Ahead in the Cloud

The outlook for the expected recovery of the Puget Sound region's technology sector looks mostly cloudy-and that's just the way Seattle's F5 Networks Inc. wants it.

Cloud computing, the delivery of hosted services over the internet, is one of the hottest trends in the IT world. According to a March 2009 report from Gartner Inc., worldwide revenues for cloud services are expected to top $56 billion this year-a 21.3 percent increase from 2008-and should reach $150 billion by 2013.

By supplying a service called application delivery control (ADC), which manages traffic between servers, F5 Networks is reaping the rewards of the trend that is transforming expensive data centers into private or public clouds that provide just-in-time IT service. F5's virtual ADC service furnishes the infrastructure that allows for rapid cloud-to-cloud and cloud-to-user communication, whether a provider offers software as a service (SaaS) or infrastructure as a service (IaaS). 

"We make sure the access is always on, fast and secure," says Erik Giesa, vice president of product management and marketing at F5. "Clients only use the IT services they need at the time that they need them."

At a time when many tech firms are praying for just flat returns, F5 is showing profits again. For the fourth fiscal quarter of this year, F5 reported a profit of $28.4 million, representing a 44 percent surge over the same quarter last year. The company now has more than 1,600 employees, up nearly 50 percent in the past two years. Earlier this year, F5 was ranked as No. 12 in Forbes magazine's list of the top 25 technology stocks.

One customer is wireless carrier AT&T, which has faced heavy loads on its system because of the popularity of the iPhone, for example. AT&T uses F5 software to make more efficient use of its network. Other F5 software helps companies more efficiently allocate data storage so that less frequently used data are put on cheap storage devices while frequently accessed data are stored on more expensive, easily accessed devices.

F5's success has come largely under the radar because its products are meant to be largely invisible. As one customer aptly describes the firm's services, F5 provides the "non-sexy plumbing" of the cloud infrastructure. The company has grown in tough times because efficiencies offered by cloud computing can help reduce IT costs by a third or more, and time-to-market by one-half to

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