"Curiosity is the very basis of education and if you tell me that curiosity killed the cat, I say only the cat died nobly." - Arnold Edinborough

Yesterday Nginx Inc announced that it had taken $3 million USD in funding. No one deserves this more than Igor Sysoev and it’s hard to believe that Nginx wasn’t commercialized sooner. Well deserved or not, though, whether this funding is good for Nginx or not is up for debate.

To understand the whole aspect of the deal I’ll first cover the worst-case scenario that people might fear happening. I’ll later on cover why this case is unlikely, so please do finish reading before considering me a moron.

The FUD Aspect

Getting funded means a business person has seen potential and decided to invest money to get a return. There’s really no way to deny this, philanthropy simply does not happen in the start-up world unless you’re being funded by your rich but slightly senile aunt. Eventually this business man will want to get a return on his investment and this means the Nginx Inc will have to become profitable. How does an open source project become profitable, though?

  • Going closed source and commercializing the product.
  • Creating a closed source enterprise version to develop alongside open source version.
  • Keeping the core product open and developing commercial extensions of that product.
  • Keeping product open sourced and selling support, training and resources.


There might be a few more options that I haven’t thought of, but these are the most commonly seen ones. Based on the press release and statements made to the press we know that Nginx Inc plans to release a commercial version of Nginx for paying customers. To quote Andrew Alexeev:

“we think that it’s the most valuable approach for open source projects to be open core, in order to provide the commercial features that are really needed”

So that leaves us with an open core and most likely commercial modules for enterprise customers. Modules, perhaps such as high availability, proper load balancing or actual backend monitoring. Things normal people obviously do not need.

I’ll be the first to admit that the slippery slope argument is not a proper argument, it cannot be used as evidence of Nginx going in the wrong direction. Nevertheless, it is still a fun thought-experiment. For Nginx Inc to be profitable it’s in their interest to get as many people as possible on their paid plans, as such it is in their interest to keep the functionality in the free version limited to just enough that they can keep attracting new users.

They might promise to not want to upsell users, however, we all know how much a promise is worth when it comes to making money. If the commercial modules fail then commercial version is introduced, then the free version is scraped and eventually you’ve got a new Oracle on your hands. Business people are running Nginx Inc now and the death of Nginx as open source might be coming.

The Rational Aspect

The above is, of course, pure FUD. There’s no evidence that actually points to such a scenario happening and it is merely the worst case scenario I could think up. So what do we know? What are the actual facts about this move.

  • Nginx Inc is getting new offices in San Francisco.
  • Nginx Inc will release a commercial arm based on the open source Nginx core. Whether a full version or just modules is not known.

We can infer another fact based on this – namely that Nginx Inc will hire new people. Before Nginx Inc formed as a company back in July it was largely a one man project. If you followed the development it was Igor writing code with a few rare patches from third party. Mostly other developers were told to develop modules.

Today Nginx has 3 full-time developers working on the code instead of just Igor working after-hours, this alone is a win for everyone who uses Nginx. I think it’s safe to say that development on the Nginx core should increase even if they only dedicate a single person to working on it.

Having a resourceful company behind Nginx is also a plus as it allows enterprise customers to be confident in using Nginx to power their infrastructure. They’ll be able to get support and know that the product isn’t a fly-by-night operation. More companies using Nginx means an increased need for people familiar with Nginx and that might increase the value of people with Nginx as a skill set.

The Rational Worst-Case Scenario

Lets assume for a second that the FUD aspect holds true and Nginx becomes a close source project, or even that the open source version is crippled to where it’s just a bare bones httpd which even lighttpd outshines.

Nginx Inc actually has very little control over the entire infrastructure that is Nginx, in fact, the only two things controlled by Nginx Inc are the Nginx domain(and product) and the mailing list. For the longest time Nginx support has been handled by Igor on the mailing list and the community everywhere else. The IRC channel, which these days has 300+ people idling, is controlled by community volunteers, the Nginx wiki is controlled by the same community volunteers and the Nginx forum is controlled by Jim Ohlstein who has no connection to the Nginx company.

All this means that should the worst case scenario happen with Nginx Inc blinking and suddenly having dollar signs appear in their eyes, then the community can pull an OpenSSH and fork Nginx due to it using the BSD 2-clause license. If the community so desires the documentation and support structure can follow along.

Of course, it’s important to note that this scenario is far-fetched and that forking software is a last-measure. I don’t see it happening.

My Personal Thoughts

I’m personally not too concerned at this point. Nginx has a long history of being open source and while it’s going open-core now I still feel confident that the core will not be neglected or crippled in favour of making money. On the other hand, I don’t know how much ownership Igor had to give up, nor do I know how strong of a leader/owner he’s going to be. At this point I’m positive about the funding, extra developers means good things and until I see signs otherwise I really have no reason to panicking. Should my FUD scenario ever come true I’m also pretty confident we’ll see an Nginx fork with a lot of the support structure migrating over. This of course makes it in the best interest of Nginx Inc to continue working closely with the community which has supported Nginx for so long.

I would like to see a more open development approach, though. A road map of planned features and more details what exactly they plan to offer in their commercial version would be very welcome and would allow people to know how to react.

  • PJ Brunet

    Posted: October 13, 2011


    Glad to hear it. I push all my clients to NginX. It's fast. I love it. My clients love the speed too.

    (Although I hope the documentation is fleshed out in more detail with more examples--in English please!)

    I was just saying in the #linode irc channel the other day, look at the rate of increase of NginX growth compared to the competition--NginX will surely pass Microsoft soon to be the #2 web server in the world.

    San Francisco? Why not Austin, TX? ;-) Reply


    • fjordvald

      Posted: October 13, 2011


      The only thing keeping Nginx back is that it's not really well suited for shared hosting yet, if it ever works that out with PHP then it'll easily overtake even Apache!

      And with all due respect to Austin, TX, it's not exactly San Francisco or Silicon Valley :) Reply


      • PJ Brunet

        Posted: October 13, 2011


        Shared hosting is doomed. VPS is king now. The word is out, shared hosting is slooooow, the accounts aren't isolated from each other. People are flying to me in droves from shared hosting, "Help our blog is slow!"

        As for ATX vs. SF. Funny, all you Californians are moving here (Yes, I lived in Los Angeles too) and all the big guns are here, Google, Oracle, IBM, ATT HQ, Apple, etc. More centrally located data centers, better power grid, lower cost of living, lower taxes and better music ;-) Reply


        • fjordvald

          Posted: October 14, 2011


          Shared hosting isn't doomed so long as people only want to pay $1.99 for "unlimited" everything. VPS is definitely the future, especially as hardware becomes cheaper and each VPS node can earn more, still a bit into the future, though.

          Also, I'm not a Californian. I'm not even an American, I wouldn't mind being one but you guys have draconian immigration laws and it's just now worth bothering with unless someone wants to invest $500k in me. :)
          That said, I don't think I could ever live in Texas, it's waaaaaaaaaaaay too hot there. Reply


          • PJ Brunet

            Posted: October 14, 2011


            $1.99 for unlimited everything, I have seen VPS advertised for under $5/mo. so I think it's just a matter of somebody offering a $1.99 VPS that's ready to go with Cpanel installed. Just a matter of time and desperation--outsource the tickets to some poor country :( I don't know the limits of Xen but I'm guessing you could cram 1000s of VPS onto one server and that would eventually solve the problem of one user slowing everybody else down while disrupting the shared hosting business. Anyway, I agree with you that will take time ;-)

            Yeah Texas does get hot--especially San Antonio. No ocean breeze here to keep us cool. Right now though the weather is nice. I don't know about immigration laws but from what friends have told me, the business you work for just needs to fill out some extra paperwork--but I'm not an expert so don't take my word for it.


          • Nick Meisher

            Posted: December 12, 2011


            Martin,

            You are mistaken about IS immigration laws. Its only difficult for those who apply when they are outside the USA and wait for answer. The vast majority of immigrants arrive in the USA, get settled and only then begin looking about ways to obtain a green card. $500,000 is a bit too much. I think $10,000 - $15,000 is correct.

            But many people (they are now called undocumented immigrants, before illegal immigrants) live quite well with just a state ID card or driver license since majority of Americans don't have passports, and they use a federal tax id number to pay all taxes and work since social security numbers are not obligatory. In many states its illegal for police to even ask if a person is a citizen.

            As an immigrant myself from Russia, I think it would be a good thing if you moved. (No, I waited 5 years in line like an idiot)

            Like your articles. Have fun!


  • Andy

    Posted: October 13, 2011


    "Modules, perhaps such as high availability, proper load balancing or actual backend monitoring. Things normal people obviously do not need."

    It's highly arguable that "normal people" don't need those things. HA, LB, and monitoring are really basic functionality that most non-toy projects absolutely need.

    Sure you could define "normal people" as people who run a blog with 100 visitors per day. But if you're going to set the bar that low, then you could also say that most "normal people" don't need Nginx, period. For them Apache is plenty good enough. Reply


    • fjordvald

      Posted: October 14, 2011


      That was exactly what I wanted to convey. I had hoped the tone of that section was sarcastic enough as the whole section isn't meant to be taken seriously, thus the title containing "FUD". Sorry if it gave you the wrong impression. Reply


  • Andrew

    Posted: October 24, 2011


    Martin,
    Thanks for the post, it's a good one. We tend to believe we'd find the proper balance to avoid any negative scenario. To answer some of your questions, Igor has all the control and he's the main stakeholder in the company. As for a better load balancing and monitoring for the normal people, new code is coming soon, and not only this one. Reply


    • fjordvald

      Posted: October 24, 2011


      Hey Andrew,

      I still have full faith in your guys, the value and decisions you guys have made so far have all been positive, just know you're walking a fickle line for a lot of open source people. (Just see what happened to MySQL!)

      Best of luck, though. Reply


  • Clement Nedelcu

    Posted: November 9, 2011


    I don't think we have much to worry about over this. The current version of nginx is sufficient for most situations and as you said, if you need more than there currently is, you are probably working for a large company that can probably afford whatever services Nginx Inc will provide. I am happy with the current load balancing module (especially thanks to ip_hash) and am loving how nginx works with multiple fastcgi backends. Reply


    • fjordvald

      Posted: November 12, 2011


      I actually don't agree. The current version is usable and very good but it lacks full HTTP/1.1 reverse proxying support. This is essential to support future web technologies like websockets. Additionally you have tech like Googles SPDY which is already supported in Chrome and currently being implemented in firefox. SPDY shows some significant improvements and not having support for this in Nginx basic version would be a huge loss for the web.

      I still don't think there's anything to worry about as Nginx has historically been open source and they claim to want to keep the core open. Not having reason to worry is not the same thing as the current feature set being sufficient, though. Reply


  • IDESIGNSTUDIO

    Posted: February 17, 2012


    What news! We are just developing a new online product and we already decided for Nginx instead of Apache. Should we re-think with all these news? What is better; to go with Nginx and pay later for commercial extentions/version, or go with the well known open source Apache and just pay for more memory for your server to get the same performance. In both cases, we pay. If Nginx will launch a commercial version that is really useful for businesses, most probably it will be just a matter of taste and prefered scenarion.
    Thanks, Martin, for sharing the news!
    Milena Böhm
    IDESIGNSTUDIO Reply


    • fjordvald

      Posted: February 17, 2012


      I would go with Nginx. As I write in my post nginx has historically been open source and since the original publishing date they've done nothing to suggest that they'll be any less open source. So far all the commercial activity has been in commercial support, meaning that if you happen to need support for nginx you can now actually buy it instead of relying on the community effort.

      Overall I'd say we've only seen positive things from the incorporation and funding. Reply


  • IDESIGNSTUDIO

    Posted: February 17, 2012


    Hi, Martin!
    I would say very good final overview - "if you happen to need support for nginx you can now actually buy it instead of relying on the community effort". I didn't look at it of this side of growing possibilities.
    We are not server geaks by ourselves, so anyway we already started to collect offers from professionals that can install Nginx and all necessary set-up for WP Multisite smooth work on our dedicated server.
    So, having clear commercial products and pricing will make the things actually much easier. Reply



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