Nginx NGINX’s Plan to Create a $1 Billion Business

eva2000 · Aug 25, 2016

Interesting article about Nginx's plans to become a $1 billion dollar business

NGINX Inc. has a set an ambitious goal for itself: To become a $1 billion company within the next eight to 10 years. It will not be an easy task, especially given that its biggest competitor may be its own well-engineered open source software. For NGINX, the key to success will be to successfully get customers from additional markets.

The open source NGINX project, which began in 2002, is a widely-used high-performance web server and reverse proxy. However, the commercial company,NGINX Inc., created to support the open source project, was founded much later, in 2011, with the first commercial product in 2013.

Many early adopters and other users of the open source version of NGINX have the skills and engineering resources to rely solely on the open source version, so commercially, NGINX Inc. is facing an uphill battle in monetizing this user base.

In order to survive over the long term, it’s critical that the company expands beyond its historical user base and into new markets to customers who need additional features along with support and services to implement and maintain the software and customers who will pay for commercial products and services.

NGINX is used by many of the top websites in the world, and its market is continuing to grow. According to Netcraft’s July 2016 report, NGINX is used by almost 28 percent of the top million websites. As of August 11, 2016, W3Tech’s survey put this number at almost 36 percent of the top million websites and almost 53 percent of the top 10,000 websites. Both of these surveys have limitations, but they show a trend of NGINX growing relative to the competition that aligns with what we’ve been seeing in the market.
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From a feature standpoint, Robertson tells us “anything that extends NGINX into the traditional application delivery platform space, such as load balancing, media streaming, caching, monitoring, application health checks, etc. goes into the commercial product.”

The NGINX Plus Release 10, announced Tuesday, arrives with a new Web Application Firewall along with some other security enhancements, support for IP Transparency and Direct Server Return (DSR) load balancing, and other features. These premium features, along with support and services, are what they need to be able to monetize.

About 90 percent of the company’s revenue comes from their commercial product, NGINX Plus, which is sold as a subscription service with 24×7 support, and the remaining 10 percent of their revenue comes from professional services.
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buik · Aug 25, 2016

eva2000 said: ↑

About 90 percent of the company’s revenue comes from their commercial product, NGINX Plus.

To become a $1 billion company within the next eight to 10 years.
It will not be an easy task, especially given that its
biggest competitor may be its own well-engineered open source software.

For NGINX, the key to success will be to ......
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cut in the number of new options and features at the open source version so over time, you have no choice other than switching to plus.

eva2000 · Aug 26, 2016

bassie said: ↑

cut in the number of new options and features at the open source version so over time, you have no choice other than switching to plus.
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We shall see, but yes nginx plus features may not all filter down to open source nginx version which is expected as there is no such thing as a free lunch - even with open source software. There's always a cost whether it's monetary in nature or time/effort in deploying your own workaround solutions for missing open source nginx features i.e. WAF - web application firewall alternatives like naxsi, modsecurity or deploying 3rd party WAFs from cloudflare or incapsula or sucuri cloudproxy etc

buik · Aug 26, 2016

eva2000 said: ↑

which is expected as there is no such thing as a free lunch - even with open source software.
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Can't agree sorry. There was no commercial Nginx company behind Nginx from start till mid 2011. in those almost 10 years they also needed to eat, isn't it? Open source project gets popular and after a time the founder want to cash. Noting to do with open or open source. Thats it. What else? Ive seen it before with for example CyanogenMod/Cyanogen.

eva2000 · Aug 26, 2016

Have you see any business operating that doesn't want more $$$ than they have now and are satisfied with what they have in the bank right now ? Not even non-profits would knock back having more than they have in the bank now

eva2000 · Aug 26, 2016

bassie said: ↑

There was no commercial Nginx company behind Nginx from start till mid 2011.
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That's because they lived on sponsorships or private work/feature requests paid by companies wanting specific features etc. It was an informal way - Nginx Inc is just formalising that and growing based on that demand. Well that's how I read it.

buik · Aug 26, 2016

eva2000 said: ↑

Have you see any business operating that doesn't want more $$$ than they have now and are satisfied with what they have in the bank right now ? Not even non-profits would knock back having more than they have in the bank now
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Sure a company is founded to gain money but without open source Nginx there was no Nginx company.
The Russian Nginx founder has no interest in its constituency, as a result of which Nginx has become so great.
He only does want a lot of American dollars .

eva2000 · Aug 26, 2016

bassie said: ↑

Sure a company is founded to gain money but without open source Nginx there was no Nginx company.
The Russian Nginx founder has no interest in its constituency, as a result of which Nginx has become so great.
He only does want a lot of American dollars .
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Yes but nginx open source development by Nginx folks is now ensured due to Nginx Plus and Nginx Inc's financial viability. I believe it's also why you are seeing Nginx open source growing in popularity after 2011 due to also big businesses and other smaller Nginx users having more confidence in Nginx open source + Nginx Plus long term stability and viability financially.

Also once you start a company and receive funding from 3rd party investors, the very nature of the company is for-profit and a return on investment to investors. No way around that objective

Look at w3tech's nginx market usage share over 2010-2016, the 1st big jump of 4.2% was from 2011-2012 and then 4% came 1yr after Nginx Inc was formed from 2012-2013 and just kept going since then Historical yearly trends in the usage of web servers, August 2016

buik · Aug 26, 2016

eva2000 said: ↑

Nginx Inc is just formalising that and growing based on that demand. Well that's how I read it.
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Those features could be open sourced as well. Its a choice.
About Nginx's BSD license.

I'm not a guru into BSD licenses.
But isn't it like GPL that you should reveal each new commit/addition to the source?
So you could make your own ideal Nginx with additions from plus.

eva2000 · Aug 26, 2016

Unfortunately understanding open source licensing isn't my thing

BSD licenses - Wikipedia, the free encyclopedia

BSD licenses are a family of permissive free software licenses, imposing minimal restrictions on the redistribution of covered software. This is in contrast to copyleft licenses, which have reciprocity share-alikerequirements.
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Commercial license compatibility[edit]
The FreeBSD project argues on the advantages of BSD-style licenses for companies and commercial use-cases due to their license compatibility with proprietary licenses and general flexibility. The BSD-style licenses place only "minimal restrictions on future behavior" and aren't "legal time-bombs", unlike copyleft licenses.[12] The BSD License allows proprietary use and allows the software released under the license to be incorporated into proprietary products. Works based on the material may be released under a proprietary license as closed source software, allowing usual commercial usages under.

FOSS compatibility[edit]
The 3-clause BSD license has, like most permissive licenses, an excellent license compatibility and is compatible with almost all FOSS licenses (and as well proprietary licenses).[13][14]

Two variants of the license, the New BSD License/Modified BSD License (3-clause),[6] and the Simplified BSD License/FreeBSD License (2-clause)[8] have been verified as GPL-compatible free software licenses by the Free Software Foundation, and have been vetted as open source licenses by the Open Source Initiative.[3] The original, 4-clause BSD license has not been accepted as an open source license and, although the original is considered to be a free software license by the FSF, the FSF does not consider it to be compatible with the GPL due to the advertising clause.[2]
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buik · Aug 26, 2016

Thanks @eva2000
The BSD license is very short.
Cleverly done by Nginx to use this kind of license.
Nginx has no obligation to provide sources other then the source already released in the past.

Furthermore. The source Nginx released could be used by anyone.
The only thing you need to do is write there name,
copyright notice and disclaimer in the source.

Oxide · Aug 26, 2016

waf? anything that helps with layer-7 ddos is a "TAKE MY CASH ALREADY" deal.

hope it will be easy to upgrade to nginx plus.. eh @eva? on centmin

deltahf · Aug 26, 2016

Although I hope the Nginx that meets my needs will remain free, I wish them the best of luck.

The most successful open-source projects that have the greatest impact are those whose creators were able to develop into successful businesses, which are then incentivized to make significant investments back into its evolution (RHEL & CentOS, Firefox, WordPress, Android, etc.).

Oxide · Aug 26, 2016

wait what, their pricing.. minimum $1900/year.. hell no!

eva2000 · Aug 26, 2016

Oxide said: ↑

waf? anything that helps with layer-7 ddos is a "TAKE MY CASH ALREADY" deal.

hope it will be easy to upgrade to nginx plus.. eh @eva? on centmin
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Oxide said: ↑

wait what, their pricing.. minimum $1900/year.. hell no!
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yes and per server too hehe

deltahf said: ↑

Although I hope the Nginx that meets my needs will remain free, I wish them the best of luck.

The most successful open-source projects that have the greatest impact are those whose creators were able to develop into successful businesses, which are then incentivized to make significant investments back into its evolution (RHEL & CentOS, Firefox, WordPress, Android, etc.).
Click to expand...

true, wordpress is the best example !

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