Stepping into the shoes of someone who had a tremendous amount of success isn't easy. Sometimes the shadow created from the incumbent is so big that it's almost impossible to live up to expectations. Consider the flop that was Van Halen when Sammy Hagar took over from David Lee Roth. Or every Dolphins, Bills, or Jets QB since Marino, Kelly, and Namath.
However, once in a while the person taking over is as good or better than the incumbent. A good example of this is when Manny Ramirez took over playing left field for the Boston Red Sox. The previous few left fielders included the likes of Mike Greenwell and Jim Rice, who were great in their own right, but Manny took it to another level.
This week, F5 Networks, the de facto standard in the application delivery controller market, announced that it had found a replacement for outgoing CEO John McAdam. The company will be promoting its own Manny Rivelo to follow in the footsteps of McAdam. Rivelo is currently F5's EVP of strategic solutions and has been at the company since 2011. Rivelo is a well-seasoned industry professional with a resume that includes a 19-year career at former enemy (now BFF), Cisco.
While I believe the choice of Rivelo to be the new CEO of F5 is a good one, McAdam does leave some big shoes to fill, as his tenure as CEO will be regarded as one of the best in tech history. McAdam took over the company just shy of the tech bubble collapse in 2000. Just a few months after taking the reins of the company, F5 stock went from trading in the 70s to plummeting to just $3 per share. At the time, F5's very existence was called into question.
During McAdam's tenure there has been a constant drumbeat of skeptics waiting for Cisco to drive the company out of business, or another large vendor through an acquisition, such as when Citrix bought Netscaler or Juniper purchased Redline. Through the years, F5 not only fought off the larger competitors, it thrived.
Over the past 15 years, F5's biggest strength was its ability to expand its own addressable market. When McAdam joined F5, ADCs, or "load balancers" as they were called then, were used primarily for web traffic. Today, ADCs are a core part of application deployments, such as Exchange, SharePoint, Oracle, and Cisco's ACI. Every time there was skepticism regarding F5's ability to grow, it seemed the company found a new way to become relevant to more enterprise initiatives. The continued total addressable market (TAM) expansion has been something that F5 has done better than any other networking company during the McAdam tenure.
Today, F5 stands on the precipice of having two new markets become significant revenue drivers. The first is security. F5 has had security products for almost 10 years (since the acquisition of Magnifier), but the company has never been considered a true security vendor. Rather, it was a network vendor that happened to have a little bit of security relevancy. Over the past two years, the security business has exploded at F5 and it has been the biggest driver of revenue for the company. Given how hot security is today, it's fair to say that F5 is just scratching the surface of what's possible in security.
The second market that F5 is knocking on the door of is telco. Again, F5 has had some success in the telco market, but very few would consider F5 to be a strategic telco provider. It's my belief, though, that the company will continue to gain share in the telecom market with its GI firewall.
This is where Rivelo will become important. As talented as McAdam is, he doesn't have the technical chops of Manny. Rivelo's technical background and knowledge of security and carriers will be key in continuing the momentum in both those markets where much of the selling is done to hard-core technologists.
I'd like to bid John McAdam a fond farewell as he steps away from his role as CEO and welcome Manny Rivelo to the position. I'm looking forward to watching F5 continue to find new ways of expanding its TAM in the carrier and security segments of this industry.