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Startup Behind Ubiquitous NGINX Web Server Ready To Embrace The Channel

Joseph Tsidulko
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NGINX has been powering advanced web applications for a decade and a half. But until this month, there hasn't been a way for partners to formalize the relationship by which they bring to market the web server.

In January, the San Francisco-based startup behind the ubiquitous technology launched its first channel program, recognizing its next phase of growth would come through partners, Rob Whiteley, NGINX's chief marketing officer, told CRN.

"We were always in and around the channel, but it wasn't a concerted effort of the company to invest heavily in that side of the equation," Whiteley told CRN.

That changed with the realization that in recent years, more mainstream businesses were seeing the value of deploying the enterprise version of NGINX's open-source technology to deliver their web applications at scale, Whiteley said.

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That potential base of commercial users typically looks to VARs and systems integrators to help them select and implement technology. Without a channel program, "we realized we're missing a big piece of the pie," he said.

Despite the open-source project's phenomenal market penetration—NGINX is now downloaded four times a second, powering some 400 million websites and counting—many people don’t know there even is a company behind the technology, Whiteley said.

Part of the reason is that for many years, there wasn't.

Igor Sysoev, a Russian engineer, first developed NGINX in 2004 after growing frustrated with existing solutions for handling high levels of web traffic.

By 2011, demands of maintaining the project became impossible to juggle with full-time employment as an administrator for a Russian internet company. Sysoev decided to launch his own startup.

The company's guiding strategy was to develop and integrate load balancers and all the other functionality that stands in front of its core open-source web server—a market dominated by Seattle-based F5 Networks—to make online applications faster, more secure and reliable. F5 dominates the load balancer market with more than 50 percent share, and offers other application delivery components like application acceleration, and access control and security.

Two years later, the startup began shipping NGINX Plus—the enterprise solution that still accounts for 95 percent of revenue.

During those early years, NGINX built out new use cases, and growth came from selling to very technologically savvy companies, the likes of Zendesk and Salesforce, that weren't buying through the channel.

But that dynamic changed as traditional enterprises increasingly focused on digital engagement, and found they needed to serve more-sophisticated web applications to customers and internal users.

To drive further growth, NGINX brought in Cassandra LaBouff to lead channel development efforts as director of product marketing and programs.

"We were seeing existing partners, some becoming more mature, wanting to transact with us in different ways to," she told CRN. "Some developed their own modules, but then thought maybe it would be easier if [they] could also resell the NGINX software."

But the challenge for her team was developing the right program, she said, "because of the amorphous nature of the partners we have."

There were few pure-play solution providers in that space, so NGINX studied the ways VARs and systems integrators were looking to engage with its open-source and commercial offerings.

The channel team constructed the program's benefits and requirements "based on routes to market that different types of partners are looking to execute with us," LaBouff said.

Most NGINX resellers have experience selling commercial products from enterprise open-source vendors. Red Hat's channel is one source of recruitment, especially given the integrations NGINX has with the open- source leader's technology.

Whiteley said the company was careful crafting a channel program, recognizing "that the channel itself is morphing."

Partners that once just recommended NGINX were increasingly interested in higher-touch engagements.

And "companies that used to be traditional resellers are beginning to offer managed services, or cloud services, or practices around how to take you to cloud," he said. "Systems integrators are becoming DevOps experts in addition to basic implementers."

Because NGINX usually gets applied for cutting-edge use cases, there's almost always a skills gap among potential customers, further driving demand for channel expertise.

That's the gap channel partners like Li9 Technology Solutions can close.

Armando Arias, founder and CTO of the Phoenix-based solution provider, said there's a large opportunity to take on F5—the current market leader.

Li9 has historically sold Hewlett Packard Enterprise and Dell EMC storage and servers to large data centers. About three years ago, the company branched into cloud, and after that, discovered NGINX as another data center disrupter it could bring to market. The company's executives soon learned some of their consultants were already familiar with the open-source solution, making it easier to develop a practice.

"It's a product poised for growth. It’s a great value proposition," he said. "That's not very hard to tell."

NGINX Plus allows partners "to create a turnkey solution, much like the F5 product, that can also include hardware and consulting services," Arias told CRN. "You have an audience on the development side, and, if you find the right infrastructure people, you have a good audience there that's prepared to listen to that value proposition."

The new program adds the clarity needed to enable a successful practice, he told CRN.

NGINX sales and support people, because of the new channel program, clearly understand they have partners like Li9 who have agreed to resell the products and are eager to work with them, Arias said.

The program "just adds another layer of structure and sets the right expectations on both sides of that," he said.

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