years, we have entered a new era, which is the AI era. I'm sure we're going to talk about that. But things are evolving again. As AI traffic is exploding, customers are now developing more or integrating AI applications, using AI models, deploying AI agents. All of that's creating new needs in terms of securing and delivering traffic. But our quest remains the same — making all these things secure, making them available and performing all the time.
Let's talk about the latest example. You just announced an acquisition this week, Shape Path AI, and it struck me that it was a really vital piece of technology because it sort of sits on the network, and it detects the AI signals. It figures out when the traffic going over a particular piece of hardware or network cable is an AI chatbot or agent. Why is that important, and what does that bring for you?
Well, it is exactly that, Todd. And the reason it's important is if you step back, we're all very excited about AI and the potential that AI applications — the way it's already changing our lives and we're just in the very early innings of how it's changing our lives. So we're excited about where AI is going to take us. That said, AI is a vulnerable technology today. Models have a lot of vulnerabilities. They can be abused in so many ways. And we have a mission for our customers to build a better digital world, meaning help people use AI, but also make it safe. And what we see today is maybe the biggest challenge in AI adoption in enterprises is that the more an enterprise adopts AI, the less it has visibility on what AI is crawling in the organization. Because the more an enterprise adopts AI, it deploys more agents. These agents call on tools. It deploys more models. These models are calling on agents. These models are integrating with applications. These models have to rely on data. They're fetching data in different places. And understanding which employee is using what AI, what agent is using what tool is quite complicated. And so what we wanted to do is help first of all our customers discover what AI is in use in their organization. And Shape Path AI does that. They have really built a strong solution for discovery of AI in an organization — what AI, whether it's agents or models, what's in use.
But what we're doing goes beyond that, because what I shared with you the complexity our customers are dealing with before — what our customers don't want to have is, 'Oh, I have a tool for discovery. But once I've discovered these models that exist in my organization, I then need to go and test the vulnerabilities that exist in this model. Well, then I'm going to have to go to a separate tool for that. And then once I've discovered these vulnerabilities, well, I need to build remediation for these vulnerabilities. Well, then I go to a separate tool for that.' Having four, five, six different tools to discover, test, and secure your AI is a nightmare. And so what we're doing, and we announced that this week as well, is we are building an AI security platform that includes all of these capabilities — discovery of AI models or agents, the governance and visibility around them, testing of these AI models, and the guardrails to protect these models. So that's what we're building.
But it seems like this acquisition that you made this week was key because if you can't see it, you can't secure it, and that leads to all the other things you were doing. And it's one of a number of acquisitions you've made over the years.
Yeah, I wanted to ask about that acquisition path that you've been on and kind of what's ahead for acquisitions. And I guess but first off, what makes a good acquisition for F5?
Well, that's a great question. Not every acquisition is the same in terms of shape and size. What makes a great acquisition for F5 — I think there are multiple attributes. But first is typically a technology that we don't believe we can build ourselves in the time frame that we need to build it. And I think Shape Security AI is a good example of that. We couldn't build what they've built with the speed that is required to both be competitive and deliver to our customers what they need. So that's an important attribute — a belief and conviction around the technology of the company we're acquiring. The second attribute is of course a meeting of the minds on the quests for our customers. What do customers need? What mission are we trying to solve together? And how does an asset that is outside of F5 — when that asset comes into F5, how does it become more valuable to the ecosystem and our customers? Answering that question honestly and truthfully is really important for us in the process. And then, of course, the third, but perhaps the most important attribute is the team that is coming. And so we do spend an extraordinary amount of time ensuring that the team coming into F5 is going to fit in the culture, is going to feel that they can do their best work here, is going to be additive to what we're doing already. Those are probably three of the most significant attributes of a good acquisition at F5.
So you have that human-first culture that you talked about. How do you make sure that those teams get integrated as you continue to grow and that they live by the same values that you are here?
We spend a lot of time and energy on that. I will tell you first — the first aspect of that is before we actually make an acquisition, the time that we spend with those teams, we get to know and learn whether it would fit or not. We have encountered companies in the industry that had great technology and brilliant people, but it was very clear to us that they would never be a great fit with F5, and so we walked away only on the grounds of this is not going to work from a cultural perspective. Then, the integration when folks come into F5, we really want to make sure that they have clarity before coming in on what the mission is going to be inside of F5, and that they are in a place in the organization where that mission is going to have the appropriate amount of visibility from the senior levels of the organization. That's an important path to success in combining two organizations together. And it's important to me that I feel that the mission of that organization is actually important to F5. Because if it's just a nice-to-have for F5, the amount of energy that we're going to put in it is not going to be what is necessary to make an acquisition successful. And so ensuring that the mission of the organization is important to all of F5 is another criterion that we use to ensure the integration goes well.
How would you grade yourself on integrating acquisitions over time?
You know, acquisitions are — it's difficult to talk. Somebody was asking me the other day. I was saying, have you ever heard a parent say, 'I have a favorite child and I have a not-favorite child?' Look, I think overall, there've been some acquisitions that have been more successful than others, of course. What's more important to me is that with every passing year, this muscle about identifying potential targets, making acquisitions, creating value from these acquisitions and successful integrations, that this muscle continues to strengthen at F5 because we have learned from the mistakes of the prior ones and we don't repeat the same mistakes. And so we get better and better and better at it. And I would say that over the course of the last 9 years, we have definitely gotten way better at understanding all of the pitfalls of acquisitions, avoiding some of them, and being more consistent in the way we integrate acquisitions. And in aggregate, if you look at all of them combined, yes, they have definitely significantly contributed to changing who we are at F5 and what we can offer our customers, the markets we play in, and really truly building F5 into a platform company. So I am pretty proud of what the teams have done overall.
B plus.
That's the perfect answer because it's up high on the scale, yet room for improvement. That's the perfect answer.
Hey, let's take a break. I want to talk a little bit more about AI later, but when we come back, I want to talk more about the World Cup and what it means for Seattle, what it means for you, François, and some of your roots. So let's do that when we come back. You're listening to GeekWire.
Welcome back. It's Todd Bishop and John Cook. We are on location this week at the F5 Tower in downtown Seattle. We are here with the CEO of F5, François Locoh-Donou, who has been leading this company for many years. You have such a fascinating background. You grew up in Togo, and then you ended up in France. Tell us a little bit more about that, and specifically though, we want to know this given the moment that we're in right now — who are you rooting for in the World Cup right now?
Yes, I did grow up in Togo. I was in Togo until my teenage years. I was born of a Togolese father and a French mother, and I moved to France with my mom in my teenage years, and I finished high school there, and did my university studies in France. Before ultimately moving to the US when I joined the technology industry. And so Togo is not in the World Cup this year, unfortunately. So I am rooting for France as my number one team, and I think we have an unbelievable team, and I think we'll go far in the tournament. I am hoping we will go very far and maybe win it. But I am also, of course, I have very strong affinity with a number of African countries, and Ghana is probably top on that list, because Togo and Ghana used to be the same country. So I count them as my team. And so France would probably be my first team. Ghana would be my second team and other countries from sub-Saharan Africa, Senegal, Ivory Coast, are also. So you can see I support a lot of teams. And of course, I am now an American citizen and have been for several years. And so I also support the USA, and I think the USA this year has a chance to go far in this tournament. I saw the USA play in Seattle last week. They were phenomenal. And the combination of the team in place and the fact that we're playing the tournament here in the US, I will make a bold prediction and say I think the USA will get to the quarterfinals for the first time in American history. I don't know beyond that, but I'd love to see that.
It's shaping up pretty well bracket-wise. So I believe in that prediction now. I'm right there with you.
So it's not quite an AI prediction. It's a human prediction, this one.
That's good. But I'd love to see that.
So with all those allegiances, I'll have you do your draft of Mbappé, who's a French striker, Semenyo, who's a great Ghanaian player, and then Christian Pulisic from the US. Who would you pick if you were drafting?
Oh my God, that's easy, actually. I would pick Mbappé. First of all, I think he is today the best player in the world. And it's not because he's French-African, by the way. It's not only because of that. I think he's the best player in the world in terms of skill, speed, and goals scored. He's extraordinarily gifted. Semenyo I would not pick because he's Ghanaian, but he plays for Manchester City, which is a rival.
Oh yeah, you can't — I'm an Arsenal fan.
Which is Arsenal. So Semenyo is out. And then Pulisic, no, I like him, but he's not quite in the class of Mbappé.
Yes, I agree with that ranking. You had a great question that you came up with for François, and I say this in part because I wanted to steer this away from being just the World Cup nerd-out session, because we could talk for hours on this. Yeah, the bonus. I know you're both a fan and a former player and love the game, obviously. So let's bring this back to leadership and we're talking about culture. So if you were to describe your management style, are you more of an attacker, midfielder, defender, or goalie? Your management leadership style. Where would you put yourself?
It's funny you ask me this because I — by the way, I still play.
